Motorsport Promotions Ltd (MPL)

[Evomike]

Below is the publically available list of creditors (so far) of Motorsport Promotions Ltd (MPL). I have decided to post it as not everyone knows how and where to find it and have asked me to send it to them, it is publically available on the Companies Office Website.

This list is provided by the liquidator of the company (I have added in the details next to companies that I think are interesting).

A Tollemache
Bribyn Holdings Ltd (Brian Lawrence)
Brien Electrical
Canon New Zealand Limited
David Dovey
ECG Management Ltd (David Dovey)
Grant Thornton
ICONZ Limited
Inland Revenue Department
KV & TM Cooper Limited (Kerry Cooper)
Lester Group Limited (Jonathan Robert Lester)
MAP & Associates Limited (Martin Fine)
Media Works Limited (TV3)
Motorsport NZ Inc
Paystation Ltd
Pope Print
Pukekohe Park Limited
Short Motorsport Limited (Geoff Short)
Signcraft Signs & Graphics Ltd
Telecom NZ Ltd
Volt TV (Dave Hedge)
X Facta Resources Ltd
Zeevo Limited

There is no information on how much is owed or for what, that is normal. With the exception that at this stage the total owed to creditors (excluding IRD) $404,158, IRD is noted as PAYE & GST Unknown.

The above creditors would be as advised by the directors etc of MPL at the time the liquidator was appointed.

[RogerH]

We asked the President of MSNZ how much MSNZ were exposed to MPL as an unsecured creditor (clearly MSNZ should know this figure). He did not tell us the amount but advised that we could find it for ourselves from the Liquidator's First Report on the Companies Office site.
I don't believe this advice is correct as it appears the Liquidator's Report only has the amount for all unsecured creditors as a group - not individual creditor's amounts.

[Evomike]

Originally Posted by RogerH

We asked the President of MSNZ how much MSNZ were exposed to MPL as an unsecured creditor (clearly MSNZ should know this figure). He did not tell us the amount but advised that we could find it for ourselves from the Liquidator's First Report on the Companies Office site.
I don't believe this advice is correct as it appears the Liquidator's Report only has the amount for all unsecured creditors as a group - not individual creditor's amounts.

and there is no requirement for the liquidator to do so, in fact, a liquidator doesn't even have to disclose it to creditors unless they are ordered to by the court. Given that no one will discuss it and I highly doubt the liquidator will I suspect that we will never know

[RogerH]

Originally Posted by Evomike

and there is no requirement for the liquidator to do so, in fact, a liquidator doesn't even have to disclose it to creditors unless they are ordered to by the court. Given that no one will discuss it and I highly doubt the liquidator will I suspect that we will never know

I don't think it is up to the Liquidator to tell the amount of MSNZ's exposure - MSNZ must know this figure and they should tell Member Clubs (who are in effect MSNZ) the extent of the exposure. I would think it is pretty relevant to Member Clubs to know how exposed they are in addition to the $90,000 of capital MSNZ will need to write off for it's now presumably worthless shares in MPL.

[Evomike]

Originally Posted by RogerH

I don't think it is up to the Liquidator to tell the amount of MSNZ's exposure - MSNZ must know this figure and they should tell Member Clubs (who are in effect MSNZ) the extent of the exposure. I would think it is pretty relevant to Member Clubs to know how exposed they are in addition to the $90,000 of capital MSNZ will need to write off for it's now presumably worthless shares in MPL.

Absolutely right Roger, although they are hiding behind the rules, they will have been told to refer queries to the liquidator, who is under no obligation to disclose. I think the member clubs are entitled to know the information as they are in effect the shareholders of the company, and given that it has been publically advised on this forum that the shareholders voted unanimously to put MPL into liquidation one would presume that they had ALL the information prior to signing the minute. I also think the member clubs are also owed an answer on what exactly the former directors have their hands out for in the liquidation

[DX20VT]

If the number is $1 or the number is $1 million,

How would that affect anyone?
whatever the number is it cannot be changed,
It wont change the way you do stuff,
if it gets posted all everyone is going to do is have another go at MSNZ,

so why would they tell anyone??

