MyPages negotiates for a future
The directors of the ailing Nelson-based MyPages phone directory will decide next month if the business has a future.
Chairman Geoff Lawes said whether the company published a third edition or "pulled the plug" depended on it getting further funding from shareholders, finding the right staff and resolving legal and financial issues related to the previous owners of the business.
It would be difficult but he remained hopeful that negotiations now under way with various parties would clear the way for the business to continue, Mr Lawes said.
MyPages, which was set up to provide competition to Yellow Pages, published editions in 2010 and 2011 covering the top of the south region, but lost heavily on both editions despite a change in ownership.
The original company and another set up later by founder James Gordon racked up debts of more than $600,000 before closing the doors after a costly court battle with its printer. The venture was resurrected by a new company, MyPages (2011), formed in February last year by Mr Lawes and other investors, which leased the intellectual property to publish the directory in return for a licensing fee.
But Mr Lawes, who is also chief executive of Fico Finance, said the new company also traded at a substantial loss last year "brought about by unfortunate circumstances including aggressive competition, tough economic times and alleged in-house fraud, now before the courts".
Creditors had been paid, but the loss was large enough to make the directors question whether the business was commercially viable, he said. However, despite Yellow Pages' own struggle to make money, he believed the concept was still worth pursuing, particularly if the directory could be expanded to cover the whole country.
"Ultimately the web is where it will be but there are still a lot of people who want to pick up and use a directory. I'm hopeful there will be another issue."
Meanwhile, creditors of the original MyPages companies are crying foul after not being paid what they were promised.
MyPages (2011) agreed to progressively pay them off under a compromise scheme entered into by its predecessors in March 2011.
Creditors were supposed to be paid 5 per cent of what they were owed within 40 days of the agreement and 15 per cent within 21 days of the 2011 directory being published, with further instalments of 20 per cent following future publications.
However, unsecured creditors spoken to by the Nelson Mail said they had not received the 15 per cent promised and that MyPages had been difficult to deal with.
Bernie Roberts, general manager of Auckland-based Webstar, said despite regular reminders they had not been paid the $70,000 they were owed.
Pew Singh, the director of a Golden Bay internet marketing company, said he was owed $11,000, which was a lot for a one-man business like his. He said it was high time Mr Lawes and his fellow investors, who included other Fico Finance directors, met their legal obligations to the original creditors, particularly if another directory was planned.
He rejected a "preposterous offer" made by the company in January to pay 1 per cent of his debt to settle the matter.
Mr Singh said he had received an email last month from Mr Lawes which said they were negotiating with two parties to ensure the future of MyPages in some form, as further investment was needed to kick start the business. However, Mr Lawes had warned that the only way the creditors would be paid was from profits of the new venture and that any attempt to liquidate the company "will squash any hope of any further repayments".
Mr Singh said the repayment scheme said nothing about profits having to be made before creditors got their money and the shareholders should settle the debts.
But Mr Lawes said his company had never given any guarantees it would pay and any further payments were entirely dependent on the success of the new company.
"Creditors should be extremely grateful they got the 5 per cent as they would have got absolutely nothing if we hadn't come along."
Mr Lawes said external creditors of the old company, including the Inland Revenue Department, were still owed in excess of $270,000. The IRD had been partially paid.
- © Fairfax NZ News
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