McGrathNicol administrator Joe Hayes answered the following questions relating to the current state of the company and what will happen next.
Gift Cards
“The customer creditors are unsecured creditors – that’s the appropriate legal position under the Corporations Act. I understand that customer creditors have a number of other means by which they can be compensated, such as credit card recharges and the like so we are conscious of the issue.”
The Wesley Conference Centre in Sydney was the venue for the first creditors meeting for Dick Smith Holdings.
Six Month Extension Between Creditors Meetings
“We will seek an extension for the convening period [for the next creditors meeting from 28 days] by up to six months following a request from the receivers. We anticipate that it will be a lengthy extension because in businesses of this kind you need to provide the right type of environment for a sale to be completed with this number of stores and lots of leases. I think between then and now more information will become available. “
Staff
“It is business as usual. The receivers are responsible for instructing the staff and all staff are being paid and employed by the receivers. They are an important part of the network as it stands today. I expect we need some more clarity around the sale process before we receive any further clarity around the workers.”
Expressions of Interest
“Far too early to comment on the 45 offers that have been received. It is encouraging that there are so many offers. There is a period of time that has to play out so that it can be assessed and these offers can be made until the end of January.”
Possible causes of collapse
“We have quite a lot of work to do first, so this is a pause point for us and what we need to do is look at all of the circumstances surrounding the failure of the group and inspect all of the documents and records and undertake our own investigations. It’s too early to focus on anything specific, I think. The company grew and in order to grow they acquired debt. One of our roles will be to assess all of the activities of the company and how were incurred and generated and what decisions were made by different groups of people at different times.”
Departure of Nick Abboud
“It is not uncommon in these types of situations under a new authority structure for there to be a different type of leadership.”