On 3 November 2009 the NZ Herald reported that the publisher of the tabloid newspaper NZ Truth, Truth Publications Ltd, had gone into liquidation owing “unsecured creditors and subordinated lenders $622,074”. A decision had been made to “sell its assets to the company’s masthead owner, Multimedia Solutions, for $70,000.” Truth publications Ltd (In Liq), directed by Dermott Malley, John Andrew Pin and Matthew William Horton, ceased trading on 31 August 2009 and was placed into liquidation on 21 October 2009. The NZ Herald notes: “A related party of Truth Publications called in liquidators Meltzer Mason Heath in September to find out how much the company would be worth.” (See companies diagram here.)
Under the heading “Realisation of Assets”, the Liquidator, Lloyd Hayward, stated in his first Report dated 28 October:
“The company’s assets were purchased by a second lender and related party. The fixed assets were sold based on an independent valuation. Trade debts etc were purchased at book value.
“The purchaser also assumed certain liabilities being employee and IRD preferential amounts. The secured debt was set off against the purchase price. The remaining asset is the balance of the purchase price of $70,00 payable to the purchaser”.
In his note on the “Appointment” of the Liquidator, Lloyd Hayward. states:
“In September 2009 a related party requested Meltzer Mason Heath to undertake a calculation of the likely distribution in a liquidation of Truth Publication Limited based on assumption as advised. This engagement did not represent an ongoing relationship with Truth Publications Limited. Other than this engagement the liquidators have not previously acted in any capacity for the company or the officers and shareholders of the company.”
However, it would appear that this engagement involved a potential conflict of interests: a company director(s) has engaged a Liquidator to gain an assessment of the valuation of assets prior to the company being put into liquidation with that very same liquidator. (Section 280 of the Companies Act 1993 sets out who can lawfully act as Liquidator).
According to Lloyd Hayward’s latest Liquidator’s report dated 21 June 2010, the sale of the liquidated company’s “business (excluding the masthead which was not owned by the company)”, took place “prior to liquidation” and has yet to be settled. Hayward states: “Settlement of this transaction is expected shortly. Once this transaction is settled the Liquidators will be in a position to pay the first and final dividends to creditors.” This contradicted what he had written In his earlier Report dated 28 October 2009 “…it is unlikely there will be a distribution to creditors…”.
The Registrar and National Enforcement Office will be very interested to learn that the liquidated company’s business was sold “prior to liquidation”, that the transaction has yet to be settled and that the NZ Herald reported on 3 November 2009 that the “related party of Truth Publications” first called in the Liquidator to determine a valuation of the assets in September, prior to him being appointed as Liquidator.
The request to have the assets of a potentially liquidated company independently valued by a Liquidator – one eventually to be appointed as the Liquidator; involved a potential purchaser (‘the related party”), which had close business links with Dermott Mally and John Pin, co-directors of the liquidated company.
Like a phoenix arising from the ashes, Truth Publications (In Liq) has been resurrected as a brand spanking new publishing company called the Truth Weekender Ltd – directed by Dermott Malley, the same man who directed the insovent company that once published NZ Truth.
On the same day Truth Publications Ltd was put into liquidation, a media release was issued, presumably by its CEO Dermott Malley, stating:
“The publishing of NZ Truth has moved to new hands. NZ Truth, owned by Multimedia Solutions Limited, was published by Truth Publications but that arrangement has now ceased. With the launch of the new paper, Truth Weekender, the role of publisher has moved to Truth Weekender Ltd.” (Voxy News 21 October 2009)
The Voxy report that hailed the “brand new look and feel tabloid newspaper”, had all the hallmarks of a desperate promo for the Emperor’s new set of skin-tight clothes. It even dressed up the promotion of prostitution services, promiscuity and hard-core porn sleaze in feel good language of the service industry.
“There is a new removable magazine Skin, focuses on night life and has a full size pin up centrefold girl for the boys. The insert is part of a move towards a new internet portal, skin.net.nz, focusing on nightlife and relationship products and services.
The Liquidator’s report dated 28 October, under the heading “Events Leading to Appointment”, stated:
“The company [Truth Publications Ltd] operated as the publisher of NZ Truth. The directors advise that due to trading conditions the company could not meet its obligations under its security arrangements or the licence agreement and the masthead licence was terminated. The company ceased to trade on 31 August 2009 and is now being wound up. Truth Weekender is now published by the masthead owner Multimedia Solutions Limited.” (Emphasis added)
However , Multimedia Solutions Ltd has never owned either Truth Publications Ltd or The Truth Weekender Ltd. Its major shareholder (holding 56% of total shares) is Pirika Investments Ltd, a company Dermott Malley co-directs and indirectly owns. As the NZ Herald puts it: “The owners of Multimedia Solutions include businesses associated with Dermott Malley and John Pin, who were both directors and indirect shareholders in Truth Publications.”
Multimedia Solutions Ltd is being hailed as the “the masthead owner” of Truth Weekender tabloid. It may well own “the business”. However, this obfuscates the real issue: Truth Publications Ltd (In Liq) owing $622,074 to creditors and lenders, has as its major shareholder (41.56%), Onyx Capital Limited directed and owned in part by Dermott Malley and as its second largest shareholder MDL Solutions Ltd, directed and part owned by John Pin. Both men are directors and part owners of Truth Publications Ltd (In Liq).
The Registrar will be fully appraised of the laws relating to Phoenix Trading and Phoenix Companies and will be able to assess this rags to riches or ashes to Skin-tight clothes Houdini Act played out under the banners of “Truth”, “Relationship Services” and “Centrefold girls for the boys”. No doubt the creditors of Truth Publications Ltd (In Liq) – New Zealand Couriers, Warehouse Stationery, Vodafone, Mercury Energy and the New Zealand Herald – will keep a sharp eye on the financial ball and not be distracted by the Skin-tight Centrefolds.