For­mer VR Laser work­ers fight pay­ment to Bank of Bar­oda

CityPress - - Business & Tenders - – De­wald van Rens­burg

The wind­ing down of the Gupta fam­ily’s com­pany, VR Laser, was halted again this week when for­mer em­ploy­ees pe­ti­tioned the busi­ness res­cue prac­ti­tion­ers to stop a R29 mil­lion pay­ment to Bank of Bar­oda.

The money was raised at a re­cent auc­tion of VR Laser’s equip­ment, but the amount is not nearly enough to cover claims against the com­pany, which was one of eight Gupta com­pa­nies that vol­un­tar­ily went into busi­ness res­cue this year.

Bank of Bar­oda is the only se­cured cred­i­tor and has a claim of R33 mil­lion against VR Laser.

For­mer em­ploy­ees, how­ever, col­lec­tively have a recog­nised claim of roughly R35 mil­lion for un­paid salaries and sepa­ra­tion pack­ages.

A cam­paign by for­mer em­ploy­ees was launched last week to stop the pay­out to Bank of Bar­oda based on the ar­gu­ment that their claim out­ranked that of the bank.

This sets the scene for yet an­other le­gal chal­lenge in the drawn-out saga of the demise of the Gupta fam­ily’s com­pa­nies.

Res­cue prac­ti­tioner Kurt Knoop wrote to in­ter­ested par­ties say­ing that the res­cue prac­ti­tion­ers “are there­fore not in a po­si­tion to re­lease any funds un­til the im­passe is ei­ther re­solved in writ­ing be­tween the em­ploy­ees and the Bank of Bar­oda, or if a declara­tory or­der is re­ceived”.

Knoop’s fel­low res­cue prac­ti­tioner this week con­firmed that the pay­out to Bar­oda was on hold.

In an email to the res­cue prac­ti­tion­ers last week, Oak­bay Group’s HR di­rec­tor André Old­know said that there was a “grow­ing groundswell” of for­mer VR Laser em­ploy­ees who wanted to chal­lenge the rank­ing of Bank of Bar­oda’s claim above their own.

Their ar­gu­ment is that the un­paid salaries and pack­ages are tan­ta­mount to post-com­mence­ment fi­nance. In a busi­ness res­cue, any fund­ing pro­vided to the dis­tressed com­pany af­ter busi­ness res­cue has com­menced is au­to­mat­i­cally the high­est pri­or­ity for re­pay­ment.

It is pos­si­ble that the auc­tion money will be the last sub­stan­tial in­come for VR Laser’s cred­i­tors. There are claims against Denel for roughly R40 mil­lion, but the state-owned weapons com­pany has al­ready gone to court to chal­lenge th­ese debts on the ba­sis that its con­tracts with the Gupta com­pany were ir­reg­u­lar and il­le­gal.

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