Creditors for the parent company of collapsed discount store chain Chickenfeed are waiting to retrieve tens of millions of dollars, as lengthy proceedings to recover the funds are still in the early stages, The Examiner reported. Retail Adventures, owned by Tasmanian businesswoman Jan Cameron, was Australia's largest discount variety store operator but went into liquidation in February. Liquidators are now pursuing more than $100 million from Ms Cameron for insolvent trading, preferential payments and an invalid loan. Deloitte liquidator Vaughn Strawbridge told a meeting of creditors last month that discussions were underway with litigation funding organisation Bentham IMF to hold public examinations later this year. If funded, Ms Cameron will be called by the liquidators to face a formal open-court process. Mr Strawbridge told creditors at a meeting that they will have to wait ``significant time'' to make recoveries. ``We want to commence the action as quickly as possible,'' he said. Mr Strawbridge said action against Ms Cameron's companies DSG Holdings Australia and Bicheno Investments for voidable transactions had already begun. Ms Cameron used the companies to buy back the failed discount retailer last year, and Mr Strawbridge said more than $77 million had been lent to Retail Adventures by the companies and up to $50 million was invalid because the loan was secured when Retail Adventures was insolvent in 2011. Read more.
Daily Insolvency News Headlines
Mon., April 21, 2014
Fri., April 18, 2014
Royal Bank of Scotland has been cleared of deliberately engineering the collapse of some of its business customers, but has decided to sell off the £3.2bn commercial property portfolio at the centre of the row, The Guardian reported. The state-backed lender was accused last November in a report by a former government adviser, Lawrence Tomlinson, of putting some distressed commercial clients out of business in order to scoop up assets for its own West Register property business. But Clifford Chance, the law firm commissioned by RBS to undertake an inquiry into the Tomlinson allegations, said there was "no evidence" of fraudulent activity, although it criticised other aspects of the bank's practices. The 60-page report said: "We did not identify any files which fitted the description of the bank 'engineering' a default or 'artificially distressing' a customer." Clifford Chance also dismissed allegations that RBS would undervalue property assets, causing customers to breach loan-to-value agreements. It said: "We found no evidence that the bank 'low-balled' bids to customers in the hope or expectation of acquiring properties at a low price." Read more.
Facing a growing problem of debt defaults, the Chinese government should deploy 100 billion to 200 billion yuan ($16 billion to $32 billion) this year to help restructure indebted companies, a former adviser to the central bank said Thursday, The Wall Street Journal reported. "In the second half of the year, the government should promote debt restructuring in certain sectors," economist Li Daokui said at a news briefing, adding that the funds should be taken from the budget. Strains have started to appear across China's financial sector, with a handful of high profile bond and loan defaults. Sectors hit by overcapacity amid weak demand include solar panels, steel and cement. The country's economic growth slipped to 7.4% year-on-year in the first quarter, its slowest pace in 18 months, and some economists predict growth will not reach the government's target of about 7.5% for all of this year. But Mr. Li said that the problems will be manageable with the economy growing at its current pace, which is still well above levels of most countries. "This round of defaults and restructuring will not be very serious and will mainly affect cities that have developed too quickly, especially where housing has expanded too fast," he said. "Defaults will be limited in scope and remain under effective control." Read more. (Subscription required.)
A group of investors seeking to buy Mt. Gox has launched a website to garner support from creditors of the bankrupt bitcoin exchange to prevent a liquidation of its assets, Reuters reported. "We need your help to stop a liquidation, which would be good neither for Mt. Gox creditors nor bitcoin's reputation with the general public and regulators," the investors wrote on the website. Mt. Gox, once the world's biggest bitcoin exchange, is likely to be liquidated after a Tokyo court dismissed the company's bid to resuscitate its business, the court appointed administrator said on Wednesday. "The Tokyo district court recognized that it would be difficult for the company to carry out the civil rehabilitation proceedings and dismissed the application for the commencement of the civil rehabilitation proceedings," he said. Read more.
Up to 75,000 van and car drivers are being advised to seek alternative insurance cover following the collapse of Dublin-based Setanta Insurance, the Irish Times reported. The insurance firm, which was licensed by the Maltese Financial Services Authority, had been in the process of winding up its business here since January. However, at an extraordinary general meeting yesterday, shareholders were told a solvent run-off of the business was no longer possible and a decision was made to immediately dissolve the business. The company, which has offices in Blanchardstown, had been selling car and van insurance in the Republic since 2007. The Central Bank said today it had been notified by the financial authorities in Malta - where the insurer is incorporated - that its shareholders had resolved to wind up the company. The process is to be overseen by the Maltese Financial Services Authority. Read more.
Shoe Rack plans to seek fresh investment after the appointment of an examiner to the footwear chain, the Irish Times reported. The High Court appointed accountant Anthony Weldon of Kieran Ryan & Co as examiner following a petition from its directors earlier this month. Shoe Rack employs 70 people and operates 10 stores under its own brand and three concessions. It recently closed outlets in Cork and Dublin. The chain has been struggling with a number of leases, dating back to the property bubble, where rents are above current market levels and which are governed by“upward-only reviews”. The examiner is expected to seek fresh investment that will form part of a rescue plan – known formally as a scheme of arrangement – for the business. Shoe Rack’s managing director Mark Buckley said yesterday that its management is “very confident that it can come out of the examinership without losing jobs”. Mr Buckley and members of his family own the chain, which has been trading for 22 years and has outlets in most key urban centres in the Republic. Read more.