The Nation Newspaper

Tag: bankruptcy

  • $101m ‘bankruptcy’: Alleged contempt hearing for Oct 20

    $101m ‘bankruptcy’: Alleged contempt hearing for Oct 20

    The Federal High Court in Lagos yesterday fixed October 20, to hear Access Bank’s application alleging contempt by a businessman, Dr. Ambrose Bryant “ABC” Orjiako in a bankruptcy suit by the bank against him.

     The application, filed by the bank through its counsel Mr. Kunle Ogunba (SAN), is seeking an order declaring that the alleged debtor is in violation of an order of court by deleting possession marks from the fence of two properties in dispute.

    It is also seeking an order compelling the alleged debtor to purge himself by putting back the possession marks on the properties.

     Access Bank Plc filed the suit marked FHC/L/BK/08/2023, following the alleged inability of Orjiako, to pay $101 million the bank claims he owes.

     The respondents in the suit are Seplat Energy Plc; Helko Nigeria Limited, Neimeth International Pharmaceuticals Plc; Salvic Petroleum Resources Limited; Zebbra Energy Limited; Ordrec Group Limited; Helko Marine Services Limited; Berwick Nigeria Limited; Abbeycourt Petroleum Company Limited; Abbeycourt Energy Services Limited; Abbeycourt Company Limited and Pursley Resources Limited.

     The judge had on July 26, while granting an ex-parte motion filed by Access Bank through Ogunba, froze Orjiako’s bank accounts and other assets over the alleged indebtedness.

     He ruled, among others, that the order subsists pending the determination of the bank’s motion on notice for the appointment of a special manager.

    At the last hearing of the matter on September 26, Babajide Koku (SAN), who led a team for the 2,3,4,7,8,9,10,11 and 12th Respondents, moved an application to vary or correct a purported error in the court’s order.

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    Ogunba adopted the Creditor’s Counter Affidavit and Written Address filed in opposition to the application.

     Consequently, the judge adjourned till yesterday for ruling.

    At the resumption of proceedings, Justice Nicholas Oweibo held that there was no error or mistake in the court’s order.

    He dismissed the 2nd Respondent’s application noting that the preservative orders of court (granting possession to Access Bank) made in the suit subsists, adding that the Debtor and family his be allowed temporary access to their residence.

    Ogunba led a team on behalf of the Creditor (Access Bank); Anthony Idigbe (SAN) led a team on behalf of the Debtor; Opeyemi Adekoya for the 1st Respondent; T. Ipaye for 2,3,4,7,8,9,10,11,12 Respondents; Dr. K. O. Ezeoke for the 5th-6th Respondents; and Oluwakemi Balogun (SAN) led a team for Zenith Bank Plc./Party affected by the preservative order of court.

    Earlier, Ogunba informed the court of the creditor’s affidavit and pending Motion on Notice both dated 29th September, 2023 seeking to notify the court of the Debtor’s alleged continuous contempt of court wherein he unlawfully repainted the fences of the attached properties {6 Agodogba Street, Parkview Estate, Ikoyi and 25A, Lugard Avenue, Ikoyi}; thereby defacing the marks of execution thereon.

    But the alleged Debtor’s counsel, while maintaining ignorance of this incident, maintained that he was yet to get feedback from his client.

    After delivering its ruling on the application seeking to correct the alleged error and/or omission, Justice Oweibo adjourned till October 20, 2023 to hear Access Bank’s application dated 29th September, 2023.

  • Alleged $101m bankruptcy suit for ruling October 3

    Alleged $101m bankruptcy suit for ruling October 3

    Justice Nicholas Oweibo of Federal High Court sitting in Lagos yesterday adjourned till October 3 to rule on an application to interpret its orders in a bankruptcy suit filed by Access Bank against businessman, Ambrosie “ABC” Orjiakor.

     Access Bank filed the suit FHC/L/BK/08/2023, following inability of Orjiakor, to pay $101 million he allegedly owes the bank.

     Listed as respondents Seplat Energy; Helko Nigeria; Neimeth International Pharmaceuticals; Salvic Petroleum Resources; Zebbra Energy; Ordrec Group; Helko Marine Services; Berwick Nigeria; Abbeycourt Petroleum Company; Abbeycourt Energy Services; Abbeycourt Company and Pursley Resources.

