Whitcoulls creditors accept 3c payout

Photo / Richard Robinson

Unsecured creditors owed $21.5 million by former Whitcoulls owner REDgroup have voted to accept a plan which will see them paid out at 3c in the dollar.

The watershed meeting in Auckland this morning followed the administrators' recent sale of the Whitcoulls and Borders businesses to the James Pascoe Group, and the sale of the Bennetts bookstores and 10 Whitcoulls bookstores located in New Zealand airports.

Forty-seven unsecured creditors owed money by the Whitcoulls Group voted in favour of the proposal, nine were against it and 10 abstained.

Of those owed money by Borders, 13 voted in favour, five were against and four abstained.

Resolutions for Calendar Club NZ, Red Group Online and Whitcoulls Group Holdings Limited were also passed.

Any proposal put to creditors must receive 75 per cent approval by monetary value and more than 50 per cent by number of creditors to go ahead.

REDgroup's New Zealand businesses - Whitcoulls, Borders and Bennetts - went into voluntary administration in February.

Voluntary administration was seen as a cost-effective way for REDgroup's owner, Pacific Equity Partners, to exit its ill-fated foray into book retailing.

REDgroup's total secured debt was A$118 million ($147 million), most of it owed to Pacific Equity Partners.

"Based on our investigations, we do not believe that any dividend would be payable to unsecured creditors in any of the companies should they be placed in liquidation," said Ryan Eagle, administrator and Ferrier Hodgson partner.

"As a result of this analysis we recommend to creditors that the proposal for a DOCA be supported," he said.

David Joel, managing director at Macmillan Publishers NZ, said the company, which was owed $900,000, was now likely to get back just $27,000.

It is understood that other creditors were covered by insurance, or had retention of title protection clauses in their supply contracts.

- NZ Herald Staff