[RogerH]

Originally Posted by DX20VT

If the number is $1 or the number is $1 million,

How would that affect anyone?
whatever the number is it cannot be changed,
It wont change the way you do stuff,
if it gets posted all everyone is going to do is have another go at MSNZ,

so why would they tell anyone??

The effect of the loss and the amount of it is directly relevant to how much MSNZ needs to recover to compensate for that loss, The compensation will primarily be by increased fees to competitors as that is the prime income source for MSNZ. If is only $1 then the effect on competitors will be insignificant. If is was $1 million then the effect would be significant.

Surely it is a concern if the Executive, who are charged under the Constitution to manage and control the affairs and finances of MotorSport, have let an investment on behalf of Member Clubs suffer a total loss. On that basis it would be wrong if we didn't learn from this and as you put it "change the way you do stuff".

The Member Clubs are the effective "shareholders" of MSNZ and they have a right to know what is going on with their organisation.

[Icarus_nz]

Originally Posted by DX20VT

If the number is $1 or the number is $1 million,

How would that affect anyone?
whatever the number is it cannot be changed,
It wont change the way you do stuff,
if it gets posted all everyone is going to do is have another go at MSNZ,

so why would they tell anyone??

Say you belonged to a local, I don't know - Bowling Club.

You enjoy the bowling but don't compete. You like the company and the cheap bar prices.

The elected officials of your club decide to promote the sport and form a promotional body (as oppossed to appoint) who royally mess things up and expose your bowling club to substantial losses.

The promotional body goes into liquidation and your club has to make good. Suddenly your membership fees and bar prices go through the roof.

Now do you care?

Meanwhile the folks responsible are still in their positions. The promotional body with the same faces is still 'business as usual' but with a new name.

Now do you care?


Excuse the lazy analogy - it is not intended to express accurately the complete course of events, rather to highlight that there will be an impact on the 'little people'

[flyingduck]

Got to ask as if I own a company and that gets Liquidated how can they go after shareholders assets for example if I own shares in Ford and it went Bankrupt owing billions they wouldn't ask me for money?

[Evomike]

Originally Posted by flyingduck

Got to ask as if I own a company and that gets Liquidated how can they go after shareholders assets for example if I own shares in Ford and it went Bankrupt owing billions they wouldn't ask me for money?

Correct FD, they won't go after the shareholders (Unless they owe money to the Company) In this case what Roger is talking about is the lost money invested in MPL, it will become a lost asset to MSNZ. There is scope however, to go after directors if they are negligent, IRD can also pursue directors AND shareholders for unpaid taxes (Particular PAYE) under certain circumstances even if the company is liquidated.

[sollitt]

Laws around limited liability changed in '93 to make directors liable where wrong doing or negligence was established. As far as I recall, the changes were not retrospective. Directors and shareholders of companies registered prior to '93 continued to enjoy protection from liability for losses, regardless of their actions or involvement. TMC/MPL was first registered September '92.

Generally the whole picture will not be apparent until the liquidator issues his 2nd report. In all likelihood the number of creditors will rise and the estimate of recoverables will diminish. Looking at the numbers already released it is apparent that no creditor will be paid so speculation of who's claiming how much is really only entertainment for the detractors.

I share Roger's concern around the loss of the initial investment and the amount owed to MSNZ, but let's not forget also that just 2 years ago TMC posted annual accounts showing cash reserves in excess of $600K with total assets around $700K. Whilst not technically the property of MSNZ, this did represent a significant nest egg that showed the investment in a strong light and could have benefitted other areas of the sport. That is now lost and I would be concerned whether the $1.2m turnaround is the result of poor decision making or misadventure.

