Creditors of Yippee brandish sale deal

By MICHAEL FOREMAN

Restaurant cum media group Wilson Neill may be forced to honour a month-old deal to buy internet company Yippee, now virtually worthless, for $2.7 million.

Yippee faces a petition for receivership from two creditors owed a combined $1 million.

The creditors' representative, Bernard Montgomerie, of Montgomerie and Associates, says he will enforce Wilson Neill's agreement to buy the company.

Mr Montgomerie said his firm was in possession of a sale and purchase agreement, signed by directors of both companies, for Wilson Neill to buy the assets of Yippee in exchange for shares in Wilson Neill.

"The agreement went unconditional on June 4 but Wilson Neill has yet to settle. One of our tasks is to enforce that sale," he said.

Yippee faces another tormentor. The landlord at its now-vacated Ferry Building offices in Auckland is understood to have called in liquidator Lay Dodd and Partners to recover unpaid rent.

Liquidator Peter Clarke said it was too early to quantify Yippee's debts, but the firm appeared to have "very little" assets.

Since it was founded in May last year, Yippee spent at least $1 million on developing its website, which offers more than 4000 shareware programs for download by internet users at no charge.

While the site was generally well-received - last August Yippee was the first New Zealand recipient of Hewlett Packard's "garage" scheme to help internet startups - the advertising revenue it depended on failed to materialise.

Faced with mounting debts, Yippee's owners began talking to Wilson Neill in April with a view to selling.

Mr Montgomerie said the consideration due from Wilson Neill would cover all Yippee's outstanding debts, including the debentures of creditors Web Media Investments and Quaystone Fund No 2, which total $1 million.

"When Wilson Neill finally settles, the preferred, secured and unsecured creditors will all be paid off, and it should leave some money over for the shareholders as well."

But Wilson Neill managing director Tim Connell said the purchase agreement was conditional on shareholder approval, and June 4 was the date the company was required to have a shareholders' meeting.

That meeting had not taken place for "a whole number of reasons," including the change in controlling ownership of Wilson Neill, said Mr Connell.

Two weeks ago, an off-market raid by Transram, a joint venture between Panama communications company WeCU and the New Zealand-registered Genesis International Charitable Trust, secured more than 50 per cent of Wilson Neill's shares.

The acquisition is understood to have cost between $10 million and $12 million.

Mr Montgomerie said he was aware that Wilson Neill had been taken over but he did not believe this affected the agreement to buy Yippee.

The matter was now in the hands of the firm's lawyers.

Mr Connell confirmed that Yippee's remaining staff, including founder Mark Stuart, were working from Wilson Neill-owned IT Media's premises, but it would be up to the shareholders whether the purchase took place.

Mr Stuart was unavailable for comment yesterday.

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