beechey carriers pty limited r&m beechey storage pty limited acn 082...

Beechey Carriers Pty Limited

(Administrators Appointed)

ACN 082 807 314

R&M Beechey Storage Pty Limited (Administrators Appointed)

ACN 082 808 857

RMB Equipment Pty Limited

(Administrators Appointed)

ACN 109 335 195

Beechey Carriers Brisbane Pty Limited (Administrators Appointed)

ACN 109 645 070

(Together referred to as “the Group”)

Report by Administrators Pursuant to Section 439A(4)(a) of the Corporations Act 2001

Ryan Eagle and Morgan Kelly

18 July 2012

439a report master.docx A05:49630 18 July 2012| Page 0

Table of Contents

Contents

Glossary of terms .............................................................. 1

1 Executive summary ........................................................... 2

2 Introduction ....................................................................... 3

3 Group information.............................................................. 6

4 Historical financial information ......................................... 10

5 Statement by directors .................................................... 22

6 Statutory investigations ................................................... 36

7 Creditors’ options, dividend estimates and cost estimates44

8 Administrators’ opinion .................................................... 48

9 Administrators’ remuneration report ................................ 48

10 Further queries ................................................................ 48

Annexure

A Notice of Meeting of Creditors ......................................... 49

B Informal Claim Form for Voting Purposes ........................ 50

C Appointment of Proxy Form ............................................. 51

D Beechey Administrator’s Remuneration Report ............... 52

E Beechey Storage Administrator’s Remuneration Report .. 53

F RMB Equipment Administrator’s Remuneration Report ... 54

G Carriers Brisbane Administrator’s Remuneration Report . 55

H IPA – Creditor Information Sheet – Offences, Recoverable Transactions and Insolvent Trading ................................. 56

439a report master.docx A05:49630 18 July 2012| Page 1

Glossary of terms

Abbreviation Description

ABN Australian Business Number

ACN Australian Company Number

Act The Corporations Act 2001

Allpaap All Present and After Acquired Property

ASIC Australian Securities and Investments Commission

ATO Australian Taxation Office

Beechey Beechey Carriers Pty Ltd (Administrators Appointed)

Beechey Storage R&M Beechey Storage Pty Ltd (Administrators Appointed)

RMB Equipment RMB Equipment Pty Ltd (Administrators Appointed)

Carriers Brisbane Beechey Carriers Brisbane Pty Ltd (Administrators Appointed) ATF for the New England Investment Trust.

Dick Smith Dick Smith Electronics Pty Ltd

Directors Ronald Beechey, Matthew Beechey and Karen Thomas

DOCA Deed of Company Arrangement

ERV Estimated Realisable Value

GEERS General Employee Entitlements and Redundancy Scheme

IPA Insolvency Practitioners Association of Australia

MAFA Master Asset Finance Agreement

NAB National Australia Bank

NDF Facility NAB debtor finance facility

PILN Payment In Lieu of Notice

PMSI Purchase Money Security Interest

PPE Property, Plant and Equipment

Regulation The Corporation Regulations 2001

SGC Superannuation Guarantee Charge

Statement Directors’ Statement about the Group’s Business, Property, Affairs and Financial Circumstances

Group

Beechey Carriers Pty Ltd (Administrators Appointed);

R&M Beechey Storage Pty Ltd (Administrators Appointed);

RMB Equipment Pty Ltd (Administrators Appointed); and

Beechey Carriers Brisbane Pty Ltd (Administrators Appointed).

439a report master.docx B09:84356 18 July 2012 | Page 2

1 Executive summary

Morgan Kelly and I were appointed Administrators of Beechey Carriers Pty Ltd (Administrators Appointed), R&M Beechey Storage Pty Ltd (Administrators Appointed), RMB Equipment Pty Ltd (Administrators Appointed) and Beechey Carriers Brisbane Pty Ltd (Administrators Appointed) (together referred to as “the Group”) on 22 June 2012 pursuant to Section 436A of the Corporations Act 2001 (“the Act”). Creditors ratified our appointment as Administrators of Beechey Carriers Pty Ltd (Administrators Appointed) (“Beechey”) at the first meeting of creditors held on Wednesday 4 July 2012 and no committee of creditors was appointed. No quorum was present for the remaining companies in the Group and an adjourned meeting was held on Wednesday 11 July 2012. There were no quorums present at the adjourned meeting and as such the meeting was deemed to have lapsed and our appointment as Administrators was ratified.

Creditors will determine the Group’s future at a second concurrent meeting of creditors convened for Friday 27 July 2012 at 11am at the offices of Ferrier Hodgson being the Grosvenor Place, Level 13, 225 George Street, Sydney NSW.

Following an assessment of the financial position of the Group by the Directors and their advisors, the Directors appointed Morgan Kelly and I as Administrators of the Group. After urgently assessing the possibility of trading on the Group, the Administrators undertook a controlled closedown of the Group as a result of its financial position.

I carried out investigations into the Group’s affairs to assist in formulating my opinion as to what is in the creditors’ best interests moving forward. The main issues arising from my investigations into the Group’s affairs are:

That the Group had insufficient cashflow in order to sustain its operations; The Group had substantial debts outstanding to unsecured and statutory creditors that

were significantly aged; The Group had a large exposure with regard to unpaid superannuation entitlements; That the Group may have traded whilst insolvent; and Potential instances of preference payments made to unsecured creditors.

Due to the encumbrances on the Group’s main assets as well as a significant shortfall for employee entitlements it is unlikely that there will be any assets available for unsecured creditor claims.

As at the date of this report, I have not received a DOCA proposal from the Directors. In light of this, and the issues outlined above, I am of the opinion that there is no alternative but for the Group to be placed into Liquidation at the meeting to be held on Friday 27 July 2012.

In a liquidation, employees may be entitled to claim their entitlements (other than superannuation) under the Federal Government’s GEERS. Should the Group proceed to liquidation, there does not appear to be any impediment to employees of the Group making a claim against GEERS, subject to the usual financial limits imposed by the scheme.


2 Introduction

2.1 Purpose of appointment and this report

Morgan Kelly and I were appointed Administrators of the Group on Friday 22 June 2012, pursuant to Section 436A of the Act.

The purpose underlying an Administrator’s appointment is to allow for independent control and investigation of an insolvent company’s affairs. During the administration period, creditors’ claims are put on hold. I am required to provide creditors with information and recommendations to assist creditors in deciding upon the Group’s future.

Section 439A(4) of the Act explains the purpose of an Administrator’s report in providing that the notice (of second meeting) must be accompanied by a copy of:

(a) A report by the Administrator about the company’s business, property, affairs and financial circumstances;

(b) A statement setting out the Administrator’s opinion about each of the following matters:

Whether it would be in the creditors’ interests for the company to execute a Deed of Company Arrangement;

Whether it would be in the creditors’ interests for the administration to end; Whether it would be in the creditors’ interests for the company to be wound up; His or her reasons for those opinions; and

(c) If a Deed of Company Arrangement is proposed – a statement setting out details of the proposed deed.

In the available time, I have undertaken the investigations detailed in section 6 of this report. These investigations have enabled me to form an opinion about the Group’s future. My opinion is set out in section 8 of this report.

The operations of the businesses within the Group are intrinsically linked. Accordingly, in order to minimise costs I have prepared a joint report for the companies. However, any resolutions put forward at the second meeting of creditors will be voted on an entity by entity basis.

It should be noted that Carriers Brisbane is the trustee for the New England Investments Trust, and as trustee of the trust Carriers Brisbane is liable for the liabilities of the trust.

2.2 Basis of Report

This report has been prepared primarily from information received from the Directors of the Group, the Group’s books and records and as a result of my investigations. Whilst I have investigated the affairs of the Group, there may be certain matters of which I am not aware. For the avoidance of doubt I have not conducted an audit of the Group.

In order to complete my report I have utilised information from:

The ASIC; The PPSR; The Group’s books and records; The Directors; Employees of the Group; Debtors of the Group; The secured creditor; Asset financiers of the Group; Valuers and auctioneers; Unsecured creditors; and Public databases.


2.3 First meeting of creditors

Creditors of Beechey attended a first meeting of creditors held at the offices of Ferrier Hodgson on Wednesday 4 July 2012. At that meeting, creditors ratified our appointment as Administrators and resolved not to appoint a committee of creditors.

A quorum was not present at the first meeting for Beechey Storage, RMB Equipment or Carriers Brisbane. An adjourned meeting for these companies was held on Wednesday 11 July 2012. A quorum was not present at the adjourned meeting for any of the entities and as such the meeting lapsed in accordance with Regulation 5.6.16 and our appointment was deemed ratified.

2.4 Second meeting of creditors

Pursuant to Section 439A of the Act, the second concurrent meeting of creditors of the Group is convened for Friday 27 July 2012 at 11.00am at the offices of Ferrier Hodgson, Level 13, 225 George Street, Sydney. At the second meeting, creditors will decide the Group’s future by voting on one of the following options:

That the administration should end and control of the Group should revert to its Directors; or,

That the Group should be wound up.

In relation to the second meeting of creditors, I enclose the following documents for each company:

(a) Notice of meeting of creditors: Friday, 27 July 2012 (Annexure A)

Please note that the meeting commences at 11:00am. You should arrive for registration at least fifteen minutes prior to the meeting.

(b) Informal Claim Form for Voting Purposes. (Annexure B)

A person is not entitled to vote at the meeting unless they provide particulars of the debt or claim to the Administrators before the meeting. Please note this form is for voting purposes only. All creditors must furnish full details of their claims, indicating whether they rank as secured, preferential or unsecured, and whether they claim title to any goods supplied to the Group or any lien over goods in their possession which are property of the Group.

(c) Appointment of Proxy form. (Annexure C) The form enables you to appoint a person to act on your behalf at the meeting.

The Informal Claim Form for Voting Purposes and Proxy form should be lodged with this office before the meeting and, in any event, no later than 4.00pm on Thursday 26 July 2012. Forms can be sent by facsimile to (02) 9286 9888 and marked to the attention of Robert Beaumont or scanned and emailed to [email protected]. However, Regulation 5.6.36A requires lodgement of the original Proxy form with the Administrators’ office within 72 hours of lodging the faxed copy.

mailto:[email protected]


2.5 Non disclosure of certain information

There are sections of this report wherein I considered it inappropriate to disclose certain information to creditors. Such information includes:

Valuation of specific assets; and Legal claims that will potentially be pursued by the Group.

I fully recognise the need to provide creditors with complete disclosure of all necessary information relating to the Group. However, I believe this information is commercially sensitive and it is not in the creditors’ interests for me to disclose the information publicly at this stage as it may prejudice the realisation of these assets.

2.6 Declaration of independence, relevant relationships and indemnities

The Administrators provided a Declaration of Independence, Relevant Relationships and Indemnities (“DIRRI”) to creditors with their first circular to creditors and also tabled the DIRRI at the first meeting of creditors.

There has been no change in the DIRRI since that time.

Morgan Kelly and I are partners of Ferrier Hodgson. Ferrier Hodgson is one of Australia’s and the Asia-Pacific’s largest independent corporate restructuring practices with 30 partners and over 300 staff throughout Australia, New Zealand and Asia. Ferrier Hodgson does not provide accounting, audit, legal or taxation services.

Morgan Kelly and Ryan Eagle are Chartered Accountants, Registered and Official Liquidators and members of the IPA.

Further information regarding Ferrier Hodgson and the Administrators can be obtained from the firm’s website at www.ferrierhodgson.com.

2.7 Receipts and payments

A summary of the Administrators’ receipts and payments for the period to 17 July 2012 are included within Part B of the Administrators’ Remuneration Report for Beechey attached as Annexure D, the Administrator’s Remuneration Report for Beechey Storage attached as Annexure E, the Administrator’s Remuneration Report for RMB Equipment attached as Annexure F and the Administrator’s Remuneration Report for Carriers Brisbane attached as Annexure G.

http://www.ferrierhodgson.com/


3 Group information

3.1 Statutory information

A search of the ASIC database revealed the following information.

3.1.1 Incorporation date and registered office

The incorporation date and registered office of the entities within the Group is as follows:

Entity Incorporation Date Registered Office

Beechey Carriers Pty Limited 25 May 1998

McLean Charge Partners

30 Grose Street

North Parramatta NSW 2151

Beechey Carriers Brisbane Pty Limited 22 June 2004


30 Grose Street


R&M Beechey Storage Pty Limited 29 May 1998


30 Grose Street


RMB Equipment Pty Limited 1 June 2004


30 Grose Street


3.1.2 Group officers

The current officers of the entities within the Group are:

Entity Name Role Appointment Date

Beechey Carriers Pty Limited Matthew Ronald Beechey Director/Secretary 29 May 1998

Karen Louise Thomas Director/Secretary 14 August 2007

Beechey Carriers Brisbane Pty Limited Matthew Ronald Beechey Director 22 June 2004

Karen Louise Thomas Director/Secretary 22 June 2004

R&M Beechey Storage Pty Limited Ronald Beechey Director/Secretary 31 August 2002

Karen Louise Thomas Director/Secretary 14 August 2007

RMB Equipment Pty Limited Matthew Ronald Beechey Director 1 June 2004

Karen Louise Thomas Director/Secretary 1 June 2004

The officers of the entities within the Group have not changed over the past 12 months.

A search of the National Personal Insolvency Index maintained by the Insolvency Trustee Service, Australia, shows that the Group’s directors are not bankrupt or subject to a Personal Insolvency Agreement under Part X of the Bankruptcy Act 1966.


3.1.3 Shareholders

The ASIC database discloses the shareholders of the entities within the Group to be:

Entity Shareholder Class Number of Shares

Paid

Beechey Carriers Pty Limited Matthew Ronald Beechey Ordinary 1 Yes

Ronald Beechey Ordinary 1 Yes

Beechey Carriers Brisbane Pty Limited Matthew Ronald Beechey Ordinary 1 Yes

Karen Lousie Thomas Ordinary 1 Yes

R&M Beechey Storage Pty Limited Matthew Ronald Beechey Ordinary 1 Yes

Ronald Beechey Ordinary 1 Yes

RMB Equipment Pty Limited KM Thomas Pty Limited Ordinary 150 Yes

MKAJ Pty Limited Ordinary 150 Yes

3.1.4 Personal Property Security Register (“PPSR”)

3.1.4.1 Registered Charge-Holder

A search of the ASIC database has revealed that the NAB has an all present and after acquired property (“Allpaap”) charge (formerly known as a fixed and floating charge) over each of Beechey Carriers, Beechey Storage, RMB Equipment and Carriers Brisbane.

NAB has provided two major types of finance to the Group, that is:

Debt facility Group Entity Amount Outstanding

$M

NAB Debtor Finance Facility (“NDF Facility”) Beechey Carriers 1.35

Master Asset Finance Agreement (“MAFA”) RMB Equipment 3.56

Total 4.91

I understand that NAB also had an overdraft with the Group however at this stage I have not been provided with the current balance. My investigations continue in this regard.

The obligations of RMB Equipment under the MAFA and Beechey Carriers with respect to the debtor finance facility are secured by way of security over Allpaap of RMB Equipment, Beechey Carriers and Carriers Brisbane. I have undertaken a preliminary review of the NAB’s security interest and determined it to be, prima facie, valid.

Whilst a search of the ASIC database has revealed that NAB has an Allpaap charge over Beechey Storage, at this time I have not been provided with a copy of the charge document. My investigations are continuing in this regard.

In accordance with the provisions of Section 450A(3) of the Act, I notified NAB of our appointment and advised of their right to enforce their security within 13 business days after our appointment. This period has now expired.


