Verona cafe owner JCK Holdings owes more than $700k to creditors as liquidators move to sell business
The business behind Verona Cafe on Karangahape Rd owes more than $700,000 to creditors. Photo / Chris Skelton
The company behind Karangahape Rd’s cafe and bar Verona owes more than $700,000 to creditors, including Inland Revenue, as the liquidators prepare to sell the business.
JCK Holdings, which owned and operated Verona, was placed into liquidation on April 23 upon application of the Commissioner of Inland Revenue, with KPMG‘s Kristal Pihama and Leon Bowker appointed joint and several liquidators.
An application to have the company liquidated was filed in the High Court on November 12 last year, according to an advertisement on the New Zealand Gazette website.
In the pair’s first report on the company’s position, Pihama and Bowker said a review of the company’s financial records indicated it was unable to generate sufficient income to meet its financial commitments, which ultimately led to its failure.
The pair said the company was placed into liquidation after failing to meet its obligations to Inland Revenue, consisting of overdue GST and PAYE taxes, together with associated penalties and interest.
Pihama and Bowker visited the business on the date of their appointment, where they learned the employees had not been made aware of the liquidation.
The pair considered the option of continuing to trade the business.
However, because of insufficient funds in the company’s bank account and unresolved issues with its alcohol trading licence, they were unable to continue operating the business.
Since the business was placed into liquidation, Pihama and Bowker have received offers from interested parties to acquire the cafe as a going concern.
The pair are currently reviewing the terms and conditions of these offers before making a decision, but have communicated their intention to sell the cafe as a going concern to trade creditors.
“Some have agreed to keep their equipment on-site, with a view to arranging a new lease agreement with the new owners; others have elected to repossess their assets,” the pair said.
Creditors owed
Looking at the company’s state of affairs, JCK Holdings has combined assets with a book value of $15,935, made up of cash at bank, accounts receivable and withholding tax paid.
The company does have fixed assets and goodwill listed as assets, but the estimated values are withheld because of the ongoing sale process.
As for liabilities, the company has three registered secured creditors, including BOC, Fountain Equipment and Fresh Ice Machine Rentals 2016.
Secured creditors are waiting for the business sale before negotiating a new lease with the new owners and filing their claims, according to the liquidators.
The company has three listed preferential creditors, Inland Revenue, Sai Kumar and Cedric Rerehau.
Preferential claims have a book value of $179,890, and a revised estimated value of $365,163.
As for unsecured creditors, three are listed, including Inland Revenue, Black Sands Brewing Company and Verona Building.
Unsecured claims have a book value of $714,024, with a revised estimated value of $564,374.
Altogether, JCK Holdings has total liabilities with a book value of $893,914 and net assets of -$731,201.
Pihama and Bowker said it was not possible to provide an estimated date for the completion of the liquidation, nor amounts likely to be available for payment to each class of creditor.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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