No action against Lower Hutt bar directors
Liquidators will not take action against Lower Hutt bars after investigating if they were trading while insolvent.
Parrot and Jigger, Whistle Stop and Station Cafe Casino were put into liquidation by co-director and shareholder Terry Wellington last year because of debt owed to the Inland Revenue Department.
The final liquidators’ report shows the Station Village bars had debts in excess of $1 million.
A large debt incurred by the business had raised questions about whether the bars were trading while insolvent.
Liquidator Dave Ruscoe, of advisory firm Grant Thornton, said the issue was looked into but no action was taken.
‘‘We deemed it was not worth pursuing because there had to be an economic outcome. We would spend a lot of money and not get any return for creditors.’’
Much of the debt was investment made by a shareholder, he said.
In January Wellington said he put more than $1m of his money into the business to keep it going.
He said it was a hard decision to close. The trigger point was the Inland Revenue tax debt, so he called in liquidators.
Ruscoe said assets were sold to the landlord, who had since leased the premises to someone else.
The bars reopened under a new lease and are being run by Wellington Hospitality.
Co-shareholder and director Graham Watson said yesterday he did not want to comment because Wellington owned most of the business. ANZ was owed $16,864 plus a $7773 guarantee held by the New Zealand Racing Board, which it called upon. The bank was paid in full. DB Breweries was owed $51,892.
Creditors included Inland Revenue, which was owed $234,975, of which $160,391 was a preferential claim.
There were insufficient funds to make any further payments to preferential creditors or to pay any of the $955,016 owed to unsecured creditors.