Edcon creditors launch last-minute court bid to halt business rescue talks

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A group of Edcon creditors have launched an 11th-hour high court application to halt two meetings on Monday at which a business rescue plan was due to be discussed and adopted.

Durban-based Kingsgate Clothing and Clematis Trading say in their urgent application, set down in the Pretoria high court, that they are acting on behalf of 11 other companies represented on a creditors' committee.They say as concurrent creditors they are now being offered 4c in the rand after initially being assured they would get at least 50c.

In the court papers, Kingsgate CEO Yusuf Vahed points fingers at the business rescue practitioners Piers Marsden and Lance Schapiro.They were also asking for an increase in their own fees from that prescribed “without setting out any motivation other than to say Edcon is a large company”. The retailer was placed in business rescue at the end of April this year and the practitioners were appointed at the beginning of May.

Vahed said between then and the beginning of June, when the rescue plan was published, “we were told to anticipate about 50c in the rand”. “When we saw the plan we were completely shocked and startled. For Kingsgate it would mean a recovery of only about R960,000.”

 

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