Dear neighbours, it's time to wind up the UCOL company.
This email is about bringing the development to a finish and repaying
the surplus funds to the shareholders as we previously agreed.
Including money that is due to be paid to me as a shareholder, which I
could do with sooner rather than later.
I and 8 others started the company in 2013 to buy the land, and develop
a cohousing development on the land. That has now been done
successfully, albeit it took a little longer than we initially planned.
We signed the UCOL agreement on the 3rd of July 2018, and the task was
complete once we received our code compliance certificate, which
happened (IIRC) on 31st May, 2021.
The only task remaining for the company is to settle any outstanding
bills and any unfinished work in relation to the construction of the
units. The bulk of the outstanding work was minuted on the 3rd of June
(https://minutes.king.net.nz/2021/ucol-minutes-2021-06-03/):
*Minute: This meeting asks the Directors to write to all purchasers to
state that UCOL undertakes to finish the site works, which remain
unfinished on settlement day, at the earliest opportunity and in any
case within 6 months of settlement. Specifically, we agree to finish*
*
*The fences between units in the back yards and on the boundary
between private and shared areas around the common green as shown on
the plans.*
*
*Pergolas in the back yards of A and H units as shown on the plans.*
*
*The earthworks outside M3 as that was priced by Halls recently.*
*
*A pergola in similar construction and size as the A and H unit ones
outside M1 and M3*
*
*The boundary fence between M3 and Montpellier Street.*
*
*The High Street steps outside C1/C2*
(I note we settled in June, so 6 months from settlement will be in
December.)
The work on the houses and most of the common house were done by the
contractor, which is why the bulk of the outstanding work was
landscaping. The three items not mentioned in the minute were the
commonhouse kitchen, bike shed and the heritage fence.
Of the outstanding work:
* The fences between units are complete.
* The Pergolas for A and H units are complete.
* The works and fencing outside the M units (Gay, Sara and Roz and
Mike's units) are progressing slowly or stalled (we decided not to
have pergolas there).
* The C1/C2 steps have a temporary solution, and the final solution is
stalled on the heritage fence work.
* The commonhouse kitchen is progressing well and on track to be
finished by November.
* The Bike shed is progressing slowly
* The heritage fence is stalled because of contractor delays.
There are costs to keeping the company running. We just paid a a
$3000+GST bill for company insurance, for example. We pay $750 per
month in accounting fees. Winding up the company will allow us to stop
incurring these costs. But the main reason I want to do this is to
bring this initial development phase to a timely close.
I propose we set November 30th as the last day for completion of
remaining work. We can then settle final bills in December, and wind up
the company by the end of the year.
Once the company is would up, the bulk of our profit of about $200,000
would be distributed as we agreed in sections 20 and 22 of the UCOL
agreement. In short, it will be paid to shareholders pro-rata as
interest payments on the loans to the company. We agreed repayment
would be on the basis of lending to the company rather than
shareholdings because loans by shareholders was the principal source of
funding and risk aside from the development loan.
As we have talked about, this doesn't include any payments to outside
lenders who lent us money but aren't shareholders. I'm happy personally
if these external lenders are paid out interest on the same basis as
shareholders. Which would require the agreement of everyone.
When I committed to this cohousing project in 2013, I invested all my
assets in the project at no interest. I'm really happy with the
resulting development which we are all enjoying. I'm happy that we
agreed in 2018 that any surplus funds would be repaid to shareholders in
recognition of the loans shareholders made. However I draw the line at
continuing to fund further developments at Toiora out of that money.
That money does not belong to Toiora.
It's time now to close the company and repay the shareholders.
Once the shareholders have been repaid, I'm sure the body corporate
would welcome shareholders to re-donate those back to the development
fund, if they choose to.
Thanks,
Alex
