SOME 100 unsecured creditors of the company that ran a local steel company are unlikely to recover their money, a liquidator says.
The good news is that Mass Steel employees will be paid their outstanding entitlements through a federal government scheme. Michael Slaven, partner with Canberra-based chartered accountants Kazar Slaven, was appointed liquidator of the Cemetery St firm on June 13.
The outfit, which traded as Old MS Pty Ltd, closed its doors last month, leaving 15 people out of work.
Company managing director Rohan Arnold had advised him more than $2 million was owing to unsecured creditors, Mr Slaven told the Post. This excluded money owed to Mr Arnold’s other related entities, totalling $1.5 million.
But the Goulburn Post has learnt through liquidation documents that unsecured creditors total $4.4m to suppliers throughout NSW, the ACT and Queensland. Some of these are Goulburn and district firms.
The ledger also lists $482,546 owed to MG Administration Pty Ltd, one of Mr Arnold’s other firms. This company was also placed in liquidation on the same day.
Mr Slaven said both companies’ directors initiated the liquidation because they were insolvent. He could not explain the reason for the difficulties at this stage.
Mass Steel had leased the old Kermac Welding and Engineering buildings since January, 2011. It initially took on more workers but shed them as competition stiffened for construction projects.
Mr Arnold last month blamed a “mix of ingredients” for the closure but principally, competition from cheap steel imports.
Employees have been chasing entitlements and superannuation ever since.
Mr Slaven said there was no question workers would recover their benefits through the Government General Employee Entitlements and Redundancy Scheme (GEERS). He did not have a total figure.
He will submit a claim for all former workers’ superannuation to the Australian Taxation Office (ATO). But whether they received it all depended on how much he could recover from Mass Steel.
Suppliers are in similar limbo.
“Looking at the company position, there will be little or no return for unsecured creditors,” Mr Slaven said.
Some parties are owed more than $400,000, according to liquidation documents.
MG Administration Pty Ltd has two creditors totalling $790,000 – the ATO in regard to superannuation and withholding tax, and the ACT Revenue Office over payroll tax.
Mr Slaven said his investigation would cover transactions involving the companies, associated entities and trusts.
“Our role is to investigate the reason for the insolvency, the companies’ conduct, any possible breaches of the Corporations Act and complete a report to the Australian Securities and Investment Commission,” Mr Slaven said.
If it was revealed the directors knowingly allowed the companies to trade while insolvent, this would also be reported. But he was yet to form an opinion on this aspect.
The documents also reveal another of Mr Arnold’s companies, Almar Industries Pty Ltd, was liquidated in 2006.
A creditors meeting for the current companies under liquidation will be held in Canberra next Friday.
They’ll be given a summary of financial position and asked to vote on whether Kazar Slaven should continue as liquidators. Mr Slaven said he hoped to find out the reason for the difficulties by the end of August.
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