     The judge on July 26, while granting an ex-parte motion filed by Access Bank’s lawyer, Kunle Ogunba (SAN), froze Orjiako’s accounts and assets over alleged indebtedness.

     He ruled, among others, that the order subsists pending determination of the bank’s motion for appointment of a special manager.

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     When the case resumed yesterday, Ogunba led a team of counsel on behalf of the creditor, whereas Anthony Idigbe (SAN) represented Orjiakor

    Opeyemi Adekoya was for the first respondent, Babajide Koku (SAN) led a team for 2,3,4,7,8,9,10,11 and 12th respondents, A. C. Onuoha was for the fifth and sixth respondents while Oluwakemi Balogun (SAN) led a team for Zenith Bank/party affected by preservative order of court.

     There were other legal representations for the banks.

     Ogunba informed the court Orjiakor carried out an unlawful conduct by (in the company of his private security men)  invading the property at 25A Lugard Avenue, Ikoyi, in defiance of the orders of court.

     Koku argued it was bailiffs of the court that executed the order. This was disputed.

     The senior lawyer informed the court he had an application to vary or correct a purported error in the order of the court made on August 17.

     After submissions, the court agreed to hear Koku’s application to interpret the preservative orders; vis a vis variation at the last adjourned date.

    He moved his application and adopted his further affidavit and reply on point of law.

     Ogunba adopted the creditor’s counter affidavit and written address filed in response to the application.

     Consequently, the judge adjourned till October 3.

  • South African Airways faces bankruptcy

    South African Airways (SAA) is on the edge of bankruptcy,  information made available to the  country’s parliament has revealed.

     According to the BBC, “The national carrier may soon be unable to pay salaries”, adding, “The cash-flow statement shown to MPs and seen by the BBC paints a picture of an airline haemorrhaging cash”.

    It says that matters may improve by October, but only if it gets a 792m-rand (£45m) bailout from the government.

    Even then, the situation is expected to deteriorate again by December with a forecast cash outflow in that month of £38m.

    The airline has lost money in each of the past seven years. Acting chief executive Musa Zwane, who has led the company for the last 18 months, has been trying to put together a recovery plan since January.

    “Essentially insolvent”

    Last month, the Treasury paid out £125m to settle a loan from Standard Chartered Bank‚ which the bank had refused to extend.

    South Africa’s Finance Minister, Malusi Gigaba, has disclosed that SAA asked the Treasury in March for a £560m recapitalisation. He is expected to give an answer by October.

    Alf Lees, the deputy finance spokesman of the opposition Democratic Alliance, said: “Essentially they are insolvent and should have filed for liquidation.

    “We believe that the directors are in breach of the South Africa companies act by continuing to trade recklessly knowing that SAA will not be able to meet its financial commitments and without any guarantee that the shareholder (the South African government) will be prepared to continue to bail them out.”

    Unions marching

    In 2015, consultants Ernst & Young presented a report to the government into 48 of the largest contracts awarded by SAA. The report showed that 28 of them, or 60%, were improperly negotiated, poorly contracted or weakly managed.

    The airline is also facing pressure from its unions. The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) are planning a march on Friday to SAA’s Johannesburg headquarters.

    An NUMSA spokesperson said: “Corruption at SAA is rife, it’s clear that the state owned entity is being looted.

    “The report by Ernst & Young paints a picture of rampant mismanagement, fraud and corruption. SAA has lost billions because of tender irregularities.”

    The unions are also threatening strike action over pay, claiming that pilots have been getting generous pay awards while cabin crew, ground staff, cargo staff and technical staff have been refused wage rises.

  • Ecobank seeks to appeal ruling in bankruptcy case against Otudeko

    Ecobank seeks to appeal ruling in bankruptcy case against Otudeko

    …. Honeywell Group chair opposes application

     

    Ecobank Nigeria Limited has applied to the Court of Appeal in Lagos for extension of time to enable it seek leave to appeal a ruling by Justice Babs Kuewumi of the Federal High Court in Lagos in a winding-up petition against chairman of Honeywell Group, Oba Otudeko.

    The bank initiated the bankruptcy proceedings against Otudeko over an alleged N5.5billion debt by virtue of loan facilities availed Honeywell Flour Mills Plc, Siloam Global Services Limited and Anchorage Leisures Limited, said to have been personally guaranteed by Otudeko.

