Tremain Chris: Insolvency Law Reform Bill — In Committee 
Tremain Chris: Insolvency Law Reform Bill — In Committee 
[Volume:634;Page:6043] 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to Part 5 of the Insolvency Law Reform Bill and to the different means within this bill that can be put forward to deal with people—companies in a range of different corporate and individual structures—who get themselves into the position of being unable to pay their bills. I must say that over the course of the last 15 years I have had some personal experience with a number of individuals and companies that have unfortunately got themselves into that position. They have got into a situation where they have owed my own business money and we have been faced with having to deal with their bankruptcy and trying to recover money from either an individual or a company we have put our trust in and have done business with over a period of many years—in some cases for decades. In one instance in one of our travel businesses we had dealt with the person concerned for decades. 
It is a very difficult situation when one of the businesses in a relationship like that goes into bankruptcy. I can assure members that not all companies deal with bankruptcy in a draconian way and look to bedevil the poor guy who has got himself into that situation. In fact many companies look for alternative ways to help those people because bankruptcy as we know is not just about the financial impact of that situation on people but also about the mental and psychological impact on them on their family on their friends and on their whanau. I think one does need to take that into account. There are those who go bankrupt and break the law in doing that—they actually go out of their way to put themselves into a difficult position. But I am talking about guys who have been in business for a long time and who through no fault of their own get themselves into a difficult situation. 
One example we were involved with concerned a building company that put up the AMP building in Napier. Because the head contractor for that building project had gone bankrupt Linnell Building and Joinery in Hastings unfortunately got itself into a position where its head contractor did not pay the bills. It was such a major contract that that company then got itself into a situation where it turned bankrupt. Really Linnell Building and Joinery had done nothing wrong but it found itself in a difficult situation with many companies in Hastings including my own at that point—I think we had just sold a property for that individual and he could not pay the commission. In that case we sat down and used the proposals situation referred to in Part 5 of this bill to help the company out. I am pleased to say that the firm is now back on its feet again and is one of the best building companies in Hastings not only in residential joinery but also in a whole range of building products. That firm does homes and commercial properties and it is back on its feet again. I think it was helped by the proposals situation and by everyone getting on board on that. The company also does a lot of work in my own constituency of Napier which is good to see. 
Part 5 deals with four different types of procedure that can be undertaken in a bankruptcy situation. I will make a few comments about each. The first is composition. In that situation creditors put forward a resolution to help the individual person or company out. That in many cases works well. Often creditors accept a lesser amount than is due to them. That can help people to get out of difficulty as was the case with my friends in Hawke’s Bay in their particular situation. The very few changes made to Part 5 in the Commerce Committee were small ones. The second procedure is proposals. That is the situation where instead of the creditors putting forward a solution the bankrupt company is able to put forward its own proposal for getting itself out of that situation. Another situation with which I was involved in the Napier electorate concerned a business called Linden Estate Winery and Vineyard a company that got itself into a difficult situation and overcommitted itself by taking on a number of vineyard leases.