Restructuring, Turnaround and Insolvency Specialists

Creditors’ Voluntary Liquidation

Case Study 1 – Multi State wind down

Prior to liquidation the company had operations in Victoria and also regional (Newcastle) New South Wales.  Its financial operations were conducted in Victoria and its manufacturing was conducted in New South Wales.  Due to this we were dealing with employees and creditors from both states.  Apart from book debts the major asset of the company was its plant and equipment at its manufacturing site in Newcastle.  Upon appointment we immediately secured the plant and equipment.  Due to our knowledge of the industry we were able to work with a National firm of valuers and auctioneers who were able to co-ordinate the changing of locks and taking an inventory of the assets located in New South Wales and Victoria.

We also met with the management team from Newcastle and ascertained the general manager (who was not a director or shareholder) was responsible and trustworthy and we retained his services to facilitate the sale of the assets.

Initially it was thought that the assets would be sold by way of public auction and the premises vacated, however after advertising the business for sale as a whole we entered into negotiations and were able to successfully sell the business and its assets for considerably higher than auction realisation value. Whilst some employees were successful in obtaining employment with the purchaser the majority were not. However the sale price achieved will enable the claims of the employees, many of whom were longstanding employees with significant entitlements to receive the bulk of the monies outstanding including paying their superannuation entitlements in full.  The employee entitlements including superannuation amount to approximately $350,000.

Prior to settling the sale negotiations we had to deal with various issues including retention of title claims on various assets, resolve a dispute in relation to the ownership of intellectual property and have all the plant and equipment inspected so as to comply with the relevant occupational health and safety requirements.  In order to avoid long and costly litigation we settled with the various parties claiming retention of title and ownership of intellectual property on a commercial basis which allowed the sale to proceed, the monies collected and the small amount required to be paid to the various parties to settle the disputes was considerably less than if we had have litigated the matter when taking into consideration the costs of litigation, the delay caused and the fact that we would have lost the opportunity to sell the assets for a higher price than auction.

 

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