Home Australia Pty Ltd Ashford Homes Pty Ltd Nationwide Property Investments Pty Ltd Smart Road Property Rentals Pty Ltd (All In Liquidation)

Transcription

1 DRAFT Home Australia Pty Ltd Ashford Homes Pty Ltd Nationwide Property Investments Pty Ltd Smart Road Property Rentals Pty Ltd (All In Liquidation) Meetings of creditors 3 November 2016

2 Agenda Opening Meeting formalities Purpose of meetings Declaration of Independence, Relevant Relationships and Indemnities The role of the Liquidators Company overview Home Australia Group structure Background and causes of failure Customer summary Financial position Liquidation Liquidators key actions to date Sale process Strategy going forward Potential return to creditors Meeting resolutions Questions 2

3 Meeting formalities Open meeting Liquidator Chairperson: Corporations Regulation (1) Introductions Matthew Caddy (Liquidator) Matthew Whittle (Liquidators legal counsel) Quorum: Corporations Regulation (2) Attendance register Voting Time and place convenient: Corporations Regulation Proofs of debt and proxies Meetings will be recorded for the purposes of recording meeting minutes 3

4 Declaration of Independence, Relevant Relationships and Indemnities ( DIRRI ) DIRRI dated 27 October distributed with notice of meeting DIRRI is available for inspection We remain of the view that we are free of any conflict of interest 4

5 Purpose of meetings Meeting of creditors Convened under Section 497 of the Corporations Act: To confirm the appointment of Matthew Caddy and Barry Kogan as Liquidators or to appoint another person(s) as Liquidator in their place. To consider any matters arising out of the Liquidation. To approve the remuneration of the Liquidators. If thought fit, to appoint a Committee of Inspection. To consider the approval of the Liquidators powers to compromise certain debts of the Companies and to enter into agreements for terms of greater than three months. To authorise the destruction of the books and records of the Companies following the deregistration of the Companies, subject to the consent of the Australian Securities and Investments Commission being obtained. To discuss any other relevant business which may arise. 5

6 Meetings to be held concurrently 1. Home Australia Pty Ltd (In Liquidation) 2. Ashford Homes Pty Ltd (In Liquidation) 3. Nationwide Australian Investments Pty Ltd (In Liquidation) 4. Smart Road Property Rentals Pty Ltd (In Liquidation) Resolution: 1. That the meetings of creditors of each of the following Companies, being Home Australia Pty Ltd, Ashford Homes Pty Ltd, Nationwide Australian Investments Pty Ltd and Smart Road Property Rentals Pty Ltd (All In Liquidation) be held concurrently. 6

7 The role of the Liquidators Collect, protect and realise the Companies assets Hold a meeting of creditors Investigate and report to creditors about the Companies affairs Enquire into the failure of the company and possible offences by people involved with the Companies and report to ASIC Investigate and consider pursuing any statutory recovery actions available to the Liquidators Liaise with the Department of Employment regarding the Fair Entitlements Guarantee scheme available to employees Distribute any proceeds of realisation after payment of the costs of the liquidation Apply for deregistration of the Companies on completion of the liquidation 7

8 Home Australia Group structure Home Australia Pty Ltd Ashford Homes Pty Ltd (VIC) Huxley Homes Pty Ltd (NSW) Newstart Homes (S.E. QLD) Pty Ltd (QLD) Homestead Homes Pty Ltd (SA) Collier Homes Pty Ltd (WA) Nationwide Australian Investments Pty Ltd Smart Road Property Rentals Pty Ltd Holding company Display homes company Bank Security Home building companies Dormant company 8

9 Background and causes of failure Background Home Australia registered as a company in August 1996 Acquired home building businesses in VIC, NSW, QLD and WA from 1996 onwards Sole director Robert Day Ashford Homes - 12 employees and 8 contractors Causes of failure Lack of director & management oversight Significant trading losses: FY15A EBITDA: > > Ashford Homes: ($0.4 million) Group: ($4.9 million) FY14A EBITDA: > Cash flow issues Group: ($2.2 million) Inability to source capital to recapitalise the Group (including via Goshen Capital Holdings Limited Australia Pty Ltd) Liquidators were appointed on 17 October

10 Customer summary Key customer stats: Home Australia Group - Customers at 17 October 2016 Ashford Homes Total Category Insurance? (VIC) Group Amounts paid, no signed contract No Deposit paid, signed contract No Deposit paid, signed contract Yes Under construction Yes Total customers Files relating to all customers with signed contracts are being copied and will be made available to customers Customers with a signed contract and no insurance have paid an estimated $100,000 in deposits 10

