Home-Fix founder and brother face bankruptcy petitions

Singapore

BELEAGUERED hardware firm Home-Fix DIY founder Low Cheong Kee and his younger brother are facing bankruptcy applications from Nippon Paint (Singapore) Company over judgement debt of about half a million dollars.

The paint manufacturer filed bankruptcy petitions against Mr Low and his brother Low Cheong Yew last December and January this year respectively over judgement debt of about S$570,000 including interest.

The bankruptcy hearing is slated for May 21.

The elder Mr Low had given personal guarantee to Nippon Paint for stocks supplied to Home-Fix. However, when the account payables amounting to more than S$550,000 were overdue, neither Home-Fix nor its 55-year-old founder made payment.

This prompted the paint manufacturer to sue Mr Low and the company last July. It obtained default judgment against the two defendants a month later when no defence was filed.

After judgement was obtained, the younger brother - also a Home-Fix director - stepped forward to provide Nippon Paint his personal guarantee for the sum.

However, he too, did not honour his promise to pay. Consequently, he was likewise sued by Nippon Paint, which also obtained default judgement against the younger brother.

Having sent the Low brothers statutory demand for payment of the judgement debt but not receiving payment after the 21-day deadline, Nippon Paint, through lawyer Nigel Hoe, initiated the bankruptcy proceedings.

Mr Hoe told The Business Times that the brothers are jointly and severally liable for the unsecured judgement debt of approximately half a million dollars.

The Low brothers have appointed lawyers Suresh Nair and Joel Yeow to act for them in the bankruptcy proceedings. Mr Yeow said the brothers are trying to avoid bankruptcy so that they can continue running Home-Fix after the company gets out of judicial management.

A way to stave off bankruptcy, BT understands, is a voluntary arrangement. This is a negotiated debt settlement in which creditors agree to the debtor's proposal on how he intends to settle his debts with various creditors.

Besides Nippon Paint, there are other creditors with whom the Low brothers have furnished personal guarantees, BT understands.

Nippon Paint's bankruptcy proceedings have no impact on Home-Fix, which was placed under judicial management in January in a bid to restructure itself with S$19.8 million liabilities in its books.

An independent judicial manager is managing Home-Fix's affairs, business and property during this six-month period.

Should the Low brothers become bankrupts, they would be disqualified to be directors at any company.