'New way' for business folds after two years

Roslie Capper

An entrepreneur's club hailed as the new way to conduct business in Auckland has crashed, taking with it a pile of creditors' and investors' money.

The Viaduct Harbour-based Totem Club went into liquidation last month, after struggling since opening in 2002.

The initial report from liquidator Meltzer Mason Heath found Totem's drum silenced. It had assets of $982,000, including $640,000 leasehold improvements to the plush offices at 104 Customs St West.

But Inland Revenue wants $34,395 tax, a first debenture-holder wants $399,000, $703,000 is owed to creditors and shareholders have more than $1 million of shares tied up in the failed venture, including $590,000 held by directors, according to the latest statement of financial affairs.

In 2002, Totem founder Roslie Capper - described at the time as a change expert - promised to change the face of Auckland meetings and boasted of high-profile bookings such as British Body Shop founder Anita Roddick.

Criticising other Auckland conference venues for being wall-to-wall hotel beige with bad service, she unveiled a cross between serviced offices, a private club, an airport lounge and a conference centre.

Conference space for 200 people, seminar rooms for 70, seven board rooms, a video suite and club lounge were aimed at post-Knowledge Wave Aucklanders, many working from home but needing meeting space in the city. Charging $4000 a year for club membership, Capper said the 1500sq m premises was for "social entrepreneurs" where those determined to think, innovate and spread the word could put their heads together. "I think people are hungry for peers to talk to," she said in 2002.

But Aucklanders were under-whelmed. The business never flourished. 

Last winter, Capper tried to save her business by filing a creditors' compromise scheme. She won court approval for a debt-compromise deal, a permanent stay on a liquidation application brought by creditors.

A cash injection helped, but not for long.

"A lender then advanced further working capital on a secured basis and the company continued to trade, showing improved revenues through to November 2004," the liquidator said.

But it was not enough to generate the cash surplus to meet costs over the quiet Christmas trading period. December's rent went unpaid and the directors put the business under voluntarily.

Eighteen investors put close to $1 million into Totem, including Capper's father, Colin Josephson, who the liquidators said was the largest shareholder, although he refused to discuss the failure yesterday.

Capper said she wanted to be helpful and discuss Totem's failure, but could not.