3.1.4.2 Purchase Money Security Interest (“PMSI”)

Following the introduction of the PPSR on 30 January 2012, a number of creditors have registered security interests under the PPSR regime as follows:

Item #

Entity Secured Party Type

1 Beechey Carriers Air Liquide Australia Limited PMSI (Other goods)

2 Beechey Carriers Pro-Pack Packaging (Aust) Pty Ltd PMSI (Other goods)

3 Beechey Carriers A.P. Eagers Limited PMSI (Other goods)

4 Beechey Carriers MTU Detroit Diesel Australia Pty Limited PMSI (Other goods)

5 Beechey Carriers Campbell’s Fertilisers Australasia Pty Ltd and E.E. Muir & Sons Pty. Ltd

PMSI (Other goods)

6 RMB Equipment National Australia Bank Motor Vehicle (15)

7 RMB Equipment National Australia Bank Other goods

8 RMB Equipment National Australia Bank PMSI (Other goods) (2)

9 RMB Equipment National Australia Bank PMSI (Motor Vehicle) (6)

10 RMB Equipment Westpac Banking Corporation Motor Vehicle (3)

All goods subject to PMSI items 1 to 5 have been returned to those suppliers to the extent their goods were in the possession of the Group on our appointment date.

Items 6 to 9 note PPSR interests to the NAB. These security interests relate to trucks, motor vehicles and PPE financed under the MAFA explained above and further in Section 5.1.9.4.

Item 10 relates to trucks and trailers financed directly by Westpac. These assets are further explained in Section 5.1.9.1.

3.1.5 Winding up Applications

There were no winding up applications filed with the Court in relation to the Group prior to our appointment.

3.2 Group history

The Group was incorporated in 1976 by the then director Ron Beechey with the original depot located in Alexandria, NSW.

With a continued track record of customer satisfaction and a focus on customer service Ron Beechey grew a solid and loyal client base and developed a complete transport service. Following the philosophy of family based expertise Ron gathered the support of his son Matthew Beechey and daughter Karen Thomas who are the current active directors of the Group. I note that Ron Beechey is listed as a director of Beechey Storage, however, he has not taken part in the day-to-day running of the Group for some years.

Dedication to a growing customer base led to ongoing business expansion. The acquisition of Whileys Transport in 2004 increased service capability and flexibility. In 2005, Motorcade Transport Brisbane was acquired (which also consisted of J-Link Transport in Sydney) expanding the operation into Sydney/Brisbane linehaul distribution services.

Sydney/Melbourne linehaul distribution grew as a result, and the Group also opened a depot in Melbourne at 421 Grieve Parade, Altona North VIC.


The company also provided warehousing solutions from leased premises located at 116 Jedda Road, Prestons NSW.

At the date of our appointment the Group’s fleet comprised of 18 prime movers, 6 rigid trucks, 44 trailers and 1 Omega container forklift.

3.3 Decision to appoint Administrators

The decision to appoint Administrators was a result of a variety of challenges faced by the Group, which can be summarised as follows:

Supreme Court proceedings commenced by the Group’s previous landlord. The Group were successful in defending these proceedings over the course of 6 years at significant cost. The Group were awarded costs for an amount in excess of $350,000 plus interest. These proceedings are discussed further in Section 5.1.10.1.

Loss of business from Dick Smith (March 2012) and Breville (February 2012) with a loss of annual revenue of approximately $3.5m per annum.

An inability to reduce staff headcount required as a result of the global financial crisis which placed a large overhead burden on the Group.

Inability to quickly rationalise fleet size and fund shortfalls to financiers as a result of the loss of major distribution customers. As a consequence the Group had to fund contracted lease payments on parts of the fleet that were not being utilised.

Failure to meet obligations under an ATO repayment plan.

Prior to the appointment of the Administrators the Group had been working to develop a restructuring plan to rationalise its fleet and operations. During this time the Group was in discussions with its major financier, NAB, surrounding its future funding requirements and its ability to meet its substantial hire purchase obligations and commitments under its debtor finance facility. Unfortunately, an adequate restructuring plan could not be developed and agreed with the Group’s major financiers. With a significant payment required to be met under an ATO repayment plan, coupled with the various challenges detailed above the Directors resolved to appoint Administrators to the Group. These appointments took place on Friday, 22 June 2012.

3.4 Actions taken following appointment

An urgent assessment of the financial position of the Group revealed the following issues with continuing to trade the Group in Administration:

There was minimal available cash on hand at the date of our appointment to fund operational trading costs;

The risk that customers would have alleged set off rights against post appointment debtors and as a result having to fund ongoing trading deficiencies out of asset sale proceeds further dissipating the assets available to creditors;

Large unknown and variable repairs and maintenance and fuel costs associated in trading a business of this nature;

There was a risk that customers upon hearing of the administration would move to another operator to guarantee continued service; and

Previous experience has indicated that attempting to sell similar transport businesses has been unsuccessful.

As a result as Administrators the decision was made to close the Group’s operations. On the afternoon of Friday 22 June 2012 we implemented a controlled closedown process, which involved the completion of existing deliveries where possible to ensure that customer deliveries were completed and the existing and associated debtors collected.


4 Historical financial information

4.1 Preparation of financial statements

I have been provided with the Group’s financial statements for the two financial years up to 30 June 2011. These financial statements were prepared by the Group’s accountant but were not audited.

The Group did not prepare any management accounts. Accordingly, the annual accounts are the extent of information available to me to assess historical financial information and I do not have access to any financial statements for the period from 1 July 2011 to the date of my appointment.

Whilst the Group is made up of four separate companies it effectively traded as one entity. I note that it is difficult to derive constructive analysis from the unaudited financial statements due to the operation of internal charges between the entities of the Group. There are situations where the liabilities of one company being were paid for by other entities in the Group and there were a number of intercompany loans that had been created as a result.

I will however set out the financial statements for each company on hand as well as my preliminary analysis of these statements.

At section 6.2.6 of this report, I comment on the adequacy of the Group’s books and records.


4.2 Profit and loss statement and preliminary analysis

Beechey

Set out below is a summary of the profit and loss statement for Beechey for the past two financial years together with my preliminary analysis.

Profit and Loss

FY11 FY10

Annual Annual

($) ($)

Revenue 15,018,734 13,725,923

Other Income 0 111,742

Total Income 15,018,734 13,837,665

Less: Expenses

Purchases (13,949,014) (13,259,134)

Accountancy Expenses (30,100) 0

Advertising Expenses (1,335) (850)

Bad and Doubtful Debt Expenses 0 0

Depreciation and Amortisation Expenses (43,770) (86,121)

Employee Benefits Expenses (8,875) (14,626)

Finance Costs 0 (30,154)

Other Expenses (722,635) (400,393)

Total Expenses (14,755,728) (13,791,278)

Profit Before Income Tax 263,006 46,387

Income Tax Expense (161,446) 0

Profit After Income Tax 101,559 46,387

My preliminary comments on the profit and loss are as follows:

Beechey and Carriers Brisbane had an arrangement whereby Beechey would distribute funds to Carriers Brisbane in order for Carriers Brisbane to pay for invoices related to the day-to-day trading of the Group. As a result the majority of purchases are made up of this distribution to Carriers Brisbane. The distribution is calculated by multiplying revenue of Beechey by 0.78;

In FY10 and FY11 Beechey achieved a gross margin of 4% and 7% respectively; In FY10 and FY11 Beechey achieved return on sales of 0.34% and 1.75% respectively;

and Beechey had traded profitably during the period of analysis with improved trading in

FY11 compared with FY10.


Beechey Storage

Set out below is a summary of the profit and loss statement for Beechey Storage for the past two financial years together with my preliminary analysis.

Profit and Loss

FY11 FY10

Annual Annual

($) ($)

Revenue 1,152,426 1,170,957

Other Income 0 (720)

Total Income 1,152,426 1,170,237

Less: Expenses

Accountancy Expenses (300) (265)

Depreciation and Amortisation Expenses (212) 0


Finance Costs 0 0

Other Expenses (96,290) (151,165)

Total Expenses (1,029,604) (1,148,548)


Income Tax Expense (67,207) (5,568)



Beechey Storage and Carriers Brisbane had an arrangement whereby Carriers Brisbane would distribute funds to Beechey Storage in order for Beechey Storage to pay employee related expenses. As a result the revenue figure above is made up of this distribution from Carriers Brisbane. The distribution is calculated by multiplying expenses of Beechey Storage by 1.03.


RMB Equipment

Set out below is a summary of the profit and loss statement for RMB Equipment for the past two financial years together with my preliminary analysis.

Profit and Loss

FY11 FY10

Annual Annual

($) ($)

Revenue 1,541,729 1,341,374

Other Income (158,200) (122,076)

Total Income 1,383,529 1,219,298

Less: Expenses

Direct Expenses

Accountancy Expenses (120) (2,409)


Finance Costs (8,393) (11,736)

Other Expenses (467,527) (357,916)

Total Expenses (1,295,598) (1,225,447)

Profit Before Income Tax 87,931 (6,149)

Income Tax Expense (18,749) 0

Profit After Income Tax 69,181 (6,149)


RMB Equipment and Carriers Brisbane had an arrangement whereby Carriers Brisbane would distribute funds to RMB Equipment in order for RMB Equipment to pay expenses related to maintaining the fleet of trucks and trailers owned by the Group. As a result the revenue figure above is made up of this distribution from Carriers Brisbane. The distribution is calculated by multiplying gross assets of RMB Equipment by 0.02.


Carriers Brisbane

Set out below is a summary of the profit and loss statement for Carriers Brisbane for the past two financial years together with my preliminary analysis.

Profit and Loss

FY11 FY10

Annual Annual

($) ($)

Revenue 12,783,488 10,540,307

Other Income (9,121) 0

Total Income 12,774,367 10,540,307

Less: Expenses

Direct Expenses (10,965,120) (8,818,701)

Accountancy Expenses (64,165) (118,059)

Advertising Expenses (4,615) (1,566)

Bad and Doubtful Debt Expenses 0 (2,030)



Finance Costs (785) (1,214)

Other Expenses (1,700,319) (1,549,240)

Total Expenses (12,763,706) (10,508,314)

Total Available for Distibution 10,661 31,993

Beneficiaries Distribution

Matthew Beechey Family Trust (5,330) (15,996)

Karen Thomas Family Trust (5,330) (15,997)


Beechey and Carriers Brisbane had an arrangement whereby Beechey would distribute funds to Carriers Brisbane in order for Carriers Brisbane to pay for expenses relating to the day-to-day trading of the Group. As a result the revenue figure above is made up of this distribution from Beechey. The distribution is calculated by multiplying total income of Beechey by 0.78.


Combined Profit & Loss

Having regard to the fact that viewing the historical performance of the Group’s four entities separately provides little constructive analysis, and to the nature of the relationship between the entities in the Group, I thought it necessary to provide creditors with a combined profit and loss statement summary for the past two financial years together with my preliminary analysis. It should be noted that these are consolidated results exclusive of intercompany eliminations and as such little reliance can be placed on the figures.

Profit and Loss

FY11 FY10

Annual Annual

($) ($)


Income Tax Expense (247,402) (5,568)


Having regard to my comments above on the nuance to be placed on the statements the table suggests that the Group traded profitably during FY10 and FY11. However reviewing the profit and loss on a standalone basis without regard to the liability and cashflow position does not portray a complete picture as to the historical financial position of the Group. There were certain ATO liabilities (including employee superannuation) that were not paid for by the Group during the period under review (discussed further in section 6.2.1).


4.3 Balance sheet and preliminary analysis

Beechey

A summary of Beechey’s balance sheet as at 30 June 2010 and 30 June 2011 is set out below together with my preliminary analysis. Again having regard to the various internal charges these statements should be considered with a degree of scepticism.

Balance Sheet

30/06/2011 30/06/2010

($) ($)

Current Assets

Cash and Cash Equivalents 55,167 51,450

Trade and Other Receivables 2,299,064 2,146,190

Prepayments 76,411 76,411

Total Current Assets 2,430,642 2,274,051

Non-Current Assets

Unsecured Loans

R&M Beechey Storage Pty Ltd 2,404,340 1,515,033

RMB Equipment Pty Ltd 5,366,302 3,655,004

Matthew Beechey 0 48,848

Herd Haulage 10,164 10,164

Matthew Beechey Family Trust 5,330 0

Karen Thomas Family Trust 5,330 0

Property, Plant & Equipment 156,659 203,020

Total Non-Current Assets 7,948,125 5,432,069

Total Assets 10,378,767 7,706,120

Current Liabilities

Trade and Other Payables (698,704) (411,400)

Financial Liabilities (1,587,410) (1,551,617)

Tax Liabilities (134,092) 32,982

Total Current Liabilities (2,420,206) (1,930,035)

Non-Current Liabilities

Unsecured Loans

Beechey Carriers Brisbane Pty Ltd (7,212,913) (5,105,189)

Ronald Beechey (17,131) (43,939)

Total Non-Current Liabilities (7,230,044) (5,149,128)

Total Liabilities (9,650,251) (7,079,163)

Net Assets (Liabilities) 728,516 626,957


My preliminary comments on the balance sheet are as follows:

Non-current assets as at 30 June 2011 are comprised of $7.8 million of intercompany loans due from Beechey Storage and RMB Equipment which are likely to have a nil value;

Non-current liabilities as at 30 June 2011 are comprised of a $7.2 million intercompany liability to Carriers Brisbane; and

The net effect of removing the intercompany loans would equate to a net asset position of $171k as at 30 June 2011.

Beechey Storage

A summary of Beechey Storage’s balance sheet as at 30 June 2010 and 30 June 2011 is set out below together with my preliminary analysis.

Balance Sheet

30/06/2011 30/06/2010

($) ($)

Current Assets

Cash and Cash Equivalents 379 1,957

Total Current Assets 379 1,957

Non-Current Assets

Unsecured Loans

Beechey Carriers Brisbane Pty Ltd 2,869,448 1,888,683

Property, Plant & Equipment 849 1,061


Total Assets 2,870,676 1,891,701

Current Liabilities


Provisions (16,083) (16,083)

Tax Liabilities (40,162) (489)

Total Current Liabilities (284,500) (250,449)


Unsecured Loans

Beechey Carriers Pty Ltd (2,404,340) (1,515,033)





Non-current assets as at 30 June 2011 comprised of a $2.9 million intercompany loans due from Carriers Brisbane which is likely to have a nil value;

Non-current liabilities as at 30 June 2011 are comprised of a $2.4 million intercompany liability to Beechey; and


The net effect of removing the intercompany loans would equate to a net liability position of $283k as at 30 June 2011.

RMB Equipment

A summary of RMB Equipment’s balance sheet as at 30 June 2010 and 30 June 2011 is set out below together with my preliminary analysis.

Balance Sheet

30/06/2011 30/06/2010

($) ($)

Current Assets


GST Refund 32,660 32,660

Total Current Assets 89,119 89,119

Non-Current Assets

Intangible Assets 60,000 60,000

Unsecured Loans

Matthew Beechey Family Trust 319,317 319,317

Karen Thomas Family Trust 265,342 265,342

Beechey Carriers Brisbane Pty Ltd 2,240,904 2,240,904

Property, Plant & Equipment 6,205,897 6,383,035


Total Assets 9,180,579 9,357,717

Current Liabilities


Financial Liabilities (1,667,402) (1,667,402)

Tax Liabilities 15,303 15,303

Other Current Liabilities (940) (940)



Secured Liabilities (3,422,156) (3,422,156)

Unsecured Loans

Karen Thomas (76,813) (76,813)

Matthew Beechey (50,000) (50,000)

Beechey Carriers Pty Ltd (3,655,004) (3,655,004)






Non-current assets as at 30 June 2011 comprised of related party loans totalling $2.8 million;

Non-current liabilities as at 30 June 2011 comprised of related party loans totalling $3.8 million; and

The net effect of removing these related party loans would equate to a net asset position of $1.2 million. This asset position is expected given RMB Equipment holds the Group’s major assets being the majority of the vehicles and trailers.


Carriers Brisbane

A summary of Carriers Brisbane’s balance sheet as at 30 June 2010 and 30 June 2011 is set out below together with my preliminary analysis.

