Drip Footwear, the acclaimed sneaker brand established by Lekau Sehoana, is on the brink of liquidation due to an outstanding debt exceeding R20 million owed to WideOpen Platform. This advertising agency rendered services to the brand.
According to legal documents filed by WideOpen Platform in the High Court in Johannesburg, Drip Footwear is deemed insolvent, lacking the capacity to settle its financial obligations. WideOpen Platform is now seeking a court order to initiate the winding-up process under the Companies Act.
Personal Liability at Stake
The filed papers indicate that WideOpen Platform is considering legal action against Sehoana, Drip Footwear’s founder, who guaranteed the debt through a surety agreement.
Tomer Cohen, the managing director of WideOpen Platform, stated in an affidavit that the debt accumulation stemmed from advertising agreements between the two entities. Drip Footwear is reported to owe WideOpen Platform a staggering R20,442,285.06 with interest calculated from June 1, 2023, to the present.
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Cohen asserted that Sehoana acknowledged the debt by signing an acknowledgement of debt (AD) but subsequently failed to adhere to the agreed-upon payment schedule. The original plan was to repay the debt in instalments, starting from June 30 of the previous year and concluding on April 30 of the current year.
Regrettably, Drip Footwear and Sehoana breached the AD when they defaulted on the payment schedule, prompting legal action from WideOpen Platform.
Legal Measures Taken
Cohen engaged legal representation and sent a formal letter on November 1, 2023, demanding the payment of outstanding amounts within 21 days, as per Section 345[1][a] of the Companies Act. However, Drip Footwear and Sehoana failed to comply with the demand.
Despite a subsequent letter from SVN Attorneys, legal representatives of Drip and Sehoana, claiming factual solvency, Cohen emphasized that solvency alone is not sufficient grounds to withhold a winding-up order. With no further communication from Drip and Sehoana or their attorneys, Cohen asserts that the respondent is deemed unable to pay its debts, justifying the pursuit of a winding-up order.
Separate Lawsuit Against Sehoana
Cohen revealed plans to file a separate suit against Sehoana, emphasizing that no evidence supports the realizable nature of the security provided for the deals. Despite demands, Sehoana has not made any attempts to settle the debt with the WideOpen Platform.