Sun sues SolNet for funds owed

By ADAM GIFFORD

Computer giant Sun Microsystems has launched legal action against former New Zealand agent SolNet Holdings, seeking money owed.

Sun stopped trading with SolNet last November and refused to sell it any more equipment.

At the same time it lodged a notice in the Personal Property Securities Registry via the under Romalpa clause - designed to protect a seller's title to goods under dispute - for hardware, software and peripherals.

A Wellington High Court spokeswoman said Sun subsequently filed a civil action against SolNet Holdings, with the first hearing due on February 23.

After Sun withdrew its agency, SolNet's directors sold assets of SolNet Holdings to a new company, SolNet Systems, and hired about 100 of the 125 staff.

SolNet Systems chief executive Mark Botherway said he had no comment on the legal action.

He said the SolNet Solutions was established as a standalone business to sell software development and services.

"It purchased the assets it wished to purchase from SolNet. This was done on a commercial basis with extensive third party input," Botherway said.

He said losing the Sun agency "had a huge impact on revenues, but a much smaller impact on the bottom line because hardware was always a marginal business". SolNet's contribution to combined Sun/SolNet revenues was just over $17 million last year.

"In the new vehicle revenue will be lower but the plan is for the business to be profitable in its first year," Botherway said.

He said the company had retained most of its customers and picked up two new ones in the past six weeks.

According to accounts filed this month with the Companies Office, in the year to June 30 Sun Microsystems made an after-tax profit of $5.69 million on revenue of $83.7 million.

This compares with a $560,000 loss on revenue of $83.1 million the previous year.

It listed trade receivables at $15.6 million - an indication of the sort of sum which could be owed at any time by an agent like SolNet.