Balance Sheet

30/06/2011 30/06/2010

($) ($)

Current Assets


Trade and Other Receivables 96,805 25,897

Prepayments 7,561 33,061

Total Current Assets 113,145 71,682

Non-Current Assets

Rental Bond 58,037 54,812

Unsecured Loans

Beechey Carriers Pty Ltd 7,212,913 5,105,189

Matthew Beechey Family Trust 113,965 0

Karen Thomas Family Trust 133,691 19,053

Beechey Properties Pty Ltd 212 0

Property, Plant & Equipment 70,283 79,630


Total Assets 7,702,247 5,330,366

Current Liabilities

Trade and Other Payables (1,080,806) (1,005,252)

Provisions (155,353) (155,353)



Unsecured Loans

RMB Equipment Pty Ltd (3,596,459) (2,240,904)

R&M Beechey Storage Pty Ltd (2,869,448) (1,888,683)

Matthew Beechey Family Trust 0 (39,994)



Net Assets (Liabilities) 180 180



Non-current assets as at 30 June 2011 comprised of related party loans totalling $7.5 million;

Non-current liabilities as at 30 June 2011 comprised of related party loans totalling $6.5 million; and

The net effect of removing these related party loans would equate to a net liability position of $1 million.

Group Net Assets (Liabilities)

Due to the nature of Group operations, I considered it useful to provide creditors with a summary of the Group’s net assets, as detailed below.

Balance Sheet

30/06/2011 30/06/2010

($) ($)

Net Assets (Liabilities) 1,174,269 1,194,232

The Group has a positive net asset position in both FY10 and FY11 according to the unaudited accounts.


5 Statement by directors

5.1 Summary

Section 438B of the Act requires the Directors to give the Administrators’ a Statement about the Group’s business, property, affairs and financial circumstances. I note that as at the date of this report I have not yet received the Statement from the Directors. The Directors have advised that I will receive the Statement prior to the second meeting of creditors. I will provide details of any relevant points raised in these Statements to creditors at this time.

For the benefit of creditors I have detailed below the estimated surplus / (deficiency) to creditors for each of the entities that make up the Group.

Beechey

Statement as at 15 June 2012 Report

Reference

Administrators’ ERV

High

$


Low

$

Assets:

Interest in land 5.1.1 Nil Nil

Sundry debtors 5.1.2 177,354 158,864

Cash at bank and cash on hand 5.1.3 Nil Nil

Stock on hand 5.1.4 Nil Nil

Work in progress 5.1.5 Nil Nil

Plant & equipment 5.1.6 Nil Nil

Motor vehicles, Trucks and Trailers 5.1.7 53,000 44,000

Other assets 5.1.8 Nil Nil

Sub total 230,354 202,864

Assets subject to specific charges 5.1.9 1,370,000 1,185,000

Less amounts owing under charges 5.1.9 (1,350,000) (1,350,000)

Total available assets 250,354 202,864

Liabilities:

Less: Priority creditors

- Employee entitlements payable in advance of secured creditors

5.1.11 (1,059,765) (1,059,765)

- Secured creditors 5.1.12 (838,000) (1,658,000)

- Partly secured creditors 5.1.13 Nil Nil

Total priority creditors (1,897,765) (2,717,765)

Contingent assets 5.1.10 Unknown Unknown

Contingent liabilities 5.1.15 Unknown Unknown

Available to unsecured creditors Nil Nil

Ordinary unsecured creditor claims 5.1.14 Unknown (693,740)

Estimated Surplus/(Deficiency) (1,647,411) (2,514,901)


Beechey Storage


Reference


High

$


Low

$

Assets:


Sundry debtors 5.1.2 Nil Nil





Motor vehicles, Trucks and Trailers 5.1.7 Nil Nil


Sub total Nil Nil

Assets subject to specific charges 5.1.9 Nil Nil

Less amounts owing under charges 5.1.9 Nil Nil

Total available assets Nil Nil

Liabilities:


- Employee entitlements payable in advance of secured creditors

5.1.11 Nil Nil

- Secured creditors 5.1.12 Unknown Unknown


Total priority creditors Unknown Unknown

Contingent assets 5.1.10 Nil Nil


Available to unsecured creditors Unknown Nil

Ordinary unsecured creditor claims 5.1.14 Unknown Unknown

Estimated Surplus/(Deficiency) Unknown Unknown


RMB Equipment


Reference


High

$


Low

$

Assets:



Cash at bank and cash on hand 5.1.3 287 287



Plant & equipment 5.1.6 26,000 22,000

Motor vehicles, Trucks and Trailers 5.1.7 794,000 665,000


Sub total 820,287 687,287

Assets subject to specific charges 5.1.9 2,726,000 2,071,000

Less amounts owing under charges 5.1.9 (3,564,000) (3,564,000)

Total available assets 820,287 687,287

Liabilities:


- Employee entitlements payable in Advance of secured creditors

5.1.11 Nil Nil



Total priority creditors (818,000) (1,658,000)




Ordinary unsecured creditor claims 5.1.14 Unknown Unknown

Estimated Surplus/(Deficiency) 2,287 (907,713)


Carriers Brisbane


Reference


High

$


Low

$

Assets:







Motor vehicles, Trucks and Trailers 5.1.7 Nil Nil


Sub total Nil Nil

Assets subject to specific charges 5.1.9 Nil Nil

Less amounts owing under charges 5.1.9 Nil Nil

Total available assets Nil Nil

Liabilities:


- Employee entitlements payable in Advance of secured creditors

5.1.11 Nil Nil



Total priority creditors (818,000) (1,658,000)




Ordinary unsecured creditor claims 5.1.14 Unknown (555,938)

Estimated Surplus/(Deficiency) (818,000) (2,213,938)


I comment on the assets and liabilities as follows:

5.1.1 Interest in land

The Group

Property searches indicate that the entities that make up the Group do not own any real property.

5.1.2 Sundry debtors

5.1.2.1 Trade debtors

Beechey

As outlined in section 4.3 there are a number of debtors listed in Beechey’s balance sheet. The Administrators will make further enquiries to determine the recoverability of these amounts.

As discussed in section 3.1.4, Beechey held an NDF Facility with the NAB with approximately $1.35 million outstanding as at the date of my appointment. The vast majority of the Groups debtors were financed by this facility. The debtors that fall under the NAB’s security are discussed further in section 5.1.9.4.

However, as at the date of my appointment there were a number of invoices that had not been financed by NAB. Further, the Group provided warehousing solutions for a number of clients and I utilised the Group’s staff in order to assist with the removal of the clients stock. The clients were charged handling fees and rental costs as per the Group’s policies and these fees were also invoiced to the clients.

I set out below the detail of debtors that have not been financed by the NAB. As of Friday 13 July 2012 $14,564 of these debtors had been collected. These funds will be available to the administration.

I estimate total debt recoveries as follows:

High ($) Low ($)

Opening debtors’ balance 196,080 196,080

Less Provision for doubtful debt (18,726) (37,452)

Total 177,354 158,628

The provision for the high and low case is 90% and 80% of the debtor balance that has not yet been received.

Beechey Storage

My preliminary investigations did not reveal any trade debtors owed to Beechey Storage.

RMB Equipment

My preliminary investigations did not reveal any trade debtors owed to RMB Equipment.

Carriers Brisbane

My preliminary investigations did not reveal any trade debtors owed to Carriers Brisbane.

5.1.2.2 Intercompany loans

As detailed in Section 4.3 there are a number of intercompany loans included in each of the entities that make up the Groups balance sheet. I have detailed these intercompany loans below.


Beechey

Intercompany debtors

Cost or Net Book Value

$

Administrators’ ERV (high)

$

Administrators’ ERV (low)

$

Beechey Storage 2,404,340 Nil Nil

RMB Equipment 5,366,302 Nil Nil

Total 7,770,642 Nil Nil

Beechey Storage



$


$


$

Beechey 2,869,448 Nil Nil

RMB Equipment



$


$


$

Carriers Brisbane 2,240,904 Nil Nil

Carriers Brisbane



$


$


$

Beechey 7,212,913 Nil Nil

5.1.3 Cash on hand and cash at bank

Beechey

Beechey operated a bank account with NAB for the purpose of the NDF Facility. The account balance was overdrawn in the amount of $1,350,947 and remained open for receipts of debtors financed by the NAB (discussed in section 5.1.9.4).

There were two Beechey further accounts with NAB with balances of $1,512 and $386 at the date of our appointment. These funds have not been forwarded to the Administrators as they are likely able to be seized by NAB in accordance with their Allpaap charge. Our investigations are continuing in this regard.

No cash on hand was identified.

Beechey Storage

On the first day of the Administrators appointment letters were sent to the major banks requesting details of any accounts held by Beechey Storage. I have not been advised of any accounts held in the company’s name.



RMB Equipment

The Company operated a bank account with Macquarie Bank. I placed a debit freeze on the account and deposited proceeds of $287 into a separate administration account under the Administrators’ control.

There was also an account with NAB with a balance of $23,000 at the date of our appointment. These funds have not been forwarded to the Administrators as they are likely able to be seized by NAB in accordance with their Allpaap charge. Our investigations are continuing in this regard.


Carriers Brisbane

On the first day of the Administrators appointment letters were sent to the major banks requesting details of any accounts held by Beechey Storage. I have not been advised of any accounts held in the company’s name.


5.1.4 Stock

The Group

My investigations to date have not revealed any stock.

5.1.5 Work in progress

The Group

My investigations to date have not revealed any work in progress.

5.1.6 Plant and equipment

Beechey

My investigations to date have not revealed any plant and equipment.

Beechey Storage


RMB Equipment

My investigations revealed plant and equipment owned by RMB Equipment valued at $24,000. This equipment has been collected by Grays and will be auctioned.

Carriers Brisbane


5.1.7 Motor Vehicles / Trucks / Trailers

Beechey

My investigations to date have revealed 6 trailers of various make, model and age that were not directly encumbered by a financier valued at $48,500. These trailers have been collected by Grays and will be included as part of a major online event auction.

Beechey Storage

My investigations to date have not revealed any motor vehicles, trucks or trailers.

RMB Equipment

My investigations to date have revealed various trucks, motor vehicles and trailers that were not directly encumbered by a financier valued at $729,500.


Four trucks were sold prior to our appointment for an amount of $166,000 with the purchaser offsetting their credit account with RMB Equipment in the amount of $108,385. The Administrators received net funds of $57,614 from the sale of these trucks. The circumstances surrounding the offsetting of the creditor account warrants further investigation as it may be a preferential payment further discussed in Section 6.3.1.

I have also realised an amount of $26,363 from the sale of three motor vehicles sold on 29 June 2012.

The remaining trucks, motor vehicles and trailers have been collected by Grays and will be included as part of a major online event auction.

Carriers Brisbane

My investigations to date have not revealed any motor vehicles, trucks or trailers.

5.1.8 Other Assets

My investigations to date have not revealed any other assets.

5.1.9 Assets subject to specific charges

Beechey

As discussed in section 3.1.4, Beechey held a NDF Facility with the NAB with approximately $1.35 million outstanding as at the date of my appointment. At the date of appointment Beechey had an outstanding debtor’s ledger balance totalling $1,685,480. Any amounts received under the NAB Debtor Finance facility are solely recoverable by NAB.

An aged analysis follows:

Days 0-30 31-60 61-90 90+ Total

Total ($) 777,666 523,862 173,684 210,268 1,685,480

Percentage of total 46.1% 31.1% 10.3% 12.5% 100.0%

As of Friday 13 July 2012 we have realised $551,335 of outstanding pre-appointment debtors. A preliminary provision of approximately $315,000 has been allocated to bad or doubtful debts although this may change as further investigations are undertaken. This provision has been used for the basis of our high ERV scenario. This provision has been increased to $500,000 under our low ERV scenario.

I estimate further pre-appointment debt recoveries as follows:

High ($) Low ($)

Opening Debtors’ balance 1,685,480 1,685,480

Less: Provision for doubtful debts (315,000) (500,000)

Total 1,370,480 1,185,480

We have been separately engaged by NAB to collect these debtor amounts (discussed further in section 9).

Beechey Storage

My investigations to date have not revealed any assets subject to specific charges.

RMB Equipment

A number of the fixed assets owned by RMB Equipment are subject to fixed charges by various financiers. Due to the commercial sensitivity surrounding the sale of some of these assets, in instances where we think that disclosing the ERV may be prejudicial to the sale of


that asset “Not Disclosed” will appear. The high and low ERV in Section 5.1 is a sum of the disclosed and non-disclosed ERVs of the assets subject to specific charges outlined below.

5.1.9.1 Westpac

Description


$

Administrators’

ERV (low)

$

Prime Mover and Trailers 526,900 431,100

Less: amount owing under charge (397,299) (397,299)

Total 129,601 33,801

Westpac financed one Freightliner prime mover and 10 trailers of various makes, models and age. These assets were dealt with under 5 separate hire purchase agreements with a total amount outstanding under the agreements of $397,299.

We are yet to determine whether there are set off rights between the respective hire purchase agreements. The table above depicts the scenario where there are set off rights between the hire purchase agreements. If set off rights do not exist the low ERV would increase to $66,621.

Westpac have enforced their rights under the various hire purchase agreements and through their agent took possession of the above assets on Friday 29 June 2012. The auction of these items is scheduled for Wednesday 18 July 2012. Westpac are to account to the Administrators on any net proceeds realised from the sale of the assets.

5.1.9.2 Esanda

Description


$

Administrators’

ERV (low)

$

Prime Mover Not Disclosed Not Disclosed


Total Not Disclosed Not Disclosed

Esanda had financed one Freightliner prime mover with a total amount outstanding of $128,993 under the hire purchase agreement.

Esanda enforced their rights under their hire purchase agreement and have taken possession of the above asset. Esanda are to account to the Administrators on any net proceeds realised from the sale of the asset. We have not been advised when this auction is scheduled.

5.1.9.3 Bank of Queensland (“B.Q”)

Description


$

Administrators’

ERV (low)

$

Prime Mover Not Disclosed Not Disclosed


Total Not Disclosed Not Disclosed


B.Q have financed one Western Star prime mover with a total amount outstanding of $114,706 under the hire purchase agreement.

B.Q has provided the Administrators with consent to include this prime mover in the major online event auction sale of RMB Equipment’s unencumbered trucks, trailers and motor vehicles and the NAB financed trucks and trailers. The auction of these items is scheduled to occur on 15 August 2012.

It should be noted that B.Q. may have incorrectly registered their security interest against this prime mover as the VIN on the security agreement and vehicle do not match. This matter needs to be further investigated by the Administrators / Liquidators.

5.1.9.4 National Australia Bank

Description


$


(low)

$

Prime Movers 1,249,000 1,022,000

Rigid Trucks 77,000 63,000

Trailers 710,000 581,000

Motor Vehicles 138,000 113,000

Other PPE 358,000 293,000

Total 2,532,000 2,072,000

Less: amount owing under charge (3,564,000) (3,564,000)

Total (1,032,000) (1,492,000)

NAB have financed 11 trucks, 15 trailers, 4 motor vehicles and other PPE. These assets are dealt with in individual hire purchase agreements and an overarching MAFA. The total amount outstanding under these agreements is $3.56 million. RMB Equipment, Beechey Carriers and Beechey Brisbane have granted security in all of their present and after acquired property to NAB to secure its obligations.

NAB has given the Administrators permission to include these assets in the auction of the other unencumbered trucks, trailers, motor vehicles and equipment of the Group. The auction of these items is scheduled to occur in August 2012.

Carriers Brisbane

My investigations to date do not reveal any assets subject to specific charges.

5.1.10 Contingent assets

5.1.10.1 Landlord claim

Prior to moving to its current premises at Jedda Road, Prestons the Group operated out of premises located in Villawood. The landlord of the Villawood depot (Steve Konstantopoulos and Rosa Konstantopoulos) lodged a Statement of Claim on 27 February 2006 in the District Court in relation to a make good requirement under the lease. This claim was subsequently increased over the threshold whereby the District Court had jurisdiction and as a result the District Court proceedings were transferred to the Supreme Court of New South Wales. Reference: Konstantopoulos v R & M Beechey Carriers Pty Ltd [2010] NSWSC 753 (9 July 2010). Judgement was awarded in favour of the Group on 9 July 2010.


