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DAVID Whitehead Textiles provisional judicial manager Mr Winsley Militala has been granted permission by the Master of the High Court to sell some of the troubled firm’s assets to meet security costs. Master of the High Court Mr Eldard Mutasa approved the disposals saying, given the circumstances, the request appeared reasonable.
In a letter dated July 1 2013 to the master Mr Militala said he expected to realise about $30 000 from the sale.
The funds are meant for urgent administrative issues including allowances for security guards and advocate’s fees saying defaulting would compromise his obligation to safeguard the firm’s assets.
“The request in my view appears to be reasonable under the circumstances given the proceeds are to meet administrative costs. As such, I have no objection to the request,” Mr Mutasa said.
Mr Militala said assets earmarked for disposal included all redundant vehicles comprising forklifts, tractors and associated spares as these could no longer be restored to useful working order.
The disposals will also include dyes and chemicals that were at the risk of being inactive due to lack of use over time, furniture, fixtures and shelving from the decommissioned Bulawayo shop.
Further, Mr Militala wants to dispose of remaining fabric and socks whose quality he said was deteriorating by the day as well as electric motors removed from de-commissioned machinery.
“It is not our intention to extinguish all the post judicial management (DWTL) debts from the proceeds of the auction, but to attend to some urgent administrative issues,” Mr Militala said.
However, he said the entirety of the proceeds realised from the sale of the assets would be consumed immediately on long overdue obligations and others that fall due two weeks after his request.
Mr Militala said, as indicated in one of the financial statements he submitted, post judicial management creditors stand at $198 000.
But retrenched workers of DWTL who were laid off in 2009 and are still to receive their dues have written to the Master of High Court expressing reservations over the disposal of the assets.
The workers claimed gross impropriety in the sale of the assets, but Mr Militala has hitherto vehemently dismissed the claims as malicious.
The mothballed textiles company was placed under its second spell of judicial management in 2010 having initially been put under judicial management from 2005 to 2008 under Dr Cecil Madondo.
A hearing meant to decide whether DWTL is put into liquidation or final judicial management failed to take place at the High Court yesterday because pagination of court papers was not orderly.
Judicial management is basically a process that gives prime consideration to rescuing a distressed company as a going concern through formulation and implementation of a reconstruction plan.
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