Home Business Nakumatt’s receiver wins extension to pay creditors

Nakumatt’s receiver wins extension to pay creditors

by kenya-tribune
4 views
News

Nakumatt’s receiver wins extension to pay creditors

Nakumatt was forced to close down dozens of outlets from 2017 as it struggled to repay its suppliers, landlords and other creditors. FILE PHOTO | NMG 

The term of the administrator of fallen retail giant Nakumatt has been extended to allow him to reconcile the accounts and distribute funds to creditors.

High Court judge Maureen Odero Tuesday gave the administrator Peter Kahi up to March 9 pending the mention of the case before another judge.

Mr Kahi, whose term was set to end Wednesday, had asked for at least six months to complete the task.

“In order to comply with the resolution of the majority of the creditors, I need to reconcile all the accounts herein and thereafter to distribute and appropriate funds to the various classes of creditors after meeting the administration costs as required by the Insolvency Act,” he argued in his application.

But Justice Odero said that the matter was being handled by Justice Mary Kasango and she could only extend the term until the latter returns.

advertisement


The shareholders of Nakumatt Holdings on January 7 voted to dissolve the former retail giant.

Mr Kahi had proposed that, the sale of assets to Naivas Ltd having been concluded, he appropriate funds of the company to the various classes of creditors in line with the Insolvency Act, 2015, after meeting the cost of the administration.

He said he would need to return stock to suppliers from branches that were closed, collect funds due to the company, assist in settling the liabilities incurred during the period.

In addition, Mr Obondo argued, he had to disengage contracts and obligations to various service providers without exposing the company to any litigation arising from breach of contractual obligations.

“It is practically impossible, given the Sh38 billion debt exposure of the company, to do that before January 22, when the term ends,” he said.

While extending the term last year, Justice Kasango directed him to conduct the financial position of Nakumatt Holdings Limited within four months and call a creditors meeting within six months. The creditors, who include banks, suppliers and landlords, are owed Sh38 billion. The administrator will share out about Sh422 million that was raised from the sale of six Nakumatt branches to Naivas.

You may also like