PC Company accepts its fate

By RICHARD WOOD

The PC Company has ended weeks of speculation and frustration for ex-staff, customers, and creditors by going into receivership.

The receiver, Hamilton-based Kim Thompson, yesterday confirmed debts of around $3 million, including $2 million to unsecured creditors, $300,000 to ex-employees, and $800,000 on its debenture, which was bought from the ANZ bank by managing director Colin Brown in September.

Thompson said he had no idea yet what would be paid out.

Brown told the Herald earlier that when The PC Company closed on September 8 it was not insolvent, and even last week he said it was "premature" to say so.

However, Thompson said the only assets were stock and it was "most unlikely there are more assets than liabilities".

On September 18 Brown had said the firm would not trade again but not go into receivership, instead reaching an arrangement with creditors. A plan never eventuated.

Industry speculation is that Brown held off entering receivership because he intended to set up another business selling or servicing PCs.

Thompson said Brown had exhausted all avenues for re-engineering the business, with receivership the only option left.

The firm began a stock sale last Wednesday out of its Quentin Drive premises in Hamilton, as pressure mounted from creditors.

A group of 12 employees were to file a winding up notice on Friday.

Ex-staff had been unhappy that they were still owed holiday pay and payment in lieu of notice.

Distributor Ingram Micro, a major creditor, filed a winding-up notice two weeks ago, but the Herald understands Brown last week filed an application to set it aside.

Ingram director John Dunbar said the company had been willing to look at the "compromise with creditors" document that Brown had promised late last week.

However, he said receivership would make it a lot easier to resolve things, including warranty issues.

Dunbar would not confirm the size of his firm's debt, which is understood to be as high as $500,000. Software vendor Microsoft is thought to be owed $200,000, while printer maker Epson is also a creditor.

Questions remain over whether there have been any preferential payments to suppliers over the course of the year that could be claimed back in a liquidation.

Receiver Kim Thompson said the firm would continue its stock sales until the end of November.

He was aiming for an interim payment to employees by Christmas.

Thompson would not provide a breakdown of creditors nor provide details on a 250 PC deal in the works with a nationwide chain.

He said the firm might continue to assemble computers to maximise use of the components and was likely to need to buy additional components.

Consumers with extended warranties will have to wait to discover what receivership means for them.

Catherine McNamarra from Consumer's Institute said those with extended warranties beyond the two-year hardware warranty provided by the Computer Manufacturers Association of New Zealand would become unsecured creditors.

"People can register as creditors if they have an extended warranty but I doubt they will see anything for it."

CMANZ chairman Peter Shirley said he had no idea how many PCs were likely to need its warranty assistance because Brown had failed to supply a database of serial numbers and purchase dates, an issue Thompson said he was unaware of.

Shirley said notebook computers are not covered by the CMANZ warranty, neither was software.

In the firm's current sale a 48-hour warranty is being offered on goods and seven days on computers. Shirley said CMANZ would "absolutely not" cover any products sold during the sale.