OSK Developments Pty Ltd (In Liquidation) ACN (the Company)

Transcription

1 OSK Developments Pty Ltd (In Liquidation) ACN (the Company) Liquidator s Statutory Report to Creditors Thursday, 21 June 2018 Michael Gerard McCann Liquidator T (07) E michael.mccann@au.gt.com

2 Introduction I refer to my initial correspondence to creditors dated 16 April 2018 in which I advised you of my appointment as liquidator and your rights as a creditor in the liquidation. The purpose of this report is to: Provide you with an update on the progress of the liquidation. Advise you of the likelihood of a dividend being paid in the liquidation. At this time, I am not requesting creditors to consider or approve my remuneration. I am required to obtain approval of the Court to discharge remuneration for my time incurred in relation to the provisional liquidation period and in this regard, I will be submitting an application to the Court in the coming weeks. I have relied on information provided from numerous sources to prepare the report, including: Discussions with the Director of the Company, Mr Liam Young. Information available from public sources, such as, Australian Securities and Investments. Commission (ASIC) and the Personal Property Securities Register (PPSR). A review of the Company's books and records provided to date. Discussions with former employees and creditors of the Companies. Company Background The Company was incorporated on 14 February 2017 with its primary office location being at Suite 38, Level 4/194 Varsity Parade, Varsity Lakes QLD The Company was part of a group of companies known as the Benchmark Group. A copy of the group structure is attached at Appendix A. I am appointed liquidator of all companies within the Benchmark Group. The Company undertook project marketing services for property developers and collected commissions from developers from the sale of real estate. The Company did not appear to employ any staff and all staff which undertook work for the Company were employed through a related entity, Benchmark Private Wealth Pty Ltd. The Company does not appear to have paid or compensated Benchmark Private Wealth Pty Ltd for the labour provided. As creditors are aware, on 3 November 2017 I was appointed Provisional Liquidator of the Company by the Supreme Court of Queensland and then subsequently as Liquidator on 23 March Update on the progress of the liquidation Assets and liabilities The Director of the Company is required to complete and provide to me a statement about the Company's business, property, affairs and financial circumstances, also known as the Report as to Affairs (RATA). The RATA is a snapshot in time as at the date of my appointment of the assets and liabilities of the Company, disclosing book values and the Director s opinion on the estimated realisable value (ERV) for assets. The Director is also required to complete a director and officer s questionnaire, which outline the company background and details to assist with the liquidation.

3 During my appointment as Provisional Liquidator of the Company and as Liquidator of the Company the Director has been requested to complete the RATA and director and officer s questionnaire for the Company. To date, I have not received a properly completed RATA from the Director and no questionnaire has been provided at all. As the Director has failed to submit a properly completed RATA or provide a questionnaire at all, I am required to report him to ASIC. To date, I have identified are a small number of outstanding commissions owed from property developers. Demand letters have issued to the various debtors and collection of the outstanding debtors is in progress. Two bank accounts have been identified with minimal funds and I have received limited statements for these accounts to date. I note that both accounts received funds shortly before liquidation and that those funds were immediately transferred out of the Company s accounts. I have not yet been able to identify as to where the funds were transferred. The following table outlines the assets and liabilities identified to date. Details of assets and liabilities No. $ Assets Receipt of sale commission Withheld Withheld Total asset value Withheld Liabilities Secured Creditors - - Statutory Creditors - - Employees - - Trade Creditors 1 45,000 Related Parties - - Other - - Total Secured and Unsecured 1 45,000 Expected Deficiency Withheld Trading outcomes On appointment, my staff attended the Varsity Parade office. Due to the lack of any evident trading actives, there was no trading operation to continue. Receipts and Payments to date To date there have been no receipts or payments in the liquidation. Creditors should note that the receipts and payments account does not include the cost for liquidator s time incurred to administer the liquidation. As noted above, at this time I am not seeking approval from creditors for my remuneration.

