High Court Paves Way for Karuturi Liquidation

The liquidation of Karuturi Flower farm will continue after the case challenging the appointment of the joint liquidators Thoithi Muniu and Kuria Muchiru, was thrown out by the High Court.

In his ruling, the High Court Judge Justice Fred Ochieng noted that the appointment of the receiver managers and their seconded as the interim liquidators fell within the ambit of Section 734 (2) of the Insolvency Act.

“Despite the repeal of the Companies Act or Part VI of IX of the Act, those Parts and any other provisions of that Act necessary for their operation, continue to apply, to the exclusion of this Act, to any past event and to any step or proceeding, following or relating to that past event even if it is a step or proceeding that is taken after the commencement,” the ruling reads in part.

The High Court appointed Thoithi Muniu and Kuria Muchiru as joint liquidators on 6 April 2016  () to help safeguard the assets of the Company, following the winding up order of 30th March to avert a possible crisis and loss given the perishable and sensitive nature of the flower crop.

Karuturi receivership and liquidation has been dogged by litigation instigated by the directors that has hampered recovery efforts by the creditors who are owed significant sums of money.

On May 11, 2016, an application was filed in the High Court in which lawyers representing Karuturi’s directors questioned the qualifications of the two liquidators.

Read: CfC Stanbic Bank, Receivers meet Karuturi employees over terminal dues

In a certificate of urgency, lawyer Samora Owino of Kimani Michuki Advocates had argued that under Insolvency Act of 2015, the two officials were not qualified to handle the liquidation.

The ruling now validates the appointment of the two as Joint Liquidators and paves ways for the liquidation process to proceed.

“The Injunction stopping the meeting convened by the Joint Liquidators on grounds that they were not properly appointed was set aside,” said Muniu Thoithi when contacted about this development.

Pursuant to the Court Order, the joint liquidators have now convened a creditors’ meeting for Thursday July 21, 2016 for purposes of appointing a new liquidator in a notice published in The Daily Nation and The Standard Newspaper on 14 July 2016. It is hoped that the process of finding a new investor will now progress.