Another Westpoint company on shaky ground

An associated company of Westpoint, Cinema City Mezzanine, is facing liquidation in the Federal Court of Australia as the Australian Securities and Investments Commission (ASIC) commences proceedings to wind up the company.

ASIC contends that Cinema City is insolvent and has no directors to properly manage its affairs.

Cinema City raised about $2.5 million from 34 investors through the issue of promissory notes, which remain unpaid despite being due in 2005.

Most of this money was made up of roll-overs from other Westpoint mezzanine investments and was not represented by funds credited to Cinema City’s account.

Meanwhile, the court has appointed receivers over the property of several Westpoint directors and three companies associated with Norman Philip Carey.

Carey, Graeme John Rundle, Cedric Richard Palmer Beck, John Norman Dixon, Richstar Enterprises, Westpoint Realty and Redchime will be subject to the receivership.

The court ordered that the receivers have the power to identify, preserve and secure the property of Messrs Carey, Rundle, Beck and Dixon who otherwise remain able to carry on business.

The receivers are also in a position to appoint themselves as signatories to all bank accounts of the corporate defendants, who will need prior consent to any transaction over $5,000.

The restraints against the defendants from leaving the country were also continued and each has been ordered to handover their passports.

Asset-freezing orders against Bowesco are continuing, as is ASIC’s investigation, and court proceedings have been adjourned until October 3, 2006, with defendants being ordered to pay ASIC’s costs.