Nakumatt gets relief as creditors blocked
What you need to know:
- Creditors have in the recent months filed several suits claiming that the retail chain has not met its debt obligations.
- Nakumatt has also been holding talks with some of its creditors to reach an out-of-court settlement.
Retail chain Nakumatt has been reprieved from its creditors after a court stopped all attempts at attaching its property to offset debt arrears.
Creditors have in the recent months filed several suits claiming that the retail chain has not met its debt obligations.
They have sought to attach its property in a bid to recover monies owed to them.
INSOLVENCY CASE
However, High Court Judge Joseph Onguto stopped them.
He also ordered Nakumatt to publish an advertisement within a week with a view to inviting all creditors interested in appearing in the ongoing insolvency case to file their respective court papers.
“It is hereby ordered that all creditors of the company Nakumatt Holding Limited are prohibited from conducting any attachment, sequestration, distress and/or execution against the company’s assets until further orders of the court,” Justice Onguto ordered on Monday.
CREDITORS
The directive effective puts four major creditors at bay.
They include High Park Mall, which is located in Nairobi’s Parklands suburb, Roysambu-based Thika Road Mall (TRM), Integer Limited on Uhuru Highway, which hosts Nakumatt Mega, and Highport Properties, which has leased six godowns that it owns to the retailer.
High Park Mall is demanding Sh8.8 million, TRM Sh51 million, Integer Sh23 million and Highport Properties Sh5 million in rent arrears.
Under the law, property belonging to a company or individual facing insolvency proceedings in court is protected from attachment for the purpose of recovering debt.
SALARIES
Nakumatt has also been holding talks with some of its creditors to reach an out-of-court settlement.
Monday’s order has also thrown into disarray another application against Nakumatt by its employees, who are fighting to be paid their salaries.
The staffers, through the Kenya Union of Commercial, Food and Allied Workers (Kucfaw), claim Nakumatt has delayed their salaries, failed to pay overtime worked on time and was not implementing the 11 per cent salary increase from May 1, 2017 to July 30, 2018.
REMITTANCE
The supermarket chain has also embarked on a unilateral intention to reduce shift hours from 13 hours to 10 hours with the intention of reducing overtime costs.
It is also not remitting pensions, pay as you earn (Paye) deductions, loan repayments, sacco contributions, private insurance schemes deductions, and union dues.
The insolvency case will be mentioned on September 18.
