The liquidation of Maclean Computing after almost 20 years of operation, along with the announcement that CEO Chris Maclean has purchased the assets of struggling company from liquidators within days of its liquidation has left some in the tech industry perplexed.
Maclean Computing went into liquidation at 5:30pm Friday 13 July. The following Monday staff at Maclean were told to wait for an “official” announcement, and on Tuesday Computerworld reported the liquidation
. By Wednesday July 18 it was announced that Chris Maclean had purchased Maclean’s assets
(but not its liabilities) under the name of Maclean Technology.
Update 25 July:
Maclean Technology was registered in November last year, with Allan Maclean as its principal shareholder. On 6 July of this year, Allan's 2,500,000 shares were transferred to Chris Maclean and Camcorp Trust (which is directed by business partner Matthew Bellingham).
The asset sale process took five days, including a weekend.
Maclean's liquidators Waterstone Insolvency, which is run by Damien Grant, says the bidding process was fair and competitive in order to give the highest possible return to creditors.
readers have pointed out, Grant is also a business and finance commentator for the New Zealand Herald
. Last year he told the National Business Review
that he was charged with 10 counts of fraud
[article behind paywall] in 1994, and was sentenced to two and a half years in prison.
has asked two liquidation experts for their opinion on the Maclean case, and whether the amount of time passed would have been sufficient. Simon Dalton is a partner at Gerry Rea Partners, and a chartered accountant. Mike Lamacraft is an insolvency practioner at Meltzer Mason Heath.
What is the average time a liquidator takes to sell a company?
Lamacraft says there is no standard amount of time for the liquidation process. It depends on the type of business and the pressures being put on the liquidator, he adds.
Before a sale can occur, Lamacraft says liquidators need to meet with creditors, investigate the owner’s activities, and the company’s financial records - which he says takes considerable administrative time.
Is five days (including a weekend) enough for a fair and competitive bidding process?
"Normally it's not that fast," says Dalton.
"Which suggests to me he [the liquidator] has been approached and offered money he couldn't say no to," he says. "The owner could have come forward after finding financing, or something similar.
"As a liquidator this is what you want to achieve."
Lamacraft suggests that following the news of Maclean’s liquidation, and moves by competitors to pick up its customers, pressure might have been put on Waterstone to sell before the company lost value.
Is it legal for Chris Maclean to purchase the company from the liquidator?
Both Dalton and Lamacraft agree that selling back to Maclean is perfectly legal, but that this could be challenged in court.
"There is the Phoenix Rule in the Companies Act which states if the same directors set up a similar sort of business with a similar sort of name, then it will be classed as a phoenix company," says Dalton.
"The new company can, if the high court agrees, be liable for the debts of the old company."
Dalton says for this to go through action needs to be brought by the creditors.
What are the consequences if the liquidator did not get the best value?
Dalton says if it is found that Chris Maclean purchased the company under the value of the company, creditors can seek to have Waterstone’s actions reviewed.
He adds that a high court judge would then decide whether to keep the decision, or unwind it to put the company back on the open market.
Lamacraft says there have been very few instances of this happening in New Zealand, but adds it would be the responsibility of the liquidator to make sure the process worked for the best value of creditors.
“At the end of the day it’s the liquidators duty to justify his actions. If something were found wrong the creditors would take action against him,” says Lamacraft.