    The appellant is seeking an order by the Appeal Court granting it leave to appeal the ruling delivered last February 19.

    The ruling followed the winding-up petition filed by Ecobank on October 17, 2015, accompanied by motion ex-parte and motion on notice.

    The bank said the petition was a bid to recover the money from Otudeko “considering  the looming and impending danger of having its banking licence withdrawn after the respondent failed to liquidate its indebtedness after several demands.”

    Justice Okon Abang, who first handled the case, asked the bank to put the respondent on notice to show cause. After being put on notice, Otudeko filed a motion on notice seeking to dismiss/strike out the petition.

    Justice Kuewumi, who took over from Justice Abang, ruled that he would accord higher priority to Otudeko’s motion on notice ahead of other pending applications.

    Dissatisfied with the ruling, Ecobank appealed. The Court of Appeal, last October 21, struck out the appeal on the basis that the appellant did not first obtain leave of the lower court before appealing.

    The bank is, therefore, seeking for reliefs to enable it invoke the Court of Appeal’s jurisdiction to entertain the appeal.

    “The applicant (Ecobank) ran out of time to appeal as a result of the previous proceedings in suit no CA/L/227/16 which was not determined on the merit as a result of failure to procure the needed leave.

    “The leave of this court is required to extend time to obtain leave of court to appeal the ruling of lower court. It is in the interest of justice that this application be favourably considered and granted accordingly,” the bank prayed.

    The bank, through its lawyer Mr Kunle Ogunba (SAN) is seeking a receiving order against Otudeko’s estate, funds, investment and shares in Honeywell Group, Honeywell Flour Mills, among other companies, as well as an order declaring him bankrupt.

    Ecobank prayed for an order commanding Otudeko to immediately avail it the companies’ statement of affairs as well as net worth and other credible financial details as required by the Bankruptcy Act.

    It asked for a consequential order empowering the bank to sell Otudeko’s properties wherever they are situated, as well as an order enabling it to utilise the investments or shares in companies in which Otudeko has interest.

    In a motion on notice, Ecobank, among others, is also seeking an interlocutory order appointing a special manager and receiver over Otudeko’s assets.

    But, Otudeko, in its counter-affidavit sworn to by Omolade Adeyemi, has urged the Court of Appeal to refuse Ecobank’s application.

    He said the bank had prosecuted the subject-matter of the appeal and judgment had been given in which the Court of Appeal upheld his preliminary objection and struck out appeal.

    The respondent said the appellate court also attended to the appeal on its merits, considered arguments by parties and affirmed the correctness of Justice Kuewumi’s ruling.

    “It is in the interest of justice to refuse the applicant’s application,” Otudeko said.

    In the lower court, the Honeywell Group’s chairman said the alleged debt “is neither ascertained nor undisputed.”

    He added that Honeywell Four Mills and its sister companies commenced a suit against the bank before another judge “owing to disagreements between it (Honeywell) and the respondent (Ekobank) as to the complete liquidation of their outstanding obligations to the respondent having regards to the terms and condition of the credit facility.”

  • U.S.: Colt files for bankruptcy

    Connecticut-based gun maker Colt Defence has filed for bankruptcy protection, as it grapples with a heavy debt load.

    The company says it plans to continue its normal business operations during its restructuring.

    The company is struggling with more than $350m (£225million) in debt, as well as waning sales.

    Colt’s fortunes were hurt by a loss of a contact in 2013 to supply the US army with its M4 assault rifle.

    Keith Maib, the company’s chief restructuring officer, said in a statement: “Colt remains open for business and our team will continue to be sharply focused on delivering for our customers and being a good commercial partner to our vendors and suppliers”.Colt has been plagued by financial problems in recent months.

    Last November, Colt took out a $70million loan from Morgan Stanley to help make an interest payment.

    But last month it missed a $10m interest payment.

    Last year sales of its sports rifles and handguns fell 30 per cent.

    The company has a long US history, known for making American firearms for more than 150 years.

    The company previously filed for bankruptcy protection in 1992, emerging again two years later.

  • Batista bankruptcy accord propels shipbuilder OSX’s bonds

    OSX Brasil SA (OSXB3), the shipbuilder founded by former billionaire Eike Batista, is surging to a six-month high in the bond market after its sister company and biggest client moved closer to emerging from bankruptcy.