The landlord subsequently appealed and lost by way of a 3-0 decision by the judges of the Supreme Court on 15 December 2011. Reference: Konstantopoulos v R & M Beechey Carriers Pty Ltd [2011] NSWCA 388 (15 December 2011).

Beechey Carriers were awarded judgement for its legal costs plus interest. The principal amount of Beechey Carriers claim exceeds ~$357k. Prior to the appointment of the Administrators the parties were disputing the calculation of interest on the principal amount. These proceedings ran for 6 years at significant cost and disruption to the business.

We have requested the Group’s former legal advisors to furnish us with details surrounding the nature of the Group’s claim and all relevant supporting documentation. Once this has been received we will be able to assess the claim and determine the recovery strategy with respect to same.

5.1.10.2 Dick Smith

The Group had been discussing with Dick Smith the option of moving its two depots at Chullora and Villawood to a new Dick Smith distribution centre located in Hoxton Park, as the Group had been a key logistics supplier to Dick Smith since 2003. Various meetings were held between the Group and representatives of Dick Smith over the course of 2008-2010 with respect to specifications for accommodating the Group at this distribution centre.

Relying on the representations made by Dick Smith the Group set about plans and spent money on capital expenditure, including the purchase of a specialised Omega Container Forklift for the sole purpose of being able to fulfil its obligations to Dick Smith at the proposed distribution centre. The representations made by Dick Smith included:

Discussions in January 2008 surrounding the specifications of the container fork; Discussions in March 2010 surrounding the details of the transport office and

maintenance workshop that was to incorporate the Group at the distribution centre; Acknowledgement in October 2010 surrounding specific aspects of the use of the

container fork on the site; and Weekly team meetings commencing in October 2010 between representatives of the

Group and DSE developing detail for the project.

On 17 December 2010 Dick Smith advised the Group it would not be going into the distribution centre at Hoxton Park. On 6 May 2011 the Group was also told by Dick Smith that its services would no longer be required by Dick Smith from 31 July 2011 at the Villawood depot. It was offered and accepted by the Group that the services of the Group would be utilised at the distribution centre for a period of seven months expiring on 31 March 2012.

It was also during the time when the Group was in discussions with Dick Smith that the Group turned down large distribution opportunities with ResMed and the Arnotts Group. These contracts were turned down by the Group to preserve its relationship with Dick Smith as the acceptance of these new large distribution customers would have seen a large increase in the non-Dick Smith related traffic flow through the proposed Dick Smith distribution centre.

As a result of the above, the Group has made a claim against Dick Smith for an amount totalling approximately $1 million. This represents the purchase price of the Omega Container Forklift and the cost of leasing this piece of equipment.

It may also be argued that the Group has a much larger claim for lost opportunity from any profit it was to derive from the ResMed and Arnotts contract as well as the profit associated with the relocation to the Dick Smith distribution centre and this will be assessed as part of our ongoing investigations.

We have requested the Group’s former legal advisors to furnish us with details surrounding the nature of the Group’s claim against Dick Smith and all relevant supporting documentation. Once this has been received we will be able to assess the claim and determine the recovery strategy with respect to same.


5.1.11 Employee Claims

Beechey

I examined the Group’s employee records and have estimated the priority debts owed to employees. A summary of the outstanding employee entitlements as at the date of our appointment is provided in the table below. I note the following in relation to these outstanding entitlements: PAYG statements were distributed by Beechey Storage and Carriers Brisbane and the

MYOB records reflect payments being made out of these entities. However, all employment contracts that I have been able to locate have been in the name of Beechey. We have therefore included all outstanding employment entitlements under Beechey and this issue is subject to further investigation;

I have at this time not been able to calculate the exact superannuation outstanding to employees due to the Group’s books and records not being properly updated. I will be requesting details from relevant employee superannuation funds in order to accurately determine outstanding employee superannuation entitlements. I have provided an estimate from the available records;

As at the date of our appointment, wages had been paid to 19 June 2012. Wages for the period 20 June 2012 to 21 June 2012 remain unpaid; and

PILN and redundancy liabilities have been calculated for all employees terminated prior to and during the Administration period.

Beechey Total Employee Entitlements

$

Non Priority Excluded Amount

$

Net Priority Entitlements

$

Wages and Expenses 19,366.00 - 19,366.00

Superannuation* 422,460.29 - 422,460.29

Annual Leave 412,103.47 170,941.58 241,161.89

Long Service Leave 80,754.67 29,168.42 51,586.25

Redundancy** 189,135.73 - 189,135.73

PILN** 135,054.85 - 135,054.85

Total 1,258,875.01 200,110.00 1,058,765.01

*An audit of the Groups outstanding superannuation entitlements was undertaken by the ATO for FY10 and FY11. Superannuation is still however likely to change due to unpaid superannuation during FY12 as well as potentially incorrect superannuation payments being made prior to the audit. **Both redundancy and PILN are estimates that are subject to change upon review of individual employee contracts.

Employee claims are afforded priority of repayment over circulating assets pursuant to Section 556(e)(g)(h) and 561 of the Act.

Section 556(2) of the Act provides that “Excluded Employees”, which includes company directors and their spouses, are each restricted to a total maximum priority claim of $2,000 for unpaid wages and superannuation and $1,500 for annual leave entitlements.

Amounts owed to Excluded Employees that exceed the statutory cap for wages and superannuation together with annual leave/long service leave, and all payments owing in respect of retrenchment, being redundancy and payment in lieu of notice, rank for dividend with all other unsecured creditors.

In a liquidation, employees may be entitled to claim their entitlements (other than superannuation) under the Federal Government’s GEERS. Should the Group proceed to


liquidation, there does not appear to be any impediment to employees of the Group making a claim against GEERS, subject to the usual financial limits imposed by the scheme.

Beechey Storage

I examined the Group’s employee records and although PAYG summaries and MYOB files were generated from Beechey Storage employment contracts were signed under Beechey Carriers. I have therefore included employee entitlements under Beechey.

RMB Equipment

My investigations to date have not revealed any employee claims.

Carriers Brisbane

I examined the Group’s employee records and although PAYG summaries and MYOB files were generated from Carriers Brisbane employment contracts were signed under Beechey Carriers. We have therefore included employee entitlements under Beechey Carriers.

5.1.12 Secured Creditors

Beechey, RMB Equipment and Carrier Brisbane

As discussed in Section 3.1.4 the obligations of RMB Equipment under the MAFA and Beechey with respect to the NDF Facility are secured by security in Allpaap of RMB Equipment, Beechey and Carriers Brisbane. The estimated shortfalls can be explained as follows:

High ERV

($)

Low ERV

($)

Shortfall / (Surplus) on Debtor Finance Facility (20,000) 165,000

Shortfall on the MAFA 838,000 1,493,000

Total 818,000 1,658,000

Beechey Storage

Whilst there are two Allpaap registrations to NAB we have not been provided with any evidence that NAB has valid security in Allpaap of Beechey Storage. Further investigations are being undertaken in this regard.

5.1.13 Partly Secured Creditors

The Group

My investigations to date have not identified any partly secured creditors of the Group.

5.1.14 Ordinary unsecured creditors

There are a number of intercompany loans within the Group. For the purposes of the below we have not included these unsecured claims.

Beechey

The books and records of Beechey indicate that unsecured creditors as at 22 June 2012 total $693k in value and 58 in number. This number is subject to increase should further claims be made by the ATO and should other unsecured creditors come forward.

This figure is subject to the receipt and adjudication of final proofs of debt from creditors.


Beechey Storage

The books and records of Beechey Storage indicate only the ATO as a non-intercompany unsecured creditor for $58,331 as at 22 June 2012. This number is subject to increase should further claims be made by the ATO and should other unsecured creditors come forward.


RMB Equipment

The books and records of RMB Equipment indicate that unsecured creditors as at 22 June 2012 total $1 million in value and 5 in number. The Directors have advised that these monies were paid out by another entity in the Group some time ago (discussed further in section 6.2.4). This number is subject to increase should further claims be made by the ATO and should other unsecured creditors come forward.


Carriers Brisbane

The books and records of Beechey indicate that unsecured creditors as at 22 June 2012 total $556k in value and 59 in number. This number is subject to increase should further claims be made by the ATO and should other unsecured creditors come forward.


5.1.15 Contingent liabilities

The Group

All Group entities and the Directors have guaranteed the obligations of RMB Equipment under the hire purchase agreements with Westpac, Bank of Queensland and Esanda. To the extent that the payout value exceeds the amount realised from the sale of assets subject to the agreements there will be a shortfall to these financiers, which will rank as an unsecured claim against Beechey, Carriers Brisbane and Beechey Storage.

5.1.16 Omissions from statement

The Directors’ statements are yet to be provided to this office. We will review and confirm any omissions if necessary at the second meeting of creditors.

5.2 Explanation for current financial position

The Directors’ explanation for the Group’s current financial position includes the following:

Loss of two major clients (Dick Smith and Breville) during FY12; Dick Smith reneging on the Group being incorporated into a proposed Dick Smith

distribution centre. In addition, the costs incurred in financing the purchase of a major specialised item of equipment to undertaken expected work from Dick Smith which was unable to be utilised by the Group;

Competitors undercutting the Group on price; An inability to reduce staff headcount following the loss of major clients; Having to meet contracted lease payments on parts of the fleet that were not being

utilised; and Being unable to obtain additional funding from the NAB.

I generally concur with the Directors’ explanation for the failure of the Group. My additional preliminary view is that the Group failed because of:

Increased competition in the industry; and An inability to quickly rationalise fleet size and the consequence of having to fund

contracted lease payments on parts of the fleet that were not being utilised.


6 Statutory investigations

6.1 Nature and scope of review

The Act requires an administrator to carry out preliminary investigations into a company’s business, property, affairs and financial circumstances.

Investigations centre on transactions entered into by the Group that a liquidator might seek to void or otherwise challenge where the Group is wound up. Investigations allow an administrator to advise creditors what funds might become available to a liquidator such that creditors can properly assess whether to accept a DOCA proposal or resolve to wind up the Group.

Funds recovered would be available to the general body of unsecured creditors including secured creditors but only to the extent of any shortfall incurred after realising their security.

A liquidator may recover funds from each type of transaction detailed in the Creditor Information Sheet described in Annexure H of this report. A deed administrator does not have recourse to these voidable transactions. A liquidator may also recover funds through other avenues; for example, through action seeking compensation for insolvent trading or breach of director duties.

An administrator is not obliged to carry out investigations to the same extent as a liquidator. A liquidator may require many months of investigation and conduct public examinations before forming a concluded view on recovery action.

I investigated matters to the extent possible in the time available. The dividend estimate in a liquidation scenario as set out in section 7.2 of this report reflects the outcome of my investigations.

The Administrators’ knowledge of the Group’s affairs comes principally from the following sources:

Communications with parties who hold security interests regarding the nature and amount of the debt owed. These parties confirmed the information supplied by the Group;

Discussions with the directors and their advisors; An independent valuation of the Group’s property, plant and equipment obtained upon

my instructions; A search of the ASIC records relating to the Group and any related entities; and An examination of the Group’s books and records including its financial statements and

management accounts.

6.2 The Group’s solvency

6.2.1 Overview

A precursor to the recovery of funds by a liquidator through the voiding of certain transactions or through other legal action, such as seeking compensation from directors for insolvent trading, is establishing the Group’s insolvency at the relevant time.

Establishing insolvency is a complex matter due in part to the complexity of corporate financial transactions and the lack of clear prescriptive legal authority on proof of insolvency. Notwithstanding, there are two primary tests used in determining a company’s solvency, at a particular date; namely:

Balance sheet test; and Cash flow or commercial test.

The Courts have widely used the cash flow or commercial test in determining a company’s solvency at a particular date.


Section 95A of the Act also contains a definition of solvency. That definition reflects the commercial test in stating that a person is solvent if “the person is able to pay all the person’s debts as and when they become due and payable”.

However, the commercial test is not the sole determinant of solvency. Determining solvency derives from a proper consideration of a company’s financial position in its entirety and in the context of commercial reality. Relevant issues include, but are not limited to the following:

The degree of illiquidity. A temporary lack of liquidity is not conclusive; Regard should be given to:

o Cash resources

o Monies available through asset realisations, borrowings against the security of assets or equity/capital raising;

Not all of a company’s assets may be relevant when considering solvency. For example, where a company proposes selling assets which are essential to its business operations, the proceeds of those assets should not be taken into account;

The voluntary and temporary forbearance by creditors not to enforce payment terms; and

It is not appropriate to base an assessment of whether a company can meet its liabilities as and when they fall due on the prospect that a company might trade profitably in the future.

In summary, it is a company’s inability using such resources as are available to it through the use of its assets, or otherwise, to meet its debts as they fall due, which indicates insolvency.

6.2.2 Preliminary determination - Beechey

Set out below is a summary of my preliminary investigations and my preliminary determination as to the solvency of Beechey.

Aged Payables Review

The table below sets out an analysis of the aged payables as at various points up to the date of my appointment:

Current

$000’s

30 Days

$000’s

60 Days

$000’s

90+ Days

$000’s

Total

$000’s

Trade payables as at 1 March 2012 623,108 17,972 23,596 29,064 693,740

Percentage of Total 90% 3% 3% 4% 100%

Trade payables as at 1 April 2012 526,387 95,181 19,077 53,095 693,740


Trade payables as at 1 May 2012 466,321 60,067 95,181 72,172 693,740


Trade payables as at 22 June 2012 299,719 137,147 60,768 196,107 693,740


As highlighted above the aged payables position for Beechey has deteriorated significantly from 1 March 2012 with debtors remaining unpaid for 90+ days increasing from 4% to 28% of total creditors up to the date of my appointment.

My investigations to date have revealed that the Directors and the ATO entered into a payment plan for outstanding superannuation and BAS liabilities. Details of the debts are provided in the following table:


Company Type Date Agreement

Approved

Amount

($)

Carriers Brisbane Superannuation 12 May 2012 257,817

Carriers Brisbane Unpaid BAS 12 May 2012 251,392

RMB Equipment Unpaid BAS 29 March 2012 47,872

Beechey Storage Unpaid BAS 18 May 2012 58,331

Total 615,412

The amounts were calculated from an audit undertaken by the ATO on the Group’s FY10 and FY11 accounts. The employment contracts of the Group suggest that the Group’s employees were employed by Beechey as opposed to Carriers Brisbane or any other entity within the Group. For the purpose of my preliminary investigations I have included the outstanding superannuation owed to the ATO as a debt of Beechey. This matter is subject to further investigation.

My investigations to date have not revealed pressure from creditors for payment of outstanding monies owed.

Finance Commitments Review

My preliminary investigations indicate Beechey failed to make a number of payments owing under its NDF Facility.

Profitability, Cash Flow and Working Capital

Whilst the combined P&L in section 4.2 shows the Group achieving a small profit in FY11, the non-payment of employee superannuation entitlements and BAS suggest financial difficulty may have been present as early as FY10.

Beechey did not maintain a cash flow statement. Accordingly, I have not been in a position to review the cash flow statement in order to determine a date of insolvency through this method.

The Directors have advised however the loss of business from Dick Smith (March 2012) and Breville (February 2012) with an annual revenue contribution of approximately $3.5m per annum. This represented approximately 25-30% of the Group’s revenue and would likely have had a significant negative impact on cash flow.

Net Assets

The combined net assets of the Group are detailed in section 4.3 and show a positive net asset position for the Group. However, this position may not be accurate given the difficulty the Group had in meeting its ATO and superannuation liabilities.

A liquidator would be required to undertake further investigations to determine whether liabilities were recorded appropriately during this period.

Payment of statutory commitments including Superannuation Guarantee Charge

Beechey had only been intermittently paying its statutory commitments and had large amounts owing to the ATO in relation to its SGC liabilities.

