Companies

Tuskys creditors stopped from selling assets

tuskys

Employees of Tuskys branches in Kisii protest termination of their contracts and three months' unpaid salary on September 30, 2020. PHOTO | RUTH MBULA | NMG

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Summary

  • A High Court judge has temporarily stopped the sale of Tuskys assets by its creditors to pay mounting rent arrears, offering a sigh of relief to the struggling retailer.
  • Justice Francis Tuiyott in a ruling delivered Wednesday temporarily froze the planned auction of the company’s property by creditors pending directions to be issued on October 27.
  • Tuskys' landlords in recent weeks have been slamming the auctioneers’ hammer on the supermarket’s stocks to recover rent arrears.

A High Court judge has temporarily stopped the sale of Tuskys assets by its creditors to pay mounting rent arrears, offering a sigh of relief to the struggling retailer.

Justice Francis Tuiyott in a ruling delivered Wednesday temporarily froze the planned auction of the company’s property by creditors pending directions to be issued on October 27.

Tuskys' landlords in recent weeks have been slamming the auctioneers’ hammer on the supermarket’s stocks to recover rent arrears.

Tuskys has been locked out of its premises such as Juja City Mall and at the Oasis Mall in Malindi in spite of court orders restraining the evictions.

The new directives will however stop the planned auctions at the retailers’ outlets at Komarock Mall, Tuskys Embakasi and North Airport Road which were scheduled for this week.

“Having read the affidavit of Patrick Ogola sworn on 16th October 2020, I hereby order a stay of any attachment, sequestration, distress or execution against the property of the company pending directions that are to be issued on October 27,” said Justice Tuiyott.

“However, this order does not affect Greenspan Limited.”

The ruling that comes as a temporary relief to the struggling retailer that owes suppliers close to Sh6 billion comes barely a few weeks after the retailer sworn an affidavit in court, seeking the protection of the supermarkets assets from unlawful distress.

In its court filing presented by High Court Advocate Patrick Onyango Ogola, Tuskys stated that sporadic auctions have no legal basis as the retailer is the subject of an ongoing liquidation petition by the Hot Point Appliances Limited.

Hotpoint wants Tuskys liquidated over a Sh248 million debt.

Tuskys also argues that if the planned auctions are effected, it will suffer irreparable losses which would dampen efforts to turnaround its fortunes and settle debt owed to suppliers.

“That it is in the best interest of the applicant and creditors on record that the ongoing efforts towards the refinancing of the applicant are allowed room to proceed without the threats and distractions of liquidation, distress or execution,” says Tuskys in court documents.