Deloitte, the administrators of the collapsed Kleenmaid Group, has just released its 200 page report to creditors, where it outlines the appliances manufacturer has been trading whilst insolvent for at least two years.

Deloitte Partner, John Greig, commented in the report that Kleenmaid has been running at a severe deficiency for quite some time and has indeed been trading whilst insolvent.

“Kleenmaid’s most recent financial statements indicate a significant net asset deficiency in excess of $82 million. This deficiency was evident from June 2007, if not before, at which time the net asset deficiency was approximately $20 million,” he said.

“Our investigations have revealed evidence of Kleenmaid’s cash flow difficulties since at least June 2007 which confirms our initial view expressed at the first meeting of creditors, that the Group could not possibly have such a significant deficiency by reason of events that occurred in the weeks preceding our appointment as administrators.”

Greig further revealed that Andrew and Bradley Young may be held personally liable for the