DC Ross was placed in receivership by its majority shareholders, Dunedin business family the McConnons, in mid-September, with debts totalling almost $19million.
The lion’s share of the debt is to the McConnon family trust’s holding company Aorangi Laboratories Ltd, the 72.5% shareholder, which is owed $13.7million.
Up to 40% of the company’s work was for giant Chinese whiteware manufacturer Haier, which owns Fisher & Paykel Appliances, and about 50% of its work was for the automotive industry.
The recent downturn in the Australian car manufacturing sector created cash-flow problems for DC Ross, the receivers said in November.
While total debt stands at almost $19million, the receivers had not divulged the value of DC Ross assets, which would have offset at least some of the debt, as they did not want to compromise a potential sale.
In the High Court of Dunedin yesterday, before Associate Judge Rob Osborne, counsel for Fletcher presented the application, which was not defended.
Associate Judge Osborne called for DC Ross representation, but there was no appearance on behalf of the engineering company, nor legal counsel.
The DC Ross file is yet to be delivered to the liquidators, so there was no update available on the company’s position, under liquidation. The Fletcher debt was not disclosed during yesterday’s proceedings, but the earlier receiver’s first report in mid-November said Fletcher Steel was the third secured creditor, and a Personal Property Security Register creditor, having a general security agreement for goods-supplied totalling $609,670.
All of DC Ross’ 12 employees had stayed with the company on new contracts during the receivership period, and continued to work on customer orders.
The staff were entitled to a maximum preferential claim of $22,160, but they had further unsecured creditor claims, the receivers said in November.
However, the receivers also noted at the time "from our observations to date and given the substantial amount owed to secured creditors, we believe that there are unlikely to be any funds available for unsecured creditors".
• Receivers will continue to govern the assets of Dunedin engineering company DC Ross (in receivership), seeking to continue trading and find a buyer, or subsequently sell off the assets to cover its debt; estimated at almost $19 million. While DC Ross is subject to separate liquidation proceedings, over a $600,000 debt, the liquidators will only make their claim once receivership is completed, if there are any assets or surplus funds remaining.