11 Financial position Ashford Homes Pty Ltd Summary Statement of Affairs as at 16 October 2016 Estimated Item Book value ($) to realise ($) Assets not specifically charged: Interest in land 98, ,000 Sundry debtors 141,801 74,094 Cash on hand 4, WIP 823,218 82,322 Office & display home furniture 221,462 10,832 Other assets 2,521,945 13,983 Total assets 3,811, ,550 Preferential creditors (employees) (48,930) (48,930) Secured creditor (11,439,139) (11,439,139) Available / (shortfall) to unsecured creditors (7,676,607) (11,201,519) Unsecured creditors (2,278,110) (2,278,110) Intercompany loans (7,324,663) (7,324,663) Contingent liabilities (351,034) (351,034) Overall shortfall to creditors (17,630,414) (21,155,326) Employee entitlements have priority over the secured creditor in respect of certain recoveries Collectability of debtors and WIP highly uncertain due to Ashford Homes breaching contracts Unless significant recoveries are realised from antecedent transactions, there is no prospect of a dividend to ordinary unsecured creditors 11

12 Financial position Home Australia Pty Ltd Summary Statement of Affairs as at 16 October 2016 Estimated Item Book value ($) to realise ($) Assets not specifically charged: Interest in land - - Sundry debtors - - Cash on hand 2 - WIP - - Office fit-outs and furniture 32,297 2,160 Other assets 34,033,241 15,000 Total assets 34,065,540 17,160 Preferential creditors (employees) - - Secured creditor (11,439,139) (11,439,139) Available / (shortfall) to unsecured creditors 22,626,401 (11,421,979) Unsecured creditors (7,631,056) (7,631,056) Intercompany loans (22,837,674) (22,837,674) Contingent liabilities (4,535,657) (904,880) Overall shortfall to creditors (12,377,987) (42,795,589) Unless significant recoveries are realised from antecedent transactions, there is no prospect of a dividend to ordinary unsecured creditors 12

13 Financial position Nationwide Australian Investments Pty Ltd Summary Statement of Affairs as at 16 October 2016 Estimated Item Book value ($) to realise ($) Assets not specifically charged: Interest in land - - Office fit-outs and furniture 13, Other assets 5,806,081 - Total assets not specifically charged 5,819, Assets specifically charged: Display home land 6,124,648 4,287,254 Display home debt (6,289,732) (6,289,732) Total assets specifically charged - - Total assets 5,819, Preferential creditors (employees) - - Secured creditors (11,439,139) (11,439,139) Shortfall to unsecured creditors (5,619,634) (11,438,468) Unsecured creditors (88,303) (88,303) Partly secured creditors (165,084) (2,002,479) Intercompany loans (6,513,073) (6,513,073) Overall shortfall to creditors (12,386,095) (20,042,323) Unless significant recoveries are realised from antecedent transactions, there is no prospect of a dividend to ordinary unsecured creditors 13

14 Liquidators key actions to date Business had insufficient funds to continue to trade. The Liquidators have therefore: Ceased all construction Terminated employment of all employees (and liaised with FEG regarding unpaid entitlements) Liaised with home indemnity insurers Commenced a sale campaign for the assets Closed all offices, secured books and records and the Companies fixed assets Communicated with employees, customers and creditors Provided ongoing responses to specific queries from customers and creditors 14

15 Sale process Home Australia A sale campaign was initiated for all or part of the assets of the business Advertisements were placed in AFR and The Australian on Wednesday 19 October interested parties received the sales process information regarding the Group. A further 43 interested parties received sale process information regarding specific the Group companies below: 4 for Ashford Homes Pty Ltd (In Liquidation) 5 for Huxley Homes Pty Ltd (In Liquidation) 5 for Newstart Homes (SE QLD) Pty Ltd (In Liquidation) 10 for Homestead Homes Pty Ltd (In Liquidation) 19 for Collier Homes Pty Ltd (In Liquidation) 15

16 Sale process Ashford Homes Pty Ltd 4 interested parties received the sales process information Assets for sale include: brand names; other intellectual property; and customer pipeline. Potential whole of business transaction has not eventuated 16