[Evomike]

Originally Posted by sollitt

I share Roger's concern around the loss of the initial investment and the amount owed to MSNZ, but let's not forget also that just 2 years ago TMC posted annual accounts showing cash reserves in excess of $600K with total assets around $700K. Whilst not technically the property of MSNZ, this did represent a significant nest egg that showed the investment in a strong light and could have benefitted other areas of the sport. That is now lost and I would be concerned whether the $1.2m turnaround is the result of poor decision making or misadventure.

According to the 1st report there was a little over $7k in the bank at the time of liquidation.
According to the Financial Statements as at 31.03.11 there was $240,829 in the bank and the balance owing to MSNZ was $133,924, now it seems there is at this stage no accounts to 31 March 2012, so we don't know wether that figure has increased or decreased.
If we go back a year to 31.03.10 there was $336,370 in the bank amd $79,538 owed to MSNZ.

[sollitt]

I referred to the balance sheets of 31-03-09 which were presented to the 2010 AGCM.

[Goat Boy]

To me this is a real worry - how did they go from being solvent and apparently profitable to owing $400k+ in such a short time? Was it from dodgy dealings or a particular transaction? Will anyone ever find out?

[RogerH]

Originally Posted by Goat Boy

To me this is a real worry - how did they go from being solvent and apparently profitable to owing $400k+ in such a short time? Was it from dodgy dealings or a particular transaction? Will anyone ever find out?

You have to wonder what was really going on in TMC/MPL and whether the directors really had a handle on what the position was.

A few things to consider :

We were advised that TMC had an accounting system (MYOB?) so that up to date financial reports were available.

When questioned at the MSNZ AGM in May 2012 a TMC director / Chief Executive advised that the company was in good financial condition and should break even for the year.

Within a few months TMC was insolvent and on its way to liquidation with a loss of around $360,000 for the year.

[Goat Boy]

Originally Posted by RogerH

You have to wonder what was really going on in TMC/MPL and whether the directors really had a handle on what the position was.

A few things to consider :

We were advised that TMC had an accounting system (MYOB?) so that up to date financial reports were available.

When questioned at the MSNZ AGM in May 2012 a TMC director / Chief Executive advised that the company was in good financial condition and should break even for the year.

Within a few months TMC was insolvent and on its way to liquidation with a loss of around $360,000 for the year.

Was anyone seen skipping the country with large wads of cash...??

[flyingduck]

Sorry to keep asking silly questions but if MSNZ loses no money as such only a potential asset why would there been increased levies to the license holders and members. I would think that it could happen now MSNZ is promoting the summer series but for the MPL items since they haven't offered a surplus for a while then why would that effect the normal club holder?

[peckstar]

Originally Posted by flyingduck

Sorry to keep asking silly questions but if MSNZ loses no money as such only a potential asset why would there been increased levies to the license holders and members. I would think that it could happen now MSNZ is promoting the summer series but for the MPL items since they haven't offered a surplus for a while then why would that effect the normal club holder?

What about the creditors amount owing? Cash that should be coming in, but now may not ( a bad debt)

Also the shareholding will cause an accounting loss when written off.

Potentially both of these will show as an expense for MSNZ most likely causing a loss for the year

[Club racer]

Isn't it simply more likely it was a company (the MPL incarnation) that was never solvent from the word go? Loaded up with previous unpaid TV3 bills, Pukekohe bills (no wonder they went after Angus for the barrier damage) set up and trading on dreams, lies, empty promises and the fantasy that however many it was of those new cars had been sold following that PR drivel about all the deposits being taken. What's appalling is that this has obviously been at the expense of many decent people's livelihoods and income. Where I come from that's illegal. What a way to treat someone like Jono Lester. A good kid, a great ambassador for New Zealand Motorsport, a cracking driver and a hard working marketeer. Shame on all of those involved.

My bet would be that the Toyota boss, I forget his name, who was touted on here at some stage as being the Chairman of the Board of this outfit I believe, took one look at the books or P&L predictions at the very first meeting and called a (very sensible) halt. I reckon that's what happened and that's really when the game was up for MPL. And I believe the sequence of events support this theory 100%.