4 Investigations and possible recovery actions Investigations undertaken I have commenced my initial investigations into the affairs of the Company prior to my appointment and any potential recovery actions that may be available to the Liquidator to pursue. My current findings in relation to these investigations are detailed below. Given the limited time that has passed in the liquidation and that further investigations will be undertaken, the below findings are preliminary and may be subject to change. What happened to the business of the Company As previously noted, the Director has not submitted a properly completed RATA and did not provide a director and officer s questionnaire at all. He has therefore not provided any reasons for the Company's financial difficulties or the ultimate need to have the Company wound up. My investigations into the affairs of the Company indicate that the Company's difficulties were brought about by the following reasons: Under capitalisation; Poor financial control including lack of records; and Poor strategic management of the business; Books and records To date I have not been provided with any books and records for the Company apart from correspondence which was secured from Benchmark Private Wealth s outlook account upon appointment. Accordingly, I do not believe that appropriate financial records have been maintained or that the obligation to keep financial records has been complied with. The director may therefore have breached section 286 of the Corporations Act 2001 (Clth) (the Act ), which I am required to report to the ASIC. Insolvent trading As I have not been provided with books and records of the Company I have been unable to conduct cash flow and balance sheet tests for insolvency. I note as per s588e(4) of the Act there is a presumption of insolvency where there has been a failure to maintain financial records as per s286. Further investigations are required to confirm the quantum of any potential insolvent trading action, however, any recovery from such an action is predicated by the financial position of the Director. In this regard, a property search against the Director has identified one property that he owns jointly and a director name search has identified two companies outside of the Benchmark Group where he holds the position of director. A potential insolvent trading claim against the director will be considered further in due course. Voidable transactions My investigations have not identified any voidable transactions in the liquidation to date. Further inquiries to be undertaken I have submitted a report to the ASIC pursuant to s.533 of the Act. ASIC have since requested that a supplementary report be provided with further investigations to be undertaken.

5 Do to the lack of funds within the Company, an application to ASIC s Assetless Administration Fund is being submitted to facilitate further investigations and a supplementary report be completed, as requested. Meetings held To date, I have not been required to hold and therefore have not held a meeting of creditors. Should I decided to hold a meeting of creditors, notification will be issued to all creditors with details of the proposed time and location. Other matters I plan to undertake the following further investigations: Collect sales commission owing to the Company; Further investigate any potential insolvent trading action; and Complete my investigations and reporting to ASIC. Likelihood of a dividend At the current time, there is not expected to be sufficient funds to pay a dividend to priority or unsecured creditors. However, if this changes and I do declare a dividend, any creditor whose claim has not yet been admitted will be contacted and asked to submit a proof of debt. Cost of the liquidation As previously advised in my initial information to creditors, I estimated that my total remuneration will be approximately $30,000 to $50,000. As noted in the initial notification to creditors, the estimate provided was based on my initial understanding of the Company and the specific requirements of the liquidation and may be subject to change. As noted above, ASIC have requested that further investigations be completed and that a supplementary report pursuant to s.533 of the Act be completed. Approval for remuneration associated with the costs of the liquidation (including any funding provided by ASIC s Assetless Administration Fund) will be sought from the Court or the creditors in due course and as appropriate. What happens next in the liquidation? I will proceed with the liquidation, including: Realise the remaining assets. Recover any further available property. Complete my investigations into the Company s affairs. Complete my reporting to the corporate insolvency regulator, ASIC. I may write to you again with further information on the progress of the liquidation. I expect to have completed this liquidation within months.

6 Compliance with best practice I confirm that this report complies with the requirements in the Insolvency Practice Rules (IPR), specifically IPR 70-40, as well as the statements of best practice issued by the Australian Restructuring Insolvency and Turnaround Association (ARITA) with regard to content of the Statutory Report by Liquidator. Where can you get more information? You can access information which may assist you on the following websites: ARITA at ASIC at (search for insolvency information sheets ). Should you have any queries with respect to the above, you may also contact Benjamin Sanders of my office on or via on Benjamin.Sanders@au.gt.com. There is also information about this liquidation on my firm s website. Dated: Thursday, 21 June 2018 Michael Gerard McCann Liquidator List of attachments Appendix A Group Structure

7 Appendix A Group Structure