Twist in battle over troubled Edwafin

2009-04-17 00:00

THE troubled Hillcrest-based Edwafin Investment Holdings (Proprietary) Limited has avoided provisional liquidation for at least another month.

However, in a new twist, key Edwafin role-players yesterday lodged an application for the firm to be placed under judicial management.

This may be granted if a company is unable to pay its debts while there is still a probability that it can continue to conduct its business.

In March, retired Howick resident Dorothy Griffin, who invested R60 000 with Edwafin four years ago, applied to the high court in Pietermaritzburg for the company’s provisional liquidation because since November/December 2008, Edwafin had failed to pay interest on her investment.

Griffin’s provisional liquidation application was set down for argument yesterday.

Edwafin opposed the application on the grounds that the company is not insolvent and that it can in fact pay its debts.

Earlier this week, another debenture holder — Teresa Chaplin, who invested half-a-million rand — brought an application to join Griffin in seeking Edwafin’s provisional liquidation. Neither of these applications could proceed, however, as certain key Edwafin role-players — including CEO Patrick Stapleton and three others — yesterday lodged an application for Edwafin to be placed under judicial management.

What is a debenture?

A debenture is a type of debt instrument that is not secured by physical asset or collateral.

Debentures are backed only by the general creditworthiness and reputation of the issuer (such as a company). It carries an undertaking that the debenture holder will get a fixed return (fixed on the basis of interest rates) and the principal amount whenever the debenture matures.

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