Kleenmaid creditors vote for liquidationDOWNLOAD
The creditors of the 14 companies of the Kleenmaid Group have today voted to liquidate the companies.
Approximately 80 creditors attended the meeting held by the Voluntary Administrators, John Greig, David Lombe and Richard Hughes in Brisbane this morning. Amongst those choosing to attend were two of the three Kleenmaid Group Directors, Andrew and Brad Young.
Both directors chose not to address creditors questions directly at the meeting.
Voluntary Administrator John Greig again confirmed that the Group has over $102m in liabilities, that he believes that there have been significant breaches of Directors duties, and that there is very little chance of a dividend to unsecured creditors.
Mr Greig expressed concern and understanding about the plight of the 4,500 creditors that have been affected by the business. “Creditors have today expressed their disbelief about the likely date of insolvent trading being as early as 2007, a number of consumer creditors have been hurt by this collapse and unfortunately, it appears their position will be that there is not enough stock or assets to satisfy their claims” he said.
The Voluntary Administrators answered questions from the floor about removal of documents from the Kleenmaid offices by the Directors on Friday, the sale of stock, the role of the auditors, Directors liabilities, the potential for court action and the options that might be available to employees in liquidation.
Mr Greig said that the next step will be for the liquidators will be to sell the realisable assets and to discuss further funding options available through the ASIC.
Mr Greig said that the appointment of a liquidator will provide employees with the right to apply for compensation through General Employee Entitlements Redundancy Scheme. Mr Greig confirmed that franchisees are in a difficult position. “They have essentially lost their investment,” he said.
Mr Greig acknowledged that one of the challenges of the investigations to date have been the significant intermingling of the transactions of the companies.
When asked if the global financial crisis had been the major contributor to the challenges faced by the Group, Mr Greig said, “The financial crisis has affected in many businesses, but the liquidators believe that the Group had been insolvent before the global financial crisis.”
With regard to the existing financial documents currently held by the liquidators, Mr Greig said, “On our appointment as Voluntary Administrators, Deloitte Forensic immediately captured an image of the Kleenmaid Group IT system.”
Mr Greig confirmed that of 30 boxes taken by the Directors on Friday, 20 were with the authority of the Voluntary Administrators as they were unrelated to the Kleenmaid Group companies, however the contents of 10 boxes remains unknown.
During the meeting, ‘Commitees of Inspection’ were appointed to assist the liquidators.
A full copy of the report to creditors can be downloaded here.
A copy of the most recent Q&A media release (providing comment on the date of insolvent trading, the outcome for employees, the potential sale of EDIS Service Logistics, stock held, the current creditor position, the recommendation for liquidation and the administration time) can be read here.
A copy of the media release regarding the incident on Friday can be read here.
NB: For further general information on the voluntary administration process, please refer to: Australian Securities and Investments Commission website.