I hate the fact that you look at this list and are left with the impression that people like Fine and Short are out of pocket in the same way as someone like Jono is - Shameful.

[RogerH]

Originally Posted by flyingduck

Sorry to keep asking silly questions but if MSNZ loses no money as such only a potential asset why would there been increased levies to the license holders and members. I would think that it could happen now MSNZ is promoting the summer series but for the MPL items since they haven't offered a surplus for a while then why would that effect the normal club holder?

There are several areas of real money losses here - as peckstar pointed out, the amount MSNZ is owed as an unsecured creditor of MPL is a real cash loss. Despite asking the President of MSNZ how much is involved we still don't know the figure.
Then there are costs that MSNZ might have incurred with professionals such as lawyers and accountants in determining their risk and exposure as the majority shareholder in MPL.
As a result of the failure of MPL, MSNZ has taken over the promotion of Tier 1 and although they have stated they are not funding it, there are resources of the likes of MSNZ personnel being used for this promotion and these have a real cost if not totally reimbursed.
Another related issue is the acquisition by MSNZ of the NG NZV8 intellectual property for $57,500. We were initially told that MSNZ would recover $4000 per car sold but this was evidently wrong and the figure is only $2000 per car. This will require 29 of the NG NZV8s to be sold - probably an unlikely outcome. There is therefore a potential risk that some of this $57,500 will need to be written off.

[Goat Boy]

Does anyone REALLY think Mr Fine is out of pocket?

[KRDG]

Originally Posted by RogerH

You have to wonder what was really going on in TMC/MPL and whether the directors really had a handle on what the position was.

A few things to consider :

We were advised that TMC had an accounting system (MYOB?) so that up to date financial reports were available.

When questioned at the MSNZ AGM in May 2012 a TMC director / Chief Executive advised that the company was in good financial condition and should break even for the year.

Within a few months TMC was insolvent and on its way to liquidation with a loss of around $360,000 for the year.

This thread is providing a seriously good line of discussion.

Thanks guys for your comment and I just hope it will show those ex directoris and office holders of these entities that they will be held to account and have to answer the questions.

By the way, one of the creditors, Pope Print is where Bill Brown (ex director of TMC/MPL) works. The assocaition was missed in the opening list.

[nistfan]

Originally Posted by KRDG

This thread is providing a seriously good line of discussion.

Thanks guys for your comment and I just hope it will show those ex directoris and office holders of these entities that they will be held to account and have to answer the questions.

By the way, one of the creditors, Pope Print is where Bill Brown (ex director of TMC/MPL) works. The assocaition was missed in the opening list.

Does he still have a job then

[Speedwayracer44]

Originally Posted by KRDG

This thread is providing a seriously good line of discussion.

Thanks guys for your comment and I just hope it will show those ex directoris and office holders of these entities that they will be held to account and have to answer the questions.

By the way, one of the creditors, Pope Print is where Bill Brown (ex director of TMC/MPL) works. The assocaition was missed in the opening list.

The plot thickens then. Can you believe that two of the thugs that have been removed from the original company with the highest profile I might add are mad enough to have their names on the list after putting the company into a 360k hole due to their ego's taking charge of the cheque book and one of them got there job back. Dont know whos worst here, MSNZ or its employees.

[Goat Boy]

Originally Posted by Speedwayracer44

The plot thickens then. Can you believe that two of the thugs that have been removed from the original company with the highest profile I might add are mad enough to have their names on the list after putting the company into a 360k hole due to their ego's taking charge of the cheque book and one of them got there job back. Dont know whos worst here, MSNZ or its employees.

MSNZ officialdom particularly quiet on this thread. The two "thugs" you refer to are the ones that seem to have ruined everything for everyone. I can't imagine that even supporters of the MSNZ executive can fail to see that. But then again...