High Court Writer
THE historic family-owned Twee Jonge Gezellen wine-producing business has been placed under provisional liquidation after it emerged that it was in dire straits financially and had only R1 million “at its disposal”.
The provisional liquidation, made an order of the Western Cape High Court earlier this month, comes after the owners of the estate made attempts to try to save the business.
In an affidavit before the court, sole director and shareholder Nicolas Krone said Twee Jonge Gezellen’s financial difficulties started when it suffered a loss of earnings of R21.6m after it was supplied with contaminated bottles.
This led to lengthy unsuccessful litigation and an additional R1.5m in suppliers’ costs, which it was ordered to pay.
“The legal battle crippled the applicant,” he said.
Later, it started falling into arrears with its repayments to the Land and Agricultural Bank of SA (Land Bank).
This led to litigation and, in terms of a high court judgment, the business owes the Land Bank R38m.
According to Krone, he and his wife had already exhausted their pension funds and personal savings to invest in the business.
He said that they had only R1m at their disposal.
Recent audited financial statements were not available, he said.
He provided the court with a business rescue plan and said that they had been awaiting the outcome of a funding request to the Industrial Development Corporation.
Krone said that if the court placed the business under judicial management, he was confident that it could pay its debts and become a successful concern again.
The high court placed it under provisional judicial management in April.
However, just over a month later, the Land Bank applied to intervene, claiming that the judicial management application was brought in an attempt to avoid repaying its debt to the bank.
Marius Hein van Wyk, of the Worcester branch of the Land Bank, said in an affidavit that he denied that the company, if placed under judicial management, would be enabled to meet its obligations and become a successful concern.
He added that the applicant failed to place facts before the court to justify such a conclusion.
Van Wyk submitted that it would be in the best interests of the body of creditors for the company to be wound up.
“In this regard, I wish to point out that the applicant has been unable for a considerable period of time to pay the debt owing to the Land Bank and had, instead, employed various stratagems in order to avoid payment of the Land Bank’s debt,” Van Wyk said.
He asked the court to discharge the provisional order of judicial management and to place the company under provisional liquidation.
On September 7, the parties reached an agreement, which was made an order of court by Cape Judge President John Hlophe.
According to the order, the judicial management application was withdrawn and the business was placed under provisional liquidation.
The case returns to court on October 27, when interested parties have to show cause why a final liquidation order should not be granted.