17 Sale process Nationwide Australian Investments Pty Ltd A sale campaign for Nationwide Australian Investments display homes had commenced prior to the Liquidators appointment The Liquidators included the display homes in the sales process run for the business assets Advertisements were placed in AFR and The Australian on Wednesday 19 October offers were received for owned display homes across VIC, QLD, SA and WA Some offers were for the display homes only, some were all in one offers coupled with the respective state based business assets The Liquidators will commence a separate sales process in due course for the owned display homes not sold as part of the business sales process 17

18 Strategy going forward Complete sale process / asset realisations Complete process of copying files and providing to customers Conduct investigations into the company regarding possible: insolvent trading; breaches of directors duties; unfair preferences; and uncommercial transactions. Report to creditors and ASIC 18

19 Potential return to creditors The order in which different classes of creditors are paid is determined by the Corporations Act and the nature of funds recovered We do not anticipate there will be a return to ordinary unsecured creditors Employees need to liaise with FEG for payment of their entitlements The Liquidators are assisting FEG with information requirements 19

20 Resolutions Ashford Homes Pty Ltd 1. That the appointment of Matthew Wayne Caddy and Barry Frederic Kogan as Liquidators of Ashford Homes Pty Ltd be confirmed by creditors. 2. That the remuneration of the Liquidators, their partners and staff, for Ashford Homes Pty Ltd (In Liquidation), for the period from 17 October 2016 to 24 October 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $38, (exclusive of GST), is hereby approved for payment. 3. That the prospective remuneration of the Liquidators for Ashford Homes Pty Ltd (In Liquidation), to the maximum amount of $100, (excluding GST), is hereby approved for payment (calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors). 20

21 Resolutions Ashford Homes Pty Ltd (continued) 4. That so far as is necessary for the beneficial winding up of Ashford Homes Pty Ltd, the Liquidators are hereby authorised pursuant to subsections 506(1A) and 477(2A) of the Corporations Act 2001 to compromise any debt to the Company greater than the prescribed amount. 5. That so far as is necessary for the beneficial winding up of Ashford Homes Pty Ltd, the Liquidators are hereby authorised pursuant to subsections 506(1A) and 477(2B) of the Corporations Act 2001 to enter any agreement on the Company s behalf involving a term or obligations extending for more than three months. 6. That the books and records of Ashford Homes Pty Ltd (In Liquidation) may be destroyed within six months following the deregistration of the Company, subject to the consent of the Australian Securities & Investments Commission being obtained. 21

22 Resolutions Home Australia Pty Ltd 1. That the appointment of Matthew Wayne Caddy and Barry Frederic Kogan as Liquidators of Home Australia Pty Ltd be confirmed by creditors. 2. That the remuneration of the Liquidators, their partners and staff, for Home Australia Pty Ltd (In Liquidation), for the period from 17 October 2016 to 24 October 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $5, (exclusive of GST), is hereby approved for payment. 3. That the prospective remuneration of the Liquidators for Home Australia Pty Ltd (In Liquidation), to the maximum amount of $50, (excluding GST), is hereby approved for payment (calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors). 22

23 Resolutions - Home Australia Pty Ltd (continued) 4. That so far as is necessary for the beneficial winding up of Home Australia Pty Ltd, the Liquidators are hereby authorised pursuant to subsections 506(1A) and 477(2A) of the Corporations Act 2001 to compromise any debt to the Company greater than the prescribed amount. 5. That so far as is necessary for the beneficial winding up of Home Australia Pty Ltd, the Liquidators are hereby authorised pursuant to subsections 506(1A) and 477(2B) of the Corporations Act 2001 to enter any agreement on the Company s behalf involving a term or obligations extending for more than three months. 6. That the books and records of Home Australia Pty Ltd (In Liquidation) may be destroyed within six months following the deregistration of the Company, subject to the consent of the Australian Securities & Investments Commission being obtained. 23

24 Resolutions Nationwide Australian Investments Pty Ltd 1. That the appointment of Matthew Wayne Caddy and Barry Frederic Kogan as Liquidators of Nationwide Australian Investments Pty Ltd be confirmed by creditors. 2. That the remuneration of the Liquidators, their partners and staff, for Nationwide Australian Investments Pty Ltd (In Liquidation), for the period from 17 October 2016 to 24 October 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $8, (exclusive of GST), is hereby approved for payment. 3. That the prospective remuneration of the Liquidators for Nationwide Australian Investments Pty Ltd (In Liquidation), to the maximum amount of $100, (excluding GST), is hereby approved for payment (calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors). 24

