Dr O’Malley, who is also a Dunedin city councillor, got a two-to-one majority vote at yesterday’s special meeting in favour of a two-week delay on the resolution while he delved into the finances and prepared an alternate budget.
Sixty-six of the 96 shareholders present were in favour of Dr O’Malley’s proposal.
He argued shareholders were not being given enough information to make a decision about liquidating the company. He had been raising "flags" before he stepped down in February, but had experienced "trouble" getting through to the company.
No new budget had been put before shareholders for the next two years by the new directors and investment in things such as the company’s cafe had been a "distraction", he said.
Previous directors who had given time to manage the company, but not been paid, were a big chunk of the company’s debt, and "if I have to give that up, I will do it rather than the company going down like this", he said.
During the meeting, chairman Pete Lead justified the liquidation plan due to financial woes, which would "come as a shock" to some shareholders, he said.
A letter sent to shareholders before the meeting said an operating loss of $43,000 was anticipated by the end of the year, with $468,000 revenue against $511,000 costs.
The general manager of the company had resigned last year and had not been replaced, and a significant amount of his time had been taken up with a legal dispute, Mr Lead said.
Mr Lead admitted the current directors did not "have all the information that previous directors had", but stressed "we are out of cash and there is no responsible way to get more".
"We have worked to cut costs and grow revenue, but reached the point we can see it isn’t enough and, as directors, we cannot allow reckless trading, so it is our duty to address this. Being proactive puts us in a better position than keeping trading and hoping to get lucky."
The company could not employ people and say hand on heart that it could pay them. When pressed by shareholders, Mr Lead said the legal dispute was with a former employee, but would not go into further detail.
He praised Dr O’Malley and others for their efforts to keep the company going, saying it "wouldn’t have survived this long" without them.
Dr O’Malley said shareholders’ backing of his delay plan was a "good outcome".
"It would be a shame to throw the baby out with the bathwater. Seeking to understand the bottom line is what the next two weeks is all about."
He described the legal dispute as perhaps the "straw that broke the camel’s back and an incredibly stressful thing to happen", but the numbers needed examining.
Mr Lead, who has been a director since last November and chairman since February, said he was "seeking advice" to see if the meeting’s vote was valid because a "significant number" of shareholders had pre-voted on the resolution to liquidate before the meeting.
