The Sunday Mail
CAPS UNITED moved closer to liquidation following the rebuttal of Twine Phiri’s payment plan offer to the disgruntled duo of Lewis Uriri and Nhamo Tutisani on Friday.
Uriri and Tutisani, who are former directors of the cub, last month issued Makepekepe with a three-week notice to approach the High Court seeking liquidation over failure to pay off debts.
The three week notice lapses on Thursday hence Phiri’s desperate, but so far futile attempts to strike a peace accord with the disgruntled duo who are owed a combined $143 000.
Phiri’s co-director Farai Jere tops the list of creditors as he is owed close to $2 million.
In their application, dated April 7, 2015, Uriri and Tutisani argued that Caps United is insolvent and that provisional liquidation was the best option under the circumstances.
“We demand with the provisions of Section 205 (a) of the Companies Act in mind, the payment of the above said sums ($143 000 for the duo) within three weeks of the receipt of this letter, failing which our clients shall forthwith petition the High Court for the liquidation of CAPS United Football Club with a view that its sole asset, CAPS United Football Club (including the PSL franchise) be sold to satisfy the debts,” reads part of the letter.
Section 205 (a) of the Companies Act reads: “A company shall be deemed to be unable to pay its debts-
a) If a creditor, by cession or otherwise, to whom the company is indebted in a sum exceeding US$100 then due, has served on the company a demand requiring it to pay the sum so due by leaving the demand at its registered office and if the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor . . .”
On the 24th of last month, Phiri’s lawyers Ziumbe & Partners wrote to Uriri and Tutisani’s legal representatives, Wilmot & Bennet, expressing their client’s reservations about the duo’s conduct.
Phiri, through his lawyers, argued that the duo placed themselves in “a position in which there is conflict of interest between their duties to the club and their personal interests.”
“It is a rule of universal application that a director should not enter into engagements in which he or she can have a personal interest of those he is bound to protect.
“In the circumstances your clients were bound together with other directors to put into place a plan by which the club should have repaid the loans. They did not or failed to do so.
“It is not proper that after having failed to execute the plan, your clients should turn around and sue our client for a debt for which they were partly responsible, more so in light of the absence of any strict terms of repayment as is the case,” reads part of the letter from Phiri’s lawyers.
However, and more crucially, Phiri acknowledged the debt and proposed to repay the money by channelling all proceeds from the envisaged sell of players to servicing the debts.
“It (Caps United) proposes that all moneys realised from these sales shall be remitted to your clients in part settlement of the debt owed.
“In the meanwhile our client is willing to pay 20 percent of the net gains in respect of all gate takings for every home match to your clients commencing from the acceptance of the payment plan.
“Our client is also willing to pay 20 percent of the net of any prize money to your clients,” further reads the offer.
Uriri and Tutisani said no on Friday.
They claimed that Phiri has already ceded his rights to the transfer of players to Norbert Chawira, another creditor.
“In the first instance, assuming the certainty of the sale of players abroad, your client has no rights in respect thereof. “On 29 August 2013, your client ceded all rights to transfer earnings to Norbet Chawira as per attached Letter of Guarantee in respect of a $100 000 loan.
“Your client has not settled the debt. Norbert Chawira has, in the course of the last week, issued summons based on the said cession of rights. It is therefore not open to your client to purport to offer to ours rights your client very well knows it has ceded to a third party, and is being sued thereon,” wrote Blessing Diza of Wilmot and Bennett Legal Practitioners.
Uriri and Tutisani also questioned the offer to have 20 percent of gate takings being channelled towards servicing the debt.
“It is important to note that most home matches for CAPS United were and continue to be near loss matches, with the club barely breaking even. Our clients have in their possession reconciliation for most of the home matches last season to illustrate this point.
“There can be no doubt therefore that your client is clearly unable to pay its debts. It is insolvent. It cannot be resurrected. Liquidation is the sole remaining option. Consequently, unless the amounts outstanding are paid by the 7th May 2015, our clients will on the 8th May 2015, petition the High Court for your client’s provision liquidation,” the duo argued through their lawyers.
Uriri and Tutisani also took issue with Phiri’s “insult.”
“We must of necessity address the mischievous insult upon our clients and attempt to evade liability by shifting the blame to the board. In doing so we must register our clients’ extreme disappointment by this insult and failure to address the real issues at hand.
“Your client dishonestly suggests that there was no agreed time frame or mode of payment. There exists a board resolution to the effect that the loans would be serviced from the proceeds of home matches. Secondly, assumed for a moment that your client genuinely has amnesia, the moment we made a reasonable demand on behalf of our clients, yours was in mora (default). The amounts are therefore due.”