25 Resolutions - Nationwide Australian Investments Pty Ltd 4. That so far as is necessary for the beneficial winding up of Nationwide Australian Investments Pty Ltd, the Liquidators are hereby authorised pursuant to subsections 506(1A) and 477(2A) of the Corporations Act 2001 to compromise any debt to the Company greater than the prescribed amount. 5. That so far as is necessary for the beneficial winding up of Nationwide Australian Investments Pty Ltd, the Liquidators are hereby authorised pursuant to subsections 506(1A) and 477(2B) of the Corporations Act 2001 to enter any agreement on the Company s behalf involving a term or obligations extending for more than three months. 6. That the books and records of Nationwide Australian Investments Pty Ltd (In Liquidation) may be destroyed within six months following the deregistration of the Company, subject to the consent of the Australian Securities & Investments Commission being obtained. 25

26 Resolutions Smart Road Property Rentals Pty Ltd 1. That the appointment of Matthew Wayne Caddy and Barry Frederic Kogan as Liquidators of Smart Road Property Rentals Pty Ltd be confirmed by creditors. 2. That the remuneration of the Liquidators, their partners and staff, for Smart Road Property Rentals Pty Ltd (In Liquidation), for the period from 17 October 2016 to 24 October 2016, calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors, in the amount of $1, (exclusive of GST), is hereby approved for payment. 3. That the prospective remuneration of the Liquidators for Smart Road Property Rentals Pty Ltd (In Liquidation), to the maximum amount of $10, (excluding GST), is hereby approved for payment (calculated on hours spent at the rates detailed in the Schedule of Remuneration Methods and Hourly Rates provided to creditors). 26

27 Resolutions - Smart Road Property Rentals Pty Ltd (continued) 4. That so far as is necessary for the beneficial winding up of Smart Road Property Rentals Pty Ltd, the Liquidators are hereby authorised pursuant to subsections 506(1A) and 477(2A) of the Corporations Act 2001 to compromise any debt to the Company greater than the prescribed amount. 5. That so far as is necessary for the beneficial winding up of Smart Road Property Rentals Pty Ltd, the Liquidators are hereby authorised pursuant to subsections 506(1A) and 477(2B) of the Corporations Act 2001 to enter any agreement on the Company s behalf involving a term or obligations extending for more than three months. 6. That the books and records of Smart Road Property Rentals Pty Ltd (In Liquidation) may be destroyed within six months following the deregistration of the Company, subject to the consent of the Australian Securities & Investments Commission being obtained. 27

28 Committees of Inspection Role of a Committee of Inspection: consult with the Liquidators about matters relating to the administration; receive and consider reports by the Liquidators; and approve the Liquidators remuneration A Committee of Inspection cannot instruct the Liquidators 28

29 Committee of Inspection Ashford Homes Suggested committee for Ashford Homes Pty Ltd is as follows: National Australia Bank Limited (secured creditor) VMIA (VIC Domestic Building Insurer) Unsecured creditors x 2 Homebuyer x 1 Resolution for Ashford Homes Pty Ltd is as follows: That a Committee of Inspection be formed for Ashford Homes Pty Ltd, and: 1. representing 2. representing 3. representing 4. representing 5. representing be appointed to the Committee of Inspection 29

30 Committee of Inspection Home Australia Pty Ltd Suggested committee for Home Australia Pty Ltd is as follows: National Australia Bank Limited (secured creditor) Unsecured creditors Resolution for Home Australia Pty Ltd is as follows: That a Committee of Inspection be formed for Home Australia Pty Ltd, and: 1. representing 2. representing 3. representing 4. representing 5. representing be appointed to the Committee of Inspection 30

31 Committee of Inspection Nationwide Australian Inv. Pty Ltd Suggested committee for Nationwide Australian Investments Pty Ltd is as follows: National Australia Bank Limited (secured creditor) Unsecured creditors Resolution for Nationwide Australian Investments Pty Ltd is as follows: That a Committee of Inspection be formed for Nationwide Australian Investments Pty Ltd, and: 1. representing 2. representing 3. representing 4. representing 5. representing be appointed to the Committee of Inspection 31

32 Committee of Inspection Smart Road Property Rentals Pty Ltd Suggested committee for Smart Road Property Rentals Pty Ltd is as follows: National Australia Bank Limited (secured creditor) Resolution for Home Australia Pty Ltd is as follows: That a Committee of Inspection be formed for Smart Road Property Rentals Pty Ltd, and: 1. representing 2. representing 3. representing 4. representing 5. representing be appointed to the Committee of Inspection 32

33 Q & A

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