The company signalled its intention to appoint liquidators in April 2024 when its shares were suspended after it was unable to pay out a requested redemption of loan notes totalling £2.2m ($4.78m) to INL Investment Ltd from August 2023.
Deloitte liquidators David Webb and Robert Campbell were subsequently appointed to the company on July 31, 2024.
Over the course of the liquidation, Webb and Campbell were able to recover $370,646 in assets from the sale of furniture, fittings, remaining stock and certain other intellectual property.
Despite those funds raised, East Imperial will be unable to pay $7,859,136 in funds owed to all classes of creditors.
Secured creditors have been paid $60,112 from realised assets, however there are still $693,591 in claims that will remain unpaid because of insufficient funds.
Inland Revenue was paid a total of $33,739 because of its status as a preferential creditor, however there remains a further $161,168 in claims that will also go unpaid.
The bulk of the claims made to liquidators were unsecured creditors, who have had no funds distributed and are set to miss out on $7,004,377 in unpaid debts.
The liquidators did confirm a carrier’s lien settlement of $54,022 was paid to an unsecured creditor to enable the sale of stock to be made, but the total debt owing to this creditor was $89,579.
Employees as preferential creditors did receive their full amount owed of $31,016.
A total of $370,646 in distributions was made to creditors where possible.
Listed creditors who submitted claims for debts by East Imperial included BNZ Bank, ACC, Mainfreight and MYOB, although amounts owed to them are unknown.
Background
As initially reported in February, following the Covid pandemic East Imperial required investment in its trade channels. However, the ongoing pressure on the company’s supply chain resulted in significantly higher input and logistics costs.
East Imperial continued to trade after the date of its liquidation, however, all manufacturing has stopped since April 2024.
During the business’s liquidation, Webb and Campbell had to abandon recovery efforts for amounts owed by two overseas debtors because potential legal action made them uneconomic to pursue.
The two overseas debtors, based in Europe and the Caribbean, owed the majority of the unrecovered amount.
Webb and Campbell said they determined further recovery action was not economic to pursue because of “any dispute likely to be subject to recovery proceedings in foreign court jurisdictions”.
Further funds owed by related companies, including East Imperial Beverages Corporation LLC, a company registered in the US, and East Imperial Beverages Pty Ltd, a company registered in Australia, also returned no debts because of both companies being unable to make repayments.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