    OSX’s $500 million of notes due 2015 have soared 8 cents to 88 cents on the dollar since December 25, when Batista’s Oleo & Gas Participacoes SA said creditors agreed to convert $5.8 billion of debt into a 90 per cent equity stake, letting the oil company avoid liquidation. The gain is the biggest among emerging-market bonds globally that are secured by collateral pledges, according to data compiled by Bloomberg.

    The shipbuilder, which obtained a minority stake in Oleo & Gas in exchange for forgiving $1.5 billion in unpaid bills, will profit as the producer gets as much as $215 million of financing to pump oil at a field that uses an OSX platform, according to Fabiano Santin, an analyst at Kondor Invest.

    “You’re removing this uncertainty,” Santin said in a telephone interview from Sao Paulo. “The tangible assets of this company are much higher than where it is trading.”

    Batista, once the richest Brazilian with a fortune that topped $30 billion, now has a negative net worth after the collapse of the oil producer, which plans to exit bankruptcy in March. The OSX notes sank 23.5 cents last year on speculation revenue would dry up as the oil producer, formerly known as OGX Petroleo & Gas Participacoes SA, carried out Latin America’s biggest-ever corporate default.

    OSX’s bonds held up better than those of Oleo & Gas, whose securities tumbled almost 82 cents, because they’re backed by the OSX-3 offshore platform.

    OSX didn’t immediately respond to an e-mail or telephone call seeking comment on the gains in its bonds.

     

  • PTDF bankruptcy alert

    PTDF bankruptcy alert

    The Senate Committee on Petroleum Resources (Upstream) is right to have handed a seven-day deadline to the management of the Petroleum Technology Development Fund (PTDF) to provide a record of its earnings from all sources in the last five years. It is also right in directing that the PTDF should provide a comprehensive list of its portfolio investments. Chairman of the committee, Senator Emmanuel Paulker, gave the ultimatum to the PTDF management, led by its executive secretary, Dr. Oluwole Oluleye, during the committee’s visit to carry out its oversight function on the agency.

    What the Senate committee discovered was as unexpected as it was disappointing. Dr. Oluleye told the committee tales of woe, to the surprise of the members. He said the PTDF would be completely bankrupt within the next few months unless the Federal Ministry of Finance paid it the amount of N57bn budget backlog for 2013. He then enumerated the catalogue of woes faced by the PTDF.

    First, that the non-payment of the above amount to the agency could deprive Nigerian students currently on the PTDF scholarships in foreign universities of their grants. Second, that the PTDF has not been able to pay workers’ salaries in the past two months, due to cash crunch. Third, that the multi-billion dollar statutory “signature bonus” payments had been withheld from PTDF for some years.

    However, as Paulker’s team noted, the agency’s bankruptcy claims were untenable. In the first place, the PTDF had “several portfolio investments and other sources of income which are shrouded in secrecy”. How then is it possible to know its true financial position? Not only this, the committee boss also faulted the practice of anticipatory budgeting of the agency, pointing out that the practice was “criminal and negated the Procurement Act”. He queried: “What happened to your (PTDF) investment portfolios? You cannot say because signature bonus has not been paid, you are suddenly broke and cannot pay salaries and fund scholarships abroad. I think it is an indictment of the PTDF and you are being economical with the truth”.

    We wonder why the PTDF should be on its way to bankruptcy when it had a budget that was duly passed for its operations, and which, according to the committee members’ findings, the agency declared N123,205,016.77 in “Excess of Income Over Expenditure”. How can we sustain its claim of inability to pay workers’ salaries and meet sundry financial obligations? Worse is the opacity of the agency’s operations. For instance if, as the Senate committee noted, that it has investment portfolios which should be generating money for it, why should the money generated from these investments on a regular basis be shrouded in secrecy?

    The PTDF should be given its due under the laws. Indeed, we do not understand why it should be deprived of funds duly allocated to it in the budget. This is, however, not to say that its operations cannot be probed with a view to determining how it has been spending public funds from its budget allocations and investment portfolios.

    Moreover, appropriate sanctions should be meted to whoever is found to have been involved in the situation whereby the country has had to beg foreign universities over our inability to pay our students’ fees, thus embarrassing the Federal Government, and worse still, possible misappropriation of funds in the agency. To whom much is given, much more is expected. Perhaps PTDF’s bankruptcy claim is an attempted cover-up or a diversionary tactic, or both.