Troubled Uchumi Supermarkets is banking on court protection to fend off multiple creditors who are scrambling to dispose of its assets to recover debts.
The retail chain on Tuesday got big relief after it obtained court orders suspending all judgments, decrees, attachment of properties, or distress for rent against it until October 17 when Kiambu-based milk processor Githunguri Dairy Farmers Co-operative Society’s case will be mentioned.
Githunguri Dairy moved to court last month seeking to wind up Uchumi over its failure to settle a Sh44.8 million debt, but the case has turned out to be a godsend for the retail chain whose response has resulted in the suspension orders.
Uchumi has, in a petition filed in court, disclosed that it is fighting a record 45 legal suits before Magistrate’s courts, the High Court and Tribunals — all arising from its inability to pay debts.
“The company, its assets and stock are in desperate need of protection by this honourable court and unless there is immediate intervention, the company’s assets or stock will be disposed of to the detriment of the company as a going concern and the general body of creditors,” Judith Matata, Uchumi’s legal manager, told the court.
Justice Mary Kasango, while issuing orders preserving the assets of Uchumi, also allowed the retail chain to inform the public of decision to preserve its assets in a daily newspaper of national circulation. Uchumi also promised to serve the papers and the orders on 63 companies, including 11 auctioneers.
Court documents show that UBA Bank has asked Valley Auctioneers to seize and dispose of Uchumi land situated on Langata Road to settle a Sh172 million debt.
UBA opposed granting of the orders stopping it from disposing of the land, arguing that its debt is secured and the process of selling the property had commenced.
UBA Bank on September 24 issued a 45-day notice for sale of the land identified as LR No 209/12593 in Langata area.
The list of creditors includes UAP Insurance, Tropikal Brands, Kings Wear Limited, African Cotton industries and Mumias Sugar Company.
[BUSINESS] Uchumi moves to block creditors: Uchumi has, in a petition filed in court, disclosed that it is fighting a record 45 legal suits . https://t.co/XOLYQ8GHXu
— Breaking News (@News_Kenya) October 4, 2018
[BUSINESS] Court shields Uchumi from landlord, bank: Uchumi has got temporary relief from sale of its Langata land by United Bank of Africa https://t.co/Neq3Pp5muo
— Breaking News (@News_Kenya) October 4, 2018