Veritas sues Nosh over unpaid debts

Veritas chairman Tim Cook said the failure to pay Nosh’s creditors was a breach of the sale and purchase agreement
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NZX-listed Veritas Investments is suing the buyer of grocery chain Nosh, alleging it failed to meet obligations to pay $1.9 million to Nosh creditors.

In a statement to the NZX, Veritas chairman Tim Cook said the failure to pay Nosh’s creditors was a breach of the sale and purchase agreement.

“We entered into this transaction in good faith after a rigorous process and it is extremely disappointing that the directors of Gosh Holdings Limited (now Nosh Group Limited) have clearly failed and continue to fail to meet their financial and legal obligations.”

The Nosh chain was acquired by Gosh Holdings, since renamed Nosh Group, in February, but quickly ran into difficulty with suppliers after missing promised payments.

The stores were closed today and staff left unpaid after further finance did not materialise.

Veritas said it was itself a creditor of Nosh Group to the amount of $68,549, which is owed for meat supplied through the Mad Butcher.

It said at the time of sale the amount owed by Nosh to creditors was $1.9 million, which the new owner had agreed to pay.

Although Veritas is suing Nosh Group, creditors owed money by the chain while it was under Veritas ownership are entitled to seek recovery from the Veritas subsidiary.

Veritas acknowledged that those obligations remained with its subsidiary, now named Old NGL. However, “Veritas is not a guarantor and so has no financial exposure. Old NGL Limited has no assets to meet the creditor payments that Gosh Holdings Limited (now Nosh Group Limited) committed to pay.”

Several suppliers have told NBR they are considering suing Old NGL to recover money owing. 

Mr Cook said in taking legal action Veritas was enforcing its contract with Nosh Group.

“We are asking them to meet their obligations,” he said. “It’s not about us getting $1.9 million off them. So in a way we’re hopefully helping the creditors of Nosh.”

Mr Cook said the legal action had been filed to the high Court today.

“You have to assume they’re not going to front up with a cheque for that amount of money,” he said.

At the time of the Nosh sale, the buyers had provided documentary evidence and undertakings they had enough money to pay the creditors, said Mr Cook, “so in good faith we continued.”

Nosh Group director Andrew Phillips has not returned calls seeking comment.

Mr Cook said he had last spoken to Mr Phillips about 10 days ago. Veritas’ legal adviser Harmos Horton Lusk had subsequently sent documents to him putting him on notice, he said.

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21 Comments & Questions

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So have Gosh ( now Nosh )sent all the takings for the last few months to the Caymans and not paid anyone?

What a fine pickle.....

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A bit rich Nosh suing Gosh - they should have made sure that Gosh was in a position to pay creditors

Morally and ethically Nosh under Tim Cook owe the money.

(Edited)

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Lifestyles of the rich and famous, poor franchisees its always the working man that gets caught up in this corporate bulls--t and loses everything.

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Well the true stink from that deal didn't take long to reach the surface.

I wish business deals like these that have the clear intention to screw all the little guys involved hadn't become so common-place in NZ. It really is like a form of corruption by another name, even if the legal fraternity somehow twist it otherwise. Integrity and credibility can only only get sold once.

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Exactly, and the common theme is generally traced back to someone related to 42 Below

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Yes it's a shame that the small investor always gets left to carry the can so to speak. Thank god there's a govt watchdog watching over all these outfits for the little guy... On reflection disregard that second sentence. We're all alone out there.

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Strange how our "free markets" seem to omit the freedom to hold bad practitioners to account for their actions, instead letting them hide over and over behind limited liability.

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The creditors need to get together, seek to get a liquidator appointed to Old NGL, and have that liquidator seek to undo the capital repatriation up into Veritas that must have occurred once it sold its assets. Get Damian Grant on the job perhaps?

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Lol, Damian Grant.

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Omigosh! Didn't realise just how sick this pup was when they bought it and have decided to let it expire rather than spend money nursing it back to health.

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How about a name and shame of all the parties, Directors and Chairmen involved.
Not every small investor or creditor has access to this information.
Letters and phone calls by those owed the money to those who run these organisations need to be confronted rather than hiding and not returning calls from media -NBR etc- calls.

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Veritas (and ANZ) would have done anything to get this off their books, including shutting it down. What a joke that they now say they are being the good guys trying to force Gosh to pay up... I hope the receiver seeks to unwind this fiasco and return Gosh to Nosh, my what a Stoush (was as close to rhyming as I was capable of...).

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Its not just about doing a deal, its also about the quality of a deal. Bad deals always come back to bite you.

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Veritas trying to raise funds to prop up their other failing acquisitions.

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An investment group that can't manage its own investments. Cook & Co. should just pack it in and do something more commensurate with their abilities, such as stacking shelves, rather than endangering the livelihoods of the store workers through their ineptitude.

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As a former supplier to The Mad Butcher I can confirm this 'hands off' approach by Veritas is totally consistent with the way they do [did] business.

The creditors debt should have been tied-up & included within whatever funds were paid at the date of settlement/sale.. that they weren't just shows they cover their backsides & to hell with everyone else.

Disgraceful.. again.

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Mad butcher will end up the same as nosh and those corporate pri__s will still be living in their million dollar mansions while the poor franchisees will be left with a lifetime of debt and possibly bankruptcy.
Disgraceful! (edited)

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We popped down to the local Nosh store on Saturday to get one of their fab Black-Rock meat pies for dinner. Unfortunately they were closed, but there was a sign on the door saying 'Back in 5'......as my hubby said, ""As least it sounds positive"

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We popped down to the mad butcher papanui in chch to find it closed have been shopping there for 11 years whats up with that? two stores in chch closed in 18 months, whats going on sir pete!!!!

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Maybe it's just their *marketing budget* doesn't allow for supply of the Door Signs like Nosh have got ?

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I see this article is not 'Subscriber Restricted' & tends to attract a different observer - surely those with an opinion, to which they are entitled.

This failing of Veritas & their very public disregard for the very standards that their founder presumably stood for, will be their [Veritas'] epitaph.

Peter Leitch unfortunately will wear this tarnish, despite the fact he has ensold.. but because it was nepotic, he has to wear that.. and maybe, in time, we will find compliance too - who knows..

Keep those minds open.

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