Computer reseller has $1.9m in debts

By ADAM GIFFORD

The liquidators of UCC (2001) say a first look at the books of the failed computer reseller indicates it is $1.9 million in the red.

The company made an unsuccessful bid for broadband tenders in Wairarapa and Northland, but its main business was selling Dell Computer hardware and related software and services to universities.

Liquidator John Whittfield, from McDonald Vague, said the main event leading to the liquidation was Dell's decision to sell direct to the universities.

That decision is the subject of a High Court action.

Dell has a judgment against UCC for a debt of $687,000, but UCC counter-sued for $1.4 million, claiming breach of contract and deceptive and misleading conduct.

Whittfield said the liquidators would decide whether to continue with the case, based on the advice of their legal team.

UCC's shareholders were Alastair Austin, Peter Uffindell and Leicester Chatfield, who were also directors, and E. R. Midlane.

The liquidators' report said that, based on papers supplied by the directors, they expected to get back $140,000 from debtors, stock, computers and office furniture, and $21,000 from overpaid tax.

Against that was a $731,558 debenture to the Hong Kong and Shanghai Bank, $784,543 owed to trade creditors and $500,000 in director loans.

If the liquidators decide to pursue the High Court action, they have to find some way to provide security for the money Dell is owned.

Master Lang had agreed to UCC's providing security in the form of Newcall shares, but UCC's merger with Newcall fell through last month.

UCC's directors bought the company in late 2001 as a profitable business which they believed had an exclusive right to sell Dell equipment to Auckland, Waikato and Victoria Universities.

They say Dell encouraged the purchase, and former Dell New Zealand manager Ross Allan provided a "letter of comfort" that the relationship would continue, provided the new owners did business according to Dell's standard terms and conditions.

UCC's statement of claim says that while Dell was making encouraging noises, some universities were trying to quit the UCC relationship.

In an interim judgment in February, Master Lang said UCC would be hard pressed to prove its breach of contract claim against Dell, but there could be an arguable case, even if not particularly strong, that the Fair Trading Act was breached.