Sources and Applications of Funds

The Directors of Beechey have advised that they did not have access to any other sources of funding. As detailed in section 3.3, the Directors were in discussions prior to our appointment with the NAB in order to agree a restructuring plan however this was not achieved.

Preliminary Conclusion

Based on the above analysis, it appears as though Beechey may have been insolvent from at least sometime during March 2012. This is due to the following factors:


1. The ageing of the outstanding unsecured creditors;

2. The lack of a cash flow statement to demonstrate its ability to meet its debts as and

when they fell due;

3. The loss of two major customers around that time;

4. The significant amount outstanding to the ATO and the corresponding payment plan;

and

5. The lack of any additional funding being available to Beechey.

A liquidator would need to conduct further investigations, and possibly conduct public examinations of relevant parties, to ultimately determine whether or not Beechey became insolvent at that time or earlier.

6.2.3 Preliminary Determination – Beechey Storage

My preliminary investigations reveal that Beechey Storage was a vehicle used by Beechey to meet employee payments that Beechey was likely liable to pay. Beechey Storage ultimately relied upon funding being provided from Beechey and as such is deemed to have become insolvent as at the same date that Beechey became insolvent.


I am not aware of any financial commitments to secured creditors that Beechey Storage had breached.


Beechey Storage had only been intermittently paying its statutory commitments and had a large amount owing to the ATO in relation to outstanding BAS liabilities (refer section 6.2.1).


Based on the above analysis and section 6.2.1, it appears as though Beechey Storage may have been insolvent from at least March 2012. This is due to the following factors:

1. The lack of a cash flow statement to demonstrate its ability to meet its debts as and

when they fell due;

2. The significant amount outstanding to the ATO and the corresponding payment plan;

and

3. The source of its additional funding being insolvent as at around this time (refer section

6.2.1).

A liquidator would need to conduct further investigations, and possibly conduct public examinations of relevant parties, to ultimately determine whether or not Beechey Storage became insolvent at that time or earlier.

6.2.4 Preliminary Determination – RMB Equipment

RMB Equipment was a vehicle used by Beechey to hold the majority of assets including the trucks and trailers and to pay corresponding lease expenses. RMB Equipment ultimately relied upon funding from Beechey and as such is deemed to have become insolvent as at the same date that Beechey became insolvent.

The table below sets out an analysis of the aged payables as at the date of my appointment:

Current

$000’s

30 Days

$000’s

60 Days

$000’s

90+ Days

$000’s

Total

$000’s

Trade payables as at 22 June 2012 0 0 0 1,023,121 1,023,121


I have discussed this outstanding amount with the Directors who advise that these amounts were paid out of another company within the Group. Further investigations will be required to confirm this claim.



My preliminary investigations indicate RMB Equipment failed to make a number of payments owing under its leased equipment obligations to NAB, Westpac, Esanda and B.Q for a period of up to 6 weeks prior to the date of our appointment.


RMB Equipment had only been intermittently paying its statutory commitments and had a large amount owing to the ATO in relation to outstanding BAS liabilities (refer section 6.2.1).


The Directors of RMB Equipment have advised that the company relied upon Beechey for additional funding when required.


Based on the above analysis, it appears as though RMB Equipment may have been insolvent from at least some time March 2012. This is due to the following factors:

1. The failure to make a number of payments required under its leased equipment

obligations;

2. The lack of a cash flow statement to demonstrate its ability to meet its debts as and when

they fell due;

3. The significant amount outstanding to the ATO and the corresponding payment plan; and

4. The source of its additional funding being insolvent as at around this date (refer section

6.2.1).

A liquidator would need to conduct further investigations, and possibly conduct public examinations of relevant parties, to ultimately determine whether or not RMB Equipment became insolvent at that time or earlier.

6.2.5 Preliminary Determination – Carriers Brisbane

Carriers Brisbane was a vehicle used by Beechey to pay invoices relating to the day-to-day running of the Group. Carriers Brisbane relied upon funding being provided from Beechey and as such is deemed to have become insolvent as at the same date that Beechey became insolvent.

The table below sets out an analysis of the aged payables as at various points up to the date of my appointment:

Current

$000’s

30 Days

$000’s

60 Days

$000’s

90+ Days

$000’s

Total

$000’s

Trade payables as at 1 February 2012 493,417 37,282 10,344 14,895 555,939


Trade payables as at 1 March 2012 449,454 61,502 19,744 29,064 559,764


Trade payables as at 1 April 2012 526,387 95,181 19,077 53,095 693,740


Trade payables as at 1 May 2012 466,321 60,067 95,181 72,172 693,740


Trade payables as at 22 June 2012 295,453 75,215 17,357 167,914 555,939



As highlighted above the aged payables position for Carriers Brisbane has deteriorated significantly from 1 February 2012 with creditors remaining unpaid for 90+ days increasing from 3% to 30% of total creditors up to the date of my appointment.


I am not aware of any financial commitments to secured creditors that Carriers Brisbane had breached.


Carriers Brisbane had only been intermittently paying its statutory commitments and had large amounts owing to the ATO in relation to its SGC liabilities (although further investigations are required to determine whether this is a debt of Beechey) and unpaid BAS liabilities (refer section 6.2.1).


The Directors of Carriers Brisbane have advised that the company relied upon Beechey for additional funding when required.


Based on the above analysis, it appears as though Beechey may have been insolvent from at least March 2012. This is due to the following factors:

1. The ageing of the outstanding unsecured creditors;

2. The lack of a cash flow statement to demonstrate its ability to meet its debts as and when

they fell due;

3. The significant amount outstanding to the ATO and the corresponding payment plan; and

4. The source of its additional funding being insolvent as at this date (refer section 6.2.1).

A liquidator would need to conduct further investigations, and possibly conduct public examinations of relevant parties, to ultimately determine whether or not Carriers Brisbane became insolvent at that time or earlier.

6.2.6 Presumption of insolvency – inadequate books and records

Failure to keep or retain adequate books and records in accordance with Section 286 of the Act provides a rebuttable presumption of insolvency under Section 588E of the Act. A liquidator can rely on the presumption of insolvency in litigation including:

Compensation claims arising from insolvent trading; and Recovery of voidable transactions from related entities.

The presumption cannot be relied upon in the recovery of an unfair preference except where the recovery is sought from a related entity.

My preliminary view is that the entities within the Group maintained adequate books and records in accordance with Section 286. Accordingly, the presumption of insolvency under Section 588E would not be available.

6.3 Potential liquidator recoveries - voidable transactions

6.3.1 Unfair preferences

My preliminary investigations into the Group’s affairs reveal transactions occurred prior to my appointment which could be considered unfair preferences. In particular, I highlight the following:

A payment plan entered into with the ATO; and The sale of four trucks two days prior to my appointment as Administrator.

A liquidator would conduct further investigations into these transactions to determine whether recovery actions are warranted. The transactions detailed above would be protected if the creditor from whom the liquidator seeks to recover:


Became a party to the transaction in good faith; and At the time when they became a party:

o They had no reasonable grounds for suspecting that the Group was insolvent at that time, or would become insolvent; and

o A reasonable person in that person’s circumstances would have had no such grounds for so suspecting; and

Provided valuable consideration under the transaction or has changed their position in reliance on the transaction.

A creditor seeking protection must prove all three elements.

A liquidator would likely seek legal advice on the strength of a claim including the applicability of these defences. It is likely any recovery action commenced by a liquidator would be defended. Therefore, costs are a major consideration.

At this preliminary stage of my investigation I have not yet received a detailed transaction listing showing payments made by the Group in the 6 months leading up to my appointment. Accordingly, I am not yet able to quantify the amounts, if any, paid to creditors in preference. A liquidator would need to investigate this aspect further in order to determine the likelihood of recovery through this avenue.

For the purposes of this report, the estimated potential recoveries from unfair preferences are unknown in the best case and nil in the worst case

6.3.2 Uncommercial transactions

My preliminary investigations do not disclose any transactions of an uncommercial nature which may lead to recoveries by a liquidator in the event that the Group is wound up.

6.3.3 Unfair loans

Based on my investigations to date, the Group was not a party to any unfair loans.

6.3.4 Unreasonable director-related transactions

My preliminary investigations do not reveal any unreasonable director related transactions.

6.3.5 Obstruction of creditors’ rights

My preliminary investigations do not disclose any transactions intended to obstruct creditors’ rights.

6.3.6 Voidable charges

I have not highlighted details of any charges which may be voided by a liquidator.

6.4 Potential liquidator recoveries - insolvent trading

6.4.1 Director liability

Based on my analysis at section 6.2 of this report, I indicated it was probable that the Group may have been insolvent from as early as March 2012, and that the directors would have had reasonable grounds for suspecting so. Based on that analysis, I have formed the preliminary view that the Group traded whilst it was insolvent. In their defence, the directors could argue:

No substantial debts were incurred beyond March 2012; They sought advice from professional advisors on the Group’s position through May and

June 2012 prior to the appointment of administrators; and They had a reasonable expectation that the NAB were likely to provide additional

finance.

Again, a liquidator would likely seek legal advice on these issues and conduct more investigations possibly including a public examination.


The costs of proceeding with an insolvent trading action must be considered as does the personal financial capacity of the directors to pay a judgement obtained against them. The latter issue is addressed in Section 6.7 and indicates that further investigations are required to determine the directors ability to pay any judgement.

6.5 Other potential liquidator recoveries

6.5.1 Compensation for breach of director duties

Based on our preliminary investigations, it would not appear that the Directors have breached any duties in relation to the Group which would give rise to additional recoveries. This would be investigated further by any subsequently appointed liquidator.

6.5.2 Arrangements to avoid employee entitlements

Based on my investigations to date, there has been no contravention of Part 5.8A of the Act by any person.

6.6 Summary of potential liquidator recoveries

Set out below is a summary of the potential recoveries by a liquidator in the event the Group is wound up:

Potential Recovery Item High ($) Low ($)

Unfair preferences Unknown Nil

Uncommercial transactions Nil Nil

Unfair loans Nil Nil

Unreasonable director related transactions Nil Nil

Transactions undertaken to obstruct creditors’ rightrs Nil Nil

Compensation from director for insolvent trading Unknown Nil

Breaches of directors duties Nil Nil

Avoidance of employee entitlements Nil Nil

Total Unknown Nil

6.7 Directors’ ability to pay a liquidator’s claims

My investigations to date have not revealed that the Directors have a directors’ and officers’ insurance policy which would respond to any claims brought by a liquidator.

I have undertaken a land and title search for each of the Directors. The Directors each have a part interest in a separate property with these properties having a mortgage interest noted against them.

Upon assessing the merits of pursuing an insolvent trading claim, the liquidator would consider requesting a more detailed financial position statement be provided by each of the Directors including any equity they may have in the above mentioned properties.

6.8 Report to ASIC

Should further investigations reveal certain offences alleged against the Directors, I am required to report to ASIC pursuant to section 438D of the Act. Should this report be lodged it will not be made available to the public.


7 Creditors’ options, dividend estimates and cost estimates

Pursuant to Section 439A(4)(b) of the Act, I am required to provide creditors with a statement setting out my opinion on whether it is in the creditors’ interests for the:

Administration to end; Group to be wound up; or Group to execute a DOCA.

There is no proposal for a DOCA. Accordingly, creditors have the options of resolving that the administration end or resolving that the Group be wound up.

In forming my opinion, I considered an estimate of the dividend creditors might expect, and the likely costs, under each option.

7.1 Administration to end

Creditors may resolve that the administration should end if it appears the Group is solvent or, for some other reason, control of the Group should revert to its directors.

Based on my preliminary investigations and analysis of the Group’s financial information, the Group is insolvent. There appears to be no valid commercial reason why control of the Group should revert to its directors.

If the administration were to end, there is no mechanism controlling an orderly realisation of assets and distribution to creditors. In those circumstances, I am unable to say what the Group might ultimately pay creditors or what costs it might incur.

Therefore, my opinion is that it is not in the creditors’ interest for the administration to end. It is appropriate that the Group’s affairs be dealt with under Part 5.3A of the Act under the option detailed in Section 7.2 below.

7.2 Winding up of Group

Based upon the information in this report, where the Group is wound up, I estimate a dividend to creditors for each entity as follows:

Beechey

Based upon the information in this report, where Beechey Carriers is wound up, we estimate a dividend to creditors as follows:

($’000) High Low

Assets subject to non-circulating charges

Land, plant & equipment, other 53 44

Factored debtors subject to NAB debtor finance facility 1,370 1,185

Less Realisation costs

Administrators’ fees and disbursements (57) (67)

Liquidators’ fees and disbursements (25) (35)

Closure costs (20) (20)

Net realisations from non-circulating assets 1,321 1,107

Less Secured creditor’s non-circulating claims (4,910) (4,910)


Surplus/(Deficiency) after secured creditor non-circulating charge claims

(3,589) (3,803)

Assets subject to circulating charge

Debtors 177 159

Dick Smith claim Unknown Unknown

Landlord claim Unknown Unknown

Net realisations from circulating charge assets 177 159

Less priority claims




Legal fees (20) (40)

Employee entitlements

Wages / superannuation (167) (167)

Annual leave (241) (241)

Long service leave (52) (52)

Redundancy (189) (189)

Pay in lieu of notice (135) (135)

Total priority claims (1,012) (1,052)

Return to employees Unknown Nil

Net funds available to secured creditor after priority claims 1,321 1,107

Less secured creditor’s claim (4,910) (4,910)

Return to secured creditor 27 cents 23 cents

Total funds available after priority claims and secured creditor claims

Nil Nil

Total voidable transactions and other recoveries (per summary at section 6.6)

Unknown Nil

Litigation and other recovery fees Unknown Nil

Total funds available to ordinary unsecured creditors Unknown Nil

Known unsecured creditor claims 694 694

Estimated dividend to ordinary unsecured creditors Unkown Nil

The above analysis provides a high and low estimate of the realisable value of the assets if the Group were wound up. The high estimate reflects circumstances where there is greater certainty as to realisations. The low estimate reflects the opposite.

Under either scenario, there would be no return to unsecured creditors of any entity within the Group due to:

The limited assets available;


The amount owed to the secured creditor; Extent of employee claims; and Costs of administration/liquidation.

Employees may be entitled to claim their entitlements (other than superannuation) under the Federal Government’s GEERS. Should the Group proceed to liquidation, there does not appear to be any impediment to employees of the Group making a claim against GEERS, subject to the usual financial limits imposed by the scheme.


RMB Equipment Pty Limited

Based upon the information in this report, where RMB Equipment is wound up, we estimate a dividend to creditors as follows:

($’000) High Low

Assets subject to non-circulating charges

Land, plant & equipment, other 3,574 2,790

Less Realisation costs




Auctioneers costs (101) (82)

Marketing and removal costs (41) (41)

Net realisations from non-circulating assets 3,282 2,487

Less Secured creditor’s non-circulating claim (4,910) (4,910)

Surplus/(Deficiency) after secured creditor non-circulating charge claims

(1,628) (2,423)

Assets subject to circulating charge Nil Nil

Less priority claims

Employee entitlements Nil Nil

Total priority claims Nil Nil

Net funds available to secured creditor after priority claims 3,282 2,487

Less Secured creditor’s claim (4,910) (4,910)

Return to secured creditor 67 cents 51 cents

Total funds available after priority claims and secured creditor claims

Nil Nil

Total voidable transactions and other recoveries (per summary at section 6.6)

Unknown Nil

Litigation and other recovery fees Unknown Nil

Total funds available to ordinary unsecured creditors Unknown Nil

Known unsecured creditor claims 1,023 1,023

Estimated dividend to ordinary unsecured creditors Unkown Nil

The above analysis provides a high and low estimate of the realisable value of the assets if the Group were wound up. The high estimate reflects circumstances where there is greater certainty as to realisations. The low estimate reflects the opposite.

