Law  

Company sued over alleged insolvency


A local Oil & Gas service company,  Unitech Drilling has filed a suit against Walter Smith Petroman Oil Limited before a Federal High Court, Lagos over alleged insolvency.

The claimant in the suit before Justice Oluremi Oguntoyinbo is seeking court order to wind up the business operations of the defendant over alleged insolvency.

The matter, which was fixed for May 10, 2019 could not go on because the court did not sit, while parties were told that new date would be communicated to them.

The plaintiff in the suit claimed that Walter Smith engaged its services for the provision of directional drilling and measurement between 2015 and 2016.

“A total of four oil wells were drilled at Izombe field in Imo State, with the last well delivered to Walter Smith in March, 2016. Despite the steady sale of crude oil produced from those wells, Walter Smith blatantly refused to pay its local contractors including Unitech.

“Whenever they chose to pay, a paltry sum out of the total invoice value, it would be dished out to the contractors. The dole-out would be repeated about four to five months after the last payment, thereby jeopardizing any financial plan that the contractor had put in place,” it says.

The plaintiff averred that it is indebted to its bankers, who financed the acquisition of relevant tools deployed to execute the contract for Walter Smith.

“Unitech is indebted to its sub-contractors, who provided associated services during the contract in 2017. Unitech approached Walter Smith and sought their consideration/approval of an accelerated settlement of their contract bills, in view of the mounting pressure from their bankers and at the end of the meeting, Walter Smith presented a payment plan, proposing to spread the remittance between August, 2017 to June, 2018,” it claimed.

The plaintiff further alleged that Walter Smith had not kept to any of the payment milestones and no reason had been given for defaulting on their payment plan.

“Based on that payment plan, Unitech in turn made commitment to its creditors and when Walter Smith defaulted, it inflicted a serious dent on the company’s credibility. It continued to dole out piece-meal payments whenever it pleased them despite written several letters to Walter Smith on this default but received no positive response,” the plaintiff claimed.

It is therefore praying for an order of the court to wind down the operations of Walter Smith, as they, by their inconsistencies have shown clear signs of insolvency.

In his defence, Walter Smith is challenging the competence and jurisdiction of the court.

It noted that it had paid part of the debt and have been paying periodically, therefore they are solvent.

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