Under either scenario, there would be no return to unsecured creditors of any entity within the Group due to:

The limited assets available; The amount owed to the secured creditor; and


Costs of administration/liquidation.

Beechey Storage and Carriers Brisbane

I have not identified any assets in either of the above entities as they were purely special purpose vehicles utilised by the Group and as such no dividend is estimated to be paid to either secured or unsecured creditors.

8 Administrators’ opinion

As stated in section 7.1 above, the option of the administration ending is clearly not viable. The only remaining option available to creditors is to wind up the Group.

9 Administrators’ remuneration report

Pursuant to Section 446E of the Act, I enclose as Annexure D, Annexure E, Annexure F and Annexure G the Administrators’ remuneration report for the Group. At the second meeting of creditors, I intend seeking approval of the remuneration set out in the remuneration report. Details of disbursements incurred are also included in the remuneration report.

I note that we have been separately engaged by the NAB to collect debtor amounts owing under NAB’s debtor finance facility. I have included the fees and disbursements incurred in collecting these debtors as a separate tab in the Beechey remuneration report (Annexure D).

10 Further queries

I will advise creditors in writing, if practicable, of any additional matter that comes to my attention after the dispatch of this report that, in my view, is material to creditors’ deliberations.

In the meantime, should creditors have any queries, please do not hesitate to contact Doug Moore of my office on (02) 9286 9839.

DATED this 18th day of July 2012.

Ryan Eagle

Administrator

439a report master.docx B09:83896 18 July 2012

Annexure

A Notice of Meeting of Creditors

B09:Notice of Appointment and First Meeting of Creditors

FORM 529

CORPORATIONS ACT 2001

Subregulation 5.6.12(2)

BEECHEY CARRIERS PTY LIMITED ACN 082 807 314

R & M BEECHEY STORAGE PTY LIMITED ACN 082 808 857

RMB EQUIPMENT PTY LIMITED ACN 109 335 195

BEECHEY CARRIERS BRISBANE PTY LIMITED ACN 109 645 070

(ALL ADMINISTRATORS APPOINTED) (“THE COMPANIES”)

NOTICE OF CONCURRENT MEETINGS OF CREDITORS

NOTICE is given that concurrent meetings of the creditors of the Companies will be held at the

offices of Ferrier Hodgson, Level 13, 225 George Street, SYDNEY NSW on Friday 27 July

2012 at 11:00am.

AGENDA

1. To consider statements by the directors about the Companies’ business, property,

affairs and financial circumstances.

2. To consider the circumstances leading up to the administrations and the various

options available to creditors.

3. To determine the remuneration of the Voluntary Administrators.

4. For creditors to resolve upon one of the following:

That the administrations should end; or

That the Companies be wound up.

5. If the Companies are wound up, to consider the appointment of Committees of

Inspection.

6. If the Companies are wound up, to fix the remuneration of the Liquidators.

7. Any other business that may be lawfully brought forward.

Proxies to be used at the meeting should be lodged at the office of the Administrators by

4.00pm on the day prior to the meeting. A corporation may only be represented by proxy

or by an attorney appointed pursuant to Corporations Regulations 5.6.28 and 5.6.31

respectively or, by a representative appointed under Section 250D of the Corporations

Act 2001.

In accordance with Regulation 5.6.23(1) of the Corporations Regulations, creditors will not be

entitled to vote at the meeting unless they have previously lodged particulars of their claims

against the Companies with the Administrators.

DATED this 18th day of July 2012

Ryan Eagle

Administrator


Annexure

B Informal Claim Form for Voting Purposes

G:\Beechey Carriers 6980\B09 Unsecured Creditors (General)\s439A Report\Meeting notices\POD BC.docx A1:BW:Beechey

INFORMAL PROOF OF DEBT FORM

Regulation 5.6.47


(ADMINISTRATORS APPOINTED) (“THE COMPANY”)

Name of creditor:

Amount of debt claimed: (see note)

Consideration for debt:

Whether debt secured or unsecured:

If secured, give details of security including dates, etc:

Balance, if any, after deducting value of security (see note):

.............................................................................

Creditor (or person authorised by creditor)

NOTE:

Under the Corporations Regulations, a creditor is not entitled to vote at a meeting unless (Regulation 5.6.23):

a. his claim has been admitted, wholly or in part, by the Administrator; or

b. he has lodged with the Administrator particulars of the debt or claim, or if required, a formal proof of debt.

For the purposes of Part 5.3A, a secured creditor may vote (Regulation 5.6.24):

a. for the whole of his debt without regard to the estimated value of his security.

Proxies must be made available to the Administrator

G:\Beechey Carriers 6980\B09 Unsecured Creditors (General)\s439A Report\Meeting notices\POD RMB.docx A1:BW:Beechey


Regulation 5.6.47



Name of creditor:






.............................................................................


NOTE:







G:\Beechey Carriers 6980\B09 Unsecured Creditors (General)\s439A Report\Meeting notices\POD R&M.docx A1:BW:Beechey


Regulation 5.6.47



Name of creditor:






.............................................................................


NOTE:







G:\Beechey Carriers 6980\B09 Unsecured Creditors (General)\s439A Report\Meeting notices\POD BCB.docx A1:BW:Beechey


Regulation 5.6.47



Name of creditor:






.............................................................................


NOTE:








Annexure

C Appointment of Proxy Form

2nd BC meeting proxy.docx C- :PS:Beechey Carriers 6980

FORM 532


Regulation 5.6.29

APPOINTMENT OF PROXY

CREDITORS MEETING


(ADMINISTRATORS APPOINTED)

*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Beechey Carriers Pty Limited, appoint2 ...................................................................................................................

or in his absence as .....................................................................................................................................................................

*My/our *(i) general OR *(ii) special proxy3 to vote at the meeting of creditors to be held on 27 July 2012, or at any

adjournment of that meeting, to vote

(i) on all matters arising at the meeting; OR

(ii) on each of the following kinds of resolution in the manner specified:

For Against Abstain

(a) A resolution that the company be wound up; or

(b) A resolution that the Administration end.

(c) A resolution that the remuneration of the Administrators, as set out in the

Administrators’ remuneration report dated 18 July 2012 for the period 22

June 2012 to 18 July 2012 be fixed and paid in the sum of $129,626.50

plus any applicable GST.

(d) A resolution that the remuneration of the Administrators, as set out in the

Administrators’ remuneration report dated 18 July 2012 for the period

from 19 July 2012 to the end of the administration period being 27 July

2012, be fixed and paid to a maximum amount of $20,000, plus any

applicable GST.

(e) A resolution that the remuneration of the Liquidators, as set out in the


from 28 July 2012 to the conclusion of the liquidation be approved up to

the sum of $150,000 plus any applicable GST but subject to upward

revision by resolution of creditors, and that the Liquidators be authorised

to make periodic payments on account of such accruing remuneration.

(f) A resolution that a Committee of Inspection be appointed.

(g) A resolution that creditors authorise the Liquidators under Section

477(2A) of the Corporations Act 2001, to compromise a debt owed to the

company of any amount.

(h) A resolution that the books and records of the company be disposed of

12 months after the dissolution of the company or earlier at the discretion

of the ASIC.

I am an unsecured creditor and the total amount owed to me is $

OR

I am a secured creditor and the total amount owed to me is $

* Strike out if inapplicable 1 If a firm, strike out “I” and set out the full name of the firm.

2 Insert the name, address and description of the person appointed.

3 If a special proxy add the words "to vote for" or the words "to vote against" and specify the particular resolution.

2nd BC meeting proxy.docx C- :PS:Beechey Carriers 6980

DATED this day of 20

...................................................................... OR The Common Seal of4

Signature5 of individual or person

6

authorised by corporate resolution to was hereunto affixed in the

represent the corporation presence of

.............................................................

Director

.............................................................

Secretary

CERTIFICATE OF WITNESS7

I, ..................................................................................... of ..........................................................................................................

certify that the above instrument appointing a proxy was completed by us in the presence of and at the request of the

person appointing the proxy and read to him before he attached his signature or mark to the instrument.


............................................................................

Signature of Witness

............................................................................

Description

............................................................................

............................................................................

Place of Residence

4 The method of affixing the Common Seal is prescribed in Section 127(2) of the Corporations Act 2001 and, usually, the creditor

corporation’s constitution. 5 The signature of the creditor is not to be attested by the person nominated as proxy.

6 A corporation may only be represented by proxy or by an attorney appointed pursuant to Corporations Regulations 5.6.28 and

5.6.31A respectively or, by a representative appointed under Section 250D of the Corporations Act 2001. Copy of authority/power

of attorney to be annexed. 7 This certificate is to be completed only where the person giving it is blind.

2nd RMB meeting proxy.docx C- :PS:Beechey Carriers 6980

FORM 532


Regulation 5.6.29


CREDITORS MEETING



*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of RMB Equipment Pty Limited, appoint2 .....................................................................................................................






For Against Abstain











applicable GST.




the sum of $50,000 plus any applicable GST but subject to upward

revision by resolution of creditors, and that the Liquidators be authorised

to make periodic payments on account of such accruing remuneration.







of the ASIC.


OR





2nd RMB meeting proxy.docx C- :PS:Beechey Carriers 6980




6



.............................................................

Director

.............................................................

Secretary


I, ..................................................................................... of ..........................................................................................................




............................................................................


............................................................................

Description

............................................................................

............................................................................

Place of Residence






2nd R&M meeting proxy.docx C- :PS:Beechey Carriers 6980

FORM 532


Regulation 5.6.29


CREDITORS MEETING



*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of R & M Beechey Storage Pty Limited, appoint2 ........................................................................................................






For Against Abstain











applicable GST.




the sum of $5,000 plus any applicable GST but subject to upward revision

by resolution of creditors, and that the Liquidators be authorised to make

periodic payments on account of such accruing remuneration.







of the ASIC.


OR





2nd R&M meeting proxy.docx C- :PS:Beechey Carriers 6980




6



.............................................................

Director

.............................................................

Secretary


I, ..................................................................................... of ..........................................................................................................




............................................................................


............................................................................

Description

............................................................................

............................................................................

Place of Residence






2nd BCB meeting proxy.docx C- :PS:Beechey Carriers 6980

FORM 532


Regulation 5.6.29


CREDITORS MEETING



*I/*We1 .................................................................................................................................................................

of .................................................................................................................................................................

a creditor of Beechey Carriers Brisbane Pty Limited, appoint2 ....................................................................................................






For Against Abstain











applicable GST.




the sum of $5,000 plus any applicable GST but subject to upward revision

by resolution of creditors, and that the Liquidators be authorised to make

periodic payments on account of such accruing remuneration.







of the ASIC.


OR





2nd BCB meeting proxy.docx C- :PS:Beechey Carriers 6980




6



.............................................................

Director

.............................................................

Secretary


I, ..................................................................................... of ..........................................................................................................




............................................................................


............................................................................

Description

............................................................................

............................................................................

Place of Residence







Annexure

D Beechey Administrator’s Remuneration Report

beechey va - remuneration report.docx 84356:B14

Corporations Act 2001

Section 449E BEECHEY CARRIERS PTY LIMITED (ADMINISTRATORS APPOINTED) (“THE COMPANY”) ACN 082 807 314

Remuneration Report

We, Ryan Reginald Eagle and Morgan John Kelly, have undertaken a proper assessment of this remuneration claim for our appointment as Voluntary Administrators of the Company in accordance with the law and applicable professional standards. We are satisfied that the remuneration claimed is in respect of necessary work, properly performed in the conduct of the administration. Our Remuneration Report, prepared pursuant to Section 449E of the Corporations Act 2001, takes the following format: Part A

A1 Schedule of hourly rates and general guide to staff experience A2 Tasks undertaken by the Administrators and remuneration calculation for the period 22

June 2012 to 18 July 2012 A3 Anticipated tasks and Administrators’ estimated prospective remuneration for the

period 19 July 2012 to 27 July 2012 A4 Where Liquidators are appointed, a schedule of the Liquidators’ anticipated tasks and

remuneration estimate from 28 July 2012 to the conclusion of the liquidation A5 Tasks undertaken by the Administrators and remuneration calculation for the period 22

June 2012 to 18 July 2012 in realising NAB debtors A6 Remuneration approved and drawn to date A7 Resolutions to be put to creditors at the meeting convened for 27 July 2012 Part B

B1 Administrators’ disbursements B2 Summary of receipts and payments for the period 22 June 2012 to 13 July 2012 B3 Other creditor information on remuneration The Remuneration Report must be read in conjunction with the report to creditors dated 18 July 2012.

Remuneration Report 18 July 2012

Page 2


Part A

A1 Schedule of hourly rates and general guide to staff experience

Title Rate

($/hour)

Experience

Partner / Appointee

550 The Partner / Appointee is a registered liquidator and member of the ICAA and, generally, the IPA, bringing specialist skills to the administration or insolvency task. For specific experience and other details of the appointee/s, please visit our website at www.ferrierhodgson.com.

Director 460 Generally, minimum of 12 years’ experience at least 2 years of which is to be at Manager level. University degree; member of the ICAA and, generally, the IPA, with deep knowledge and lengthy experience in relevant insolvency legislation and issues.

Senior Manager 410 Generally, more than 7 years’ experience with at least 2 years as a Manager. University degree; member of the ICAA and, generally, the IPA; very strong knowledge of relevant insolvency legislation and issues.

Manager 340 Generally, 5 to 7 years’ chartered accounting or insolvency management experience. University degree; member of the ICAA and, generally, the IPA; sound knowledge of relevant insolvency legislation and issues.

Assistant Manager

290 Generally, 4 to 6 years’ chartered accounting or insolvency management experience. University degree; member of the ICAA; completing IPA Insolvency Education Program. Good knowledge of relevant insolvency legislation and issues.

Senior Analyst 260 Generally, 2 to 4 years’ chartered accounting or insolvency management experience. University degree; completing the ICAA’s CA program. Good knowledge of basic insolvency legislation and issues.

Analyst 230 Generally, 2 to 3 years’ chartered accounting or insolvency management experience. University degree, ICAA’s CA program commenced.

Accountant 205 0 to 2 years’ experience. Has completed or substantially completed a degree in finance/accounting. Under supervision, takes direction from senior staff in completing administrative tasks.

http://www.ferrierhodgson.com.au/


Page 3


Title Rate

($/hour)

Experience

Junior Accountant

135 0 to 1 year’s experience. Undertaking a degree part-time in finance/accounting. Under supervision, takes direction from senior staff in completing more administrative tasks.

Senior Secretary 165 Appropriate skills including machine usage.

Computer Operator

110 Appropriate skills including machine usage.

Clerk 135 Generally non qualified administrative assistant. Classification depends on experience, salary and complexity of work to be completed.

Typist 88 Appropriate skills including machine usage.

Office Assistant 60 Completed schooling and plans to undertake further studies. Required to assist in administration and day to day field work under the supervision of more senior staff.

Notes:

1. The hourly rates are exclusive of GST.

2. The guide to staff experience is intended only as a general guide to the qualifications and experience of staff engaged in the administration. Staff may be engaged under a classification considered appropriate for their experience.

3. Time is recorded and charged in six-minute increments.

4. Rates are subject to change from time to time. The hourly rates reflect the total cost of providing professional services and should not be compared to an hourly rate. See Part B1 for details of disbursements.


Page 4


A2 Tasks undertaken by the Administrators and remuneration calculation for the period 22 June 2012 to 18 July 2012

Task Area General Description Includes

Assets

98.8 hours $27,468.50 (excl GST)

Plant and equipment Liaising with valuers, auctioneers and interested parties

Reviewing asset listings

Reviewing claims against assets

PPSR searches

Collection of assets

Investigations into assets

Debtors Correspondence with debtors

Reconciliation of debtors

Discussions with debtors

Invoicing debtors

Reviewing and assessing debtors ledgers

Stock Conducting stock takes

Reviewing stock values

Liaising with purchasers

Leasing Reviewing leasing documents

Liaising with owners / lessors

Tasks associated with disclaiming leases

Creditors

65.6 hours $20,676.50 (excl GST)

Creditor enquiries Receive and follow up creditor enquiries via telephone and email

Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Retention of title claims Reviewing initial notification of creditors’ intention to claim

Provision of retention of title claim form to creditors

Reviewing completed retention of title claim form

Maintain retention of title file

Meeting claimant on site to identify goods

Adjudicate retention of title claims

Forward correspondence to claimants notifying outcome of adjudication

Preparation of payment vouchers to satisfy valid claims

Preparation of correspondence to claimants to accompany payment of claim (if valid)

Secured creditor reporting Preparing reports to secured creditor

Responding to secured creditor’s queries

Creditor reports/circulars Preparing circular to creditors


Page 5



Preparing s439A report

Dealing with proofs of debt Reviewing proofs of debts

Corresponding with OSR and ATO regarding proofs of debt

Meeting of creditors Preparation meeting notices, proxies and advertisements

Forward notice of meeting to all known creditors

Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting.

Preparation and lodgement minutes of meetings with ASIC

Respond to stakeholder queries and questions immediately following meeting

Employees

89.70 hours $24,423.00 (excl GST)

Employee enquiries

Receive and follow up employee enquiries via telephone


Preparation of letters to employees advising of their entitlements and options available

Calculation of entitlements Calculating employee entitlements

Reviewing employee files and Company’s books and records

Reconciling superannuation accounts

Reviewing awards

Trade On / Orderly Close

Down

33.90 hours $12,149.00 (excl GST)

Trade on management Liaising with suppliers

Liaising with management and staff

Attendance on site

Authorising purchase orders

Maintaining purchase order registry

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Processing receipts and payments Entering receipt and payments into

accounting system

Budgeting and financial reporting Reviewing Company’s budgets and financial statements

Preparing cash flow forecasts

Preparing weekly financial reports


Page 6



Investigation

5.00 hours $1,197.50 (excl GST)

Conducting investigation Collection of Company books and records

Reviewing Company’s books and records

Review and preparation of Company nature and history

Conducting and summarising statutory searches

Conducting investigations into Company’s affairs

Preparation of comparative financial statements

Preparation of deficiency statement

Review of specific transactions and liaising with directors regarding certain transactions

Liaising with directors regarding certain transactions

Preparation of investigation file

Litigation / recoveries Internal meetings to discuss status of litigation

Liaising with solicitors regarding recovery actions

Administration

169.90 hours $43,712.00 (excl GST)

Correspondence General correspondence

Document maintenance / file review / checklist

Filing of documents

File reviews

Updating checklists

Insurance Identification of potential issues requiring attention of insurance specialists

Correspondence with Finn Foster APB regarding initial and ongoing insurance requirements

Reviewing insurance policies

Bank account administration Preparing correspondence opening and closing accounts

Requesting bank statements

Bank account reconciliations

ASIC Form 524 and other forms Preparing and lodging ASIC forms including 505, 524, 911, etc

Correspondence with ASIC

Planning / review Discussions regarding status / strategy of

administration

Books and records / storage Dealing with records in storage

Sending job files to storage


Page 7


A2 Tasks undertaken by the Administrators and remuneration calculation for the period 22 June 2012 to 18 July 2012 (cont)

Employee Position Rate Total Assets Creditors Employees Trade On Investigation Administration

(ex

GST)

($/Hour) (Hrs) ($) (Hrs) ($) (Hrs) ($) (Hrs) ($) (Hrs) ($) (Hrs) ($) (Hrs) ($)

Kelly, Morgan Partner 550.00

1.90

1,045.00

0.80

440.00

0.50

275.00 - - - - - -

0.60

330.00

Eagle, Ryan Partner 550.00

15.30

8,415.00

4.20

2,310.00

4.90

2,695.00

1.00

550.00 - - - -

5.20

2,860.00

Hansell, Joseph Director 460.00

32.20

14,812.00

4.80

2,208.00

10.50

4,830.00

3.20

1,472.00

9.10

4,186.00

0.20

92.00

4.40

2,024.00

Morgan, Craig Senior Manager 410.00

5.50

2,255.00

1.50

615.00

0.50

205.00 - -

3.50

1,435.00 - - -

Bond, Daniel Senior Manager 410.00

8.30

3,403.00

2.10

861.00

0.50

205.00 - -

3.50

1,435.00 - -

2.20

902.00

Walker, Ben Manager 340.00

55.80

18,972.00

6.70

2,278.00 - -

24.60

8,364.00

6.50

2,210.00 - -

18.00

6,120.00

Waller, Mark Assistant Manager 290.00

19.00

5,510.00

1.00

290.00 - - - - - - - -

18.00

5,220.00

Rogers, Rhys Assistant Manager 290.00

50.20

14,558.00

1.10

319.00

20.70

6,003.00

11.60

3,364.00

1.40

406.00 - -

15.40

4,466.00

Speake, Philip Senior Analyst 260.00

64.60

16,796.00

7.20

1,872.00

15.00

3,900.00

31.00

8,060.00

1.00

260.00 - -

10.40

2,704.00

Miller, Matthew Senior Analyst 260.00

31.30

8,138.00

27.50

7,150.00 - - - - - - - -

3.80

988.00

Johnson, Benjamin Senior 1 260.00

32.40

8,424.00

10.20

2,652.00

0.30

78.00 - -

7.10

1,846.00

3.10

806.00

11.70

3,042.00

Speake, Philip Analyst 230.00

48.90

11,247.00

17.20

3,956.00

7.20

1,656.00

1.50

345.00

1.20

276.00 - -

21.80

5,014.00


Page 8


Petkovic, Michael Analyst

230.00

10.00

2,300.00 - - - - - - - - - -

10.00

2,300.00

Petkovic, Michael Accountant 205.00

5.50

1,127.50 - - - - - - - - - -

5.50

1,127.50

Jarick, Michael Accountant 205.00

16.10

3,300.50

5.70

1,168.50

0.10

20.50 - - - - - -

10.30

2,111.50

Tran, Emmy Accountant 205.00

6.10

1,250.50

2.30

471.50

0.50

102.50 - -

0.20

41.00

1.00

205.00

2.10

430.50

Lynch, Debra Senior Secretary 165.00

1.50

247.50 - -

1.50

247.50 - - - - - - - -

Delaguiado, Astra CP Operator 110.00

1.80

198.00 - - - - - - - - - -

1.80

198.00

Beaumont, Robert Junior Accountant 135.00

56.50

7,627.50

6.50

877.50

3.40

459.00

16.80

2,268.00

0.40

54.00

0.70

94.50

28.70

3,874.50

Total (excluding GST)

462.90

129,626.50

98.80

27,468.50

65.60

20,676.50

89.70

24,423.00

33.90

12,149.00

5.00

1,197.50

169.90

43,712.00

GST

12,962.65

Total (including GST)

142,589.15

Average Hourly Rate

278.02

315.19

272.27

358.38

239.50

257.28


A3 Schedule of anticipated tasks and Administrators’ estimated prospective remuneration for the period 19 July 2012 to 27 July 2012

Based on the following anticipated tasks, I estimate the Administrators’ fees for the above period at between 19 July 2012 and 27 July 2012.


Assets

$5,000 (excl GST)



Assets subject to specific charges All tasks associated with realising a charged asset



Other assets Tasks associated with realising other assets

Creditors

$5,000 (excl GST)





Dealing with proofs of debt Receipting and filing proofs of debt when not related to a dividend

Corresponding with OSR and ATO regarding proofs of debt when not related to a dividend

Meeting of creditors Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting.

Employees

$4,000 (excl GST)

Employee enquiries



Receive and prepare correspondence in response to employees objections to leave entitlements




Reviewing awards

Other employee issues Correspondence with Centrelink


Page 10



Investigation

$2,000 (excl GST)

Conducting investigation Reviewing Company’s books and records




Litigation / recoveries Liaising with solicitors regarding recovery

actions

Administration

$4,000 (excl GST)



Filing of documents

File reviews

Updating checklists

Insurance Correspondence with Finn Foster APB regarding ongoing insurance requirements

Bank account administration Requesting bank statements


Correspondence with bank regarding specific transfers

ASIC Form 524 and other forms Correspondence with ASIC regarding

statutory forms

ATO and other statutory reporting Completing group certificates


administration




Page 11


A4 Schedule of anticipated tasks and Liquidators’ estimated prospective remuneration for the period Date to the conclusion of the liquidation

Based on the following anticipated tasks of the Liquidation, I estimate the Liquidators’ fees at $150,000.


Assets

$25,000 (excl GST)




Assets subject to specific charges All tasks associated with realising a charged

asset



Liaising with debt collectors and solicitors


Creditors

$25,000 (excl GST)


Maintaining creditor enquiry register





Reporting to creditors

Dealing with proofs of debt Receipting and filing proofs of debt when not related to a dividend

Corresponding with OSR and ATO regarding proofs of debt when not related to a dividend

Employees

$30,000 (excl GST)

Employee enquiries


Maintain employee enquiry register


Preparation of letters to employees advising of their entitlements and options available

Receive and prepare correspondence in response to employees objections to leave


Page 12



entitlements

GEERS Correspondence with GEERS

Discussions with GEERS




Reviewing awards

Liaising with solicitors regarding entitlements

Employee dividend Correspondence with employees regarding dividend

Correspondence with ATO regarding SGC proof of debt

Calculating dividend rate

Preparing dividend file

Advertising dividend notice

Preparing distribution

Receipting proofs of debt

Adjudicating proofs of debt

Ensuring PAYG is remitted to ATO

Other employee issues Correspondence with Centrelink

Investigation

$50,000 (excl GST)

Conducting investigation Conducting investigation pursuant to s533 of the Act and reporting to ASIC with respect to same





Litigation / recoveries Internal meetings to discuss status of litigation

Preparing brief to solicitors

Liaising with solicitors regarding recovery actions

Attending to negotiations

Attending to settlement matters

ASIC reporting Preparing statutory investigation reports

Liaising with ASIC

Administration

$20,000 (excl GST)

Processing receipts and payments Entering receipt and payments into accounting system



First month, then six monthly administration


Page 13



review

Filing of documents

File reviews

Updating checklists

Budgeting and financial reporting Preparing weekly financial reports


Correspondence with Finn Foster APB regarding ongoing insurance requirements






Correspondence with ASIC regarding statutory forms

ATO and other statutory reporting Preparing BAS’

Completing group certificates

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST / PAYG registration

Completing checklists

Finalising WIP


liquidation




Page 14


The remuneration estimate may be summarised as follows:

Assets Creditors Employees Investigation Administration

Hours 83 83 100 166 66 Amount $25,000 $25,000 $30,000 $50,000 $20,000

Please note that the above is an estimate only. If costs exceed the estimate, creditors will be advised accordingly and further approval will be sought. A5 Tasks undertaken by the Administrators realising the NAB debtors and

remuneration calculation for the period 22 June 2012 to 18 July 2012


Assets

48.60 hours $14,155.00 (excl GST)



Liaising with debt collectors and solicitors


Creditors

6.10 hours $1,111.00 (excl GST)




Administration

18.20 hours $5,342.00 (excl GST)

Processing receipts and payments Entering receipt and payments into accounting system



Filing of documents

File reviews

Budgeting and financial reporting Preparing weekly financial reports






administration




Page 15


A6 Remuneration approved and drawn to date

Creditors have not previously approved any remuneration of the Administrator. A7 Resolutions to be put to creditors at the meeting convened for 27 July 2012

At the meeting of creditors convened for 27 July 2012, creditors will be asked to consider the following resolutions:

"That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 18 July 2012 for the period 22 June 2012 to 18 July 2012 be fixed and paid in the sum of $129,626.50 plus any applicable GST.” “That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated being 18 July 2012 for the period from 19 July 2012 to the end of the administration period being 27 July 2012, be fixed and paid to a maximum amount of $20,000, plus any applicable GST" "That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 18 July 2012 for the period from 28 July 2012 to the conclusion of the liquidation be approved up to the sum of $150,000 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration."


Page 16


Part B

B1 Administrators’ disbursements

Disbursements are divided into three types: D1, D2 and D3. D1 Disbursements are all externally provided professional services and are recovered at

cost. An example of a D1 disbursement is legal fees. D2 Disbursements are externally provided non professional costs such as travel,

accommodation and search fees. D2 disbursements are recovered at cost. D3 Disbursements are internally provided non-professional costs such as photocopying

and document storage. D3 disbursements are charged at cost except for photocopying, printing and telephone calls which are charged at a rate which is intended to recoup both variable and fixed costs. The relevant rates are set out below.

Disbursement Type Charges (excluding GST)

Advertising At cost

Couriers At cost

Mileage Reimbursement $0.67 per kilometre

Photocopying (colour) $0.50 per page

Photocopying (mono) $0.20 per page

Photocopying (outsourced) At cost

Printing (colour) $0.50 per page

Printing (mono) $0.20 per page

Printing (outsourced) At cost

Postage At cost

Searches At cost

Storage and Storage Transit At cost

Telephone Calls At cost

Disbursements incurred to date are shown in the summary of receipts and payments. Creditor approval for the payment of disbursements is not required. However, the Administrators must account to creditors. Creditors have the right to question the incurring of disbursements and can challenge disbursements in court. B2 Summary of receipts and payments for the period 22 June 2012 to 13 July

2012

Attached is a summary of receipts and payments for the period 22 June 2012 to 13 July 2012.

Account Total ($)

Receipts

Trading

Debtor Receipts 14,564

Realisation Cost Funding 25,400

Returned Payroll 136

Trading Receipts 40,100

Non-Trading

BAS Refund 8,821

Non-Trading Receipts 8,821

Total Receipts 48,921

Payments

Trading

Gross Payroll (excl PAYG) (22,258)

Contractor Payments (5,478)

Trading Payments (27,736)

Non-Trading

ASIC Advertising (739)

Non-Trading Payments (739)

Total Payments (28,475)

Total Net Receipts / (Payments) 20,446

Beechey Carriers Pty Limited (Administrators Appointed)

Receipts and Payments for the period 22 June 2012 to 13 July 2012


Page 17


B3 Other information on remuneration

The partners of Ferrier Hodgson are, generally, members of the Insolvency Practitioners Association of Australia (“IPA”). Ferrier Hodgson follows the IPA Code of Professional Practice. A copy of the Code of Professional Practice may be found on the IPA website at www.ipaa.com.au . An information sheet concerning approval of remuneration in external administrations can also be obtained from the IPA website. If you require further information in respect of the above, or have other queries, please contact Doug Moore of this office on 02 9286 9839 prior to the creditors’ meeting. Dated 18th July 2012

Ryan Eagle Administrator

http://www.ipaa.com.au/


Annexure

E Beechey Storage Administrator’s Remuneration Report

r&m va - remuneration report.docx 84356:B14


Section 449E R & M BEECHEY STORAGE PTY LIMITED (ADMINISTRATORS APPOINTED) (“THE COMPANY”) ACN 082 808 857

Remuneration Report





remuneration estimate from 28 July 2012 to the conclusion of the liquidation A5 Remuneration approved and drawn to date A6 Resolutions to be put to creditors at the meeting convened for 27 July 2012 Part B



Page 2


Part A


Title Rate

($/hour)

Experience

Partner / Appointee





Assistant Manager







Page 3


Title Rate

($/hour)

Experience

Junior Accountant



Computer Operator





Notes:






Page 4




Assets

0.9 hours $184.00

(excl GST)

Other assets Investigations into the location of assets

Creditors

6.8 hours $2,076 (excl

GST)

Creditor enquiries Review and prepare correspondence to creditors and their representatives via facsimile, email and post











Down

2.5 hours $650.00

(excl GST)



Attendance on site




Administration

5.9 hours $1,096

(excl GST)



Filing of documents

File reviews

Updating checklists




Page 5




Correspondence with previous brokers




ASIC Form 524 and other forms Preparing and lodging ASIC forms including 505, 524,911, etc


ATO and other statutory reporting Notification of appointment

Preparing BAS’



administration




Page 6


A2 Tasks undertaken by the Administrators and remuneration calculation for the period 22 June 2012 to 18 June 2012 (cont)

Employee Position Rate Total Assets Creditors Trade On Administration

(ex GST)

($/Hour) (Hrs) ($) (Hrs) ($) (Hrs) ($) (Hrs) ($) (Hrs) ($)

Hansell, Joseph Director 460.00 1.60 736.00 - - 1.60 736.00 - - - -

Rogers, Rhys Assistant Manager 290.00 2.50 725.00 - - 2.10 609.00 - - 0.40 116.00

Speake, Philip Senior Analyst 260.00 7.40 1,924.00 0.50 130.00 2.50 650.00 2.50 650.00 1.90 494.00

Beaumont, Robert Junior Accountant 135.00 4.60 621.00 0.40 54.00 0.60 81.00 - - 3.60 486.00


16.10 4,006.00 0.90 184.00 6.80 2,076.00 2.50 650.00 5.90 1,096.00

GST

400.60 Total (including GST)

4,406.60

Average Hourly Rate

204.44

305.29

260.00

185.76





Investigation

$500.00 (excl GST)









Administration

$500.00

(excl GST)



Filing of documents

File reviews

Updating checklists

ASIC Form 524 and other forms Correspondence with ASIC regarding statutory forms

Planning / review Discussions regarding status / strategy of administration




Page 8



Based on the following anticipated tasks of the Liquidation, I estimate the Liquidators’ fees at $5,000.00.


Creditors

3 hours $1,000

(excl GST)








Investigation

7 hours $2,000

(excl GST)



Conducting investigation pursuant to s533 of the Act and reporting to ASIC with respect to same





Liaising with ASIC

Administration

7 hours $2,000

(excl GST)



First month, then six monthly administration review

Filing of documents

File reviews

Updating checklists







Page 9










Finalising WIP

Planning / review Discussions regarding status / strategy of liquidation




Creditors Investigation Administration

Hours 3 7 7

Amount $1,000 $2,000 $2,000

Please note that the above is an estimate only. If costs exceed the estimate, creditors will be advised accordingly and further approval will be sought. A5 Remuneration approved and drawn to date

Creditors have not previously approved any remuneration of the Administrator.


Page 10


A6 Resolutions to be put to creditors at the meeting convened for 27 July 2012


"That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 18 July 2012 for the period 22 June 2012 to 18 July 2012 be fixed and paid in the sum of $4,006.00 plus any applicable GST.” “That the remuneration of the Administrators, as set out in the Administrators’ remuneration report dated 18 July 2012 for the period from 19 July 2012 to the end of the administration period being 27 July 2012, be fixed and paid to a maximum amount of $1,000.00, plus any applicable GST" "That the remuneration of the Liquidators, as set out in the Administrators’ remuneration report dated 18 July 2012 for the period from 28 July 2012 to the conclusion of the liquidation be approved up to the sum of $5,000.00 plus any applicable GST but subject to upward revision by resolution of creditors, and that the Liquidators be authorised to make periodic payments on account of such accruing remuneration."


Page 11


Part B







Advertising At cost

Couriers At cost








Postage At cost

Searches At cost




2012

There have been no receipts and payments in the administration to date.


Page 12







Annexure

F RMB Equipment Administrator’s Remuneration Report

rmb va - remuneration report.docx 84356:B14


Section 449E RMB EQUIPMENT PTY LIMITED (ADMINISTRATORS APPOINTED) (“THE COMPANY”) ACN 109 335 195

Remuneration Report








Page 2


Part A


Title Rate

($/hour)

Experience

Partner / Appointee





Assistant Manager







Page 3


Title Rate

($/hour)

Experience

Junior Accountant



Computer Operator





Notes:






Page 4




Assets

127.00 hours $36,185.50 (excl GST)



Reviewing claims against assets

PPSR searches

Collection of assets


Stock Conducting stock takes

Reviewing stock values

Liaising with purchasers



Down

69.60 hours $23,516.00 (excl GST)



Attendance on site

Authorising purchase orders

Maintaining purchase order registry

Preparing and authorising receipt vouchers

Preparing and authorising payment vouchers

Processing receipts and payments Entering receipt and payments into

accounting system




Investigation

11.00 hours $3,241.00 (excl GST)










Conducting investigations into the Company’s affairs


Page 5



Administration

79.10 hours $16,631.50 (excl GST)



Filing of documents

File reviews

Updating checklists











Preparing BAS’



administration




Page 6



Employee Position Rate Total Assets Trade On Investigation Administration

(ex GST)


Eagle, Ryan Partner 550.00 20.00 11,000.00 8.00 4,400.00 8.00 4,400.00 - - 4.00 2,200.00

Kelly, Morgan Partner 550.00 1.50 825.00 0.50 275.00 0.50 275.00 - - 0.50 275.00

Hansell, Joseph Director 460.00 49.00 22,540.00 31.00 14,260.00 17.30 7,958.00 0.30 138.00 0.40 184.00

Rogers, Rhys Assistant Manager 290.00 56.80 16,472.00 23.30 6,757.00 19.90 5,771.00 10.70 3,103.00 2.90 841.00

Sutherland, Ian Senior Analyst 260.00 2.80 728.00 - - - - - - 2.80 728.00

Speake, Philip Senior Analyst 260.00 19.00 4,940.00 2.30 598.00 8.70 2,262.00 - - 8.00 2,080.00

Speake, Philip Analyst 230.00 47.90 11,017.00 16.20 3,726.00 8.40 1,932.00 - - 23.30 5,359.00

Delaguiado, Astra CP Operator 110.00 2.30 253.00 - - - - - - 2.30 253.00

Moore, Doug Junior Accountant 135.00 2.80 378.00 - - 2.80 378.00 - - - -

Crewe-Brown, Ryan Junior Accountant 135.00 42.60 5,751.00 41.90 5,656.50 0.10 13.50 - - 0.60 81.00

Findlay, Alexander Junior Accountant 135.00 3.40 459.00 3.40 459.00 - - - - -

Beaumont, Robert Junior Accountant 135.00 38.60 5,211.00 0.40 54.00 3.90 526.50 - - 34.30 4,630.50


286.70 79,574.00 127.00 36,185.50 69.60 23,516.00 11.00 3,241.00 79.10 16,631.50

GST

7,957.40 Total (including GST)

87,531.40

Average Hourly Rate

285.30

337.87

341.00

210.26





Assets

$8,000.00 (excl GST)



Assets subject to specific charges All tasks associated with realising a charged asset


Creditors

$8,000.00 (excl GST)









Preparation and lodgement minutes of meeting with ASIC


Administration

$4,000.00 (excl GST)



Filing of documents

File reviews

Updating checklists



Bank account administration Requesting bank statements


Page 8









administration




Page 9





Assets

66 hours $20,000

(excl GST)



Assets subject to specific charges All tasks associated with realising a charged

asset


Creditors

33 hours $10,000

(excl GST)







Investigation

33 hours $10,000

(excl GST)







Liaising with ASIC

Administration

33 hours $10,000

(excl GST)




Filing of documents

File reviews

Updating checklists


Correspondence with Finn Foster APB


Page 10



regarding ongoing insurance requirements











Finalising WIP





Assets Creditors Investigation Administration

Hours 66 33 33 33

Amount $20,000 $10,000 $10,000 $10,000




Page 11






Page 12


Part B







Advertising At cost

Couriers At cost








Postage At cost

Searches At cost




2012

Attached is a summary of receipts and payments for the period 22 June 2012 to 13 July 2012.

Account Total ($)

Receipts

Non-Trading

Sale of Plant and Equipment 86,614

Non-Trading Receipts 86,614

Total Receipts 86,614

Payments

Trading

Realisation Costs (25,400)

Fuel Costs (4,960)

Trading Payments (30,360)

Non-Trading

Mail Redirection (588)

Non-Trading Payments (588)

Total Payments (30,948)

Total Net Receipts / (Payments) 55,667

RMB Equipment Pty Limited (Administrators Appointed)

Receipts and Payments for the period 22 June 2012 to 13 July 2012


Page 13







Annexure

G Carriers Brisbane Administrator’s Remuneration Report

brisbane va - remuneration report.docx 84356:B14


Section 449E BEECHEY CARRIERS BRISBANE PTY LIMITED (ADMINISTRATORS APPOINTED) (“THE COMPANY”) ACN 109 645 070

Remuneration Report








Page 2


Part A


Title Rate

($/hour)

Experience

Partner / Appointee





Assistant Manager







Page 3


Title Rate

($/hour)

Experience

Junior Accountant



Computer Operator





Notes:






Page 4




Creditors

8.3 hours $2,340.50 (excl GST)

Creditor enquiries Review and prepare correspondence to creditors and their representatives via facsimile, email and post











Down

0.3 hours $138.00

(excl GST)



Attendance on site




Investigation

1.5 hours $296.00

(excl GST)





Conducting investigations into Company’s affairs




Liaising with directors regarding certain


Page 5



transactions


Administration

4.0 hours $714.00

(excl GST)



Filing of documents

File reviews

Updating checklists








ASIC Form 524 and other forms Preparing and lodging ASIC forms including 505, 524,911, etc



Preparing BAS’



administration




Page 6



Employee Position Rate Total Creditors Trade On Investigation Administration

(ex

GST)


Hansell, Joseph Director 460.00

2.10

966.00

1.60

736.00

0.30

138.00 - -

0.20

92.00

Rogers, Rhys Assistant Manager

290.00

3.00

870.00

2.50

725.00 - -

0.20

58.00

0.30

87.00

Speake, Philip Senior Analyst 260.00

3.50

910.00

2.50

650.00 - -

0.50

130.00

0.50

130.00

Beaumont, Robert Junior Accountant

135.00

5.50

742.50

1.70

229.50 - -

0.80

108.00

3.00

405.00


14.10

3,488.50

8.30

2,340.50

0.30

138.00

1.50

296.00

4.00

714.00

GST

348.85

Total (including GST)

3,837.35

Average Hourly Rate

281.99

460.00

197.33

178.50





Investigation

$500.00 (excl GST)





Administration

$500.00

(excl GST)



Filing of documents

File reviews

Updating checklists

ASIC Form 524 and other forms Correspondence with ASIC regarding statutory forms





Page 8





Creditors

3 hours $1,000

(excl GST)








Investigation

7 hours $2,000

(excl GST)



Conducting investigation pursuant to s533 of the Act and reporting to ASIC with respect to same





Liaising with ASIC

Administration

7 hours $2,000

(excl GST)




Filing of documents

File reviews

Updating checklists



Bank account administration Preparing correspondence closing accounts



Correspondence with bank regarding specific


Page 9



transfers







Finalising WIP

Planning / review Discussions regarding status / strategy of liquidation




Creditors Investigation Administration

Hours 3 7 7

Amount $1,000 $2,000 $2,000




Page 10






Page 11


Part B







Advertising At cost

Couriers At cost








Postage At cost

Searches At cost




2012

There have been no receipts and payments in the administration to date.


Page 12







Annexure

H IPA – Creditor Information Sheet – Offences, Recoverable Transactions and Insolvent Trading

Insolvency Practitioners Association of Australia ABN 28 002 472 362 33 Erskine Street, GPO Box 3921, Sydney NSW 2001 P+61 2 9290 5700 F +61 2 9290 2820 www.ipaa.com.au

Creditor Information Sheet

Offences, Recoverable transactions and Insolvent Trading

Offences A summary of offences that may be identified by the administrator:

180 Failure by officer to exercise a reasonable degree of care and diligence in the exercise of his powers and the discharge of his duties.

181 Failure to act in good faith.

182 Making improper use of position as an officer or employee, to gain, directly or indirectly, an advantage.

183 Making improper use of information acquired by virtue of his position.

184 Reckless or intentional dishonesty in failing to exercise duties in good faith for proper purpose. Use of position or information dishonestly to gain advantage or cause detriment.

206A Contravening an order against taking part in management of a corporation.

206A, B Taking part in management of corporation while being an insolvent under an administration.

206A, B Acting as a director or promoter or taking part in the management of a company within five years after conviction or imprisonment for various offences.

209(3) Dishonest failure to observe requirements on making loans to directors or related companies.

254T Paying dividends except out of profits.

286 Failure to keep proper accounting records.

312 Obstruction of auditor.

314-7 Failure to comply with requirements for financial statement preparation.

437C Performing or exercising a function or power as officer while a company is under administration.

437D(5) Unauthorised dealing with company's property during administration.

438B(4) Failure by directors to assist administrator, deliver records and provide information.

438C(5) Failure to deliver up books and records to administrator.

590 Failure to disclose property, concealed or removed property, concealed a debt due to the company, altered books of the company, fraudulently obtained credit on behalf of the company, material omission from Report as to Affairs or false representation to creditors.

Voidable Transactions

Preferences

A preference is a transaction such as a payment between the company and one or more of its creditors, in which the creditor receiving the payment is preferred over the general body of creditors. The relevant time period is six months before the commencement of the liquidation. The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction.

Where a creditor receives a preferred payment, the payment is voidable as against a liquidator and is liable to be paid back to the liquidator subject to the creditor being able to successfully maintain any of the defences available to the creditor under either the Corporations Act. Uncommercial Transaction

An uncommercial transaction is one that it may be expected that a reasonable person in the company's circumstances would not have entered into having regard to: • the benefit or detriment to the company; • the respective benefits to other parties; and, • any other relevant matter.

To be voidable, an uncommercial transaction must have occurred during the two years before the liquidation. However, if a related entity is a party to the transaction, the time period is four years and if the intention of the transaction is to defeat creditors, the time period is ten years.

Insolvency Practitioners Association of Australia Creditor Information Sheet s439A report (2) Page 2

The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction. Unfair Loan

A loan is unfair if and only if the interest was extortionate when the loan was made or has since become extortionate. There is no time limit on unfair loans – they only have to have been entered into any time on or before the day when the winding up began. Arrangements to avoid employee entitlements

If an employee suffers loss because a person (including a director) enters into an arrangement or transaction to avoid the payment of employee entitlements, the liquidator or the employee may seek to recover compensation from that person. It will only be necessary to satisfy the court that there was a breach on the balance of probabilities. There is no time limit on when the transaction occurred. Unreasonable payments to directors

Liquidators have the power to reclaim "unreasonable payments" made to directors by companies prior to liquidation. The provision relates to transactions made to, on behalf of, or for the benefit of, a director or close associate of a director. To fall within the scope of the section, the transaction must have been unreasonable, and have been entered into during the 4 years leading up to a company's liquidation, regardless of its solvency at the time the transaction occurred. Voidable charges

Certain charges are voidable by a liquidator: • Floating charge created with six months of the liquidation unless it secures a subsequent advance; • Unregistered charges; and • Charges in favour of related parties who attempt to enforce the charge within 6 months of its creation. Insolvent Trading

In the following circumstances, directors may be personally liable for insolvent trading by the company: • a person is a director at the time a company incurs a debt; • the company is insolvent at the time of incurring the debt or becomes insolvent because of incurring the

debt; • at the time the debt was incurred, there were reasonable grounds to suspect that the company was

insolvent; • the director was aware such grounds for suspicion existed; and • a reasonable person in a like position would have been so aware.

The law provides that the liquidator, and in certain circumstances the creditor who suffered the loss, may recover from the director, an amount equal to the loss or damage suffered. Similar provisions exist to pursue holding companies for debts incurred by their subsidiaries.

A defence is available under the law where the director can establish: • there were reasonable grounds to expect that the company was solvent and they actually did so

expect; • they did not take part in management for illness or some other good reason; or, • they took all reasonable steps to prevent the company incurring the debt.

The proceeds of any recovery for insolvent trading by a liquidator are available for distribution to the unsecured creditors before the secured creditors. Important note: This information sheet contains a summary of basic information on the topic. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. This document may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances.

beechey carriers pty limited r&m beechey storage pty limited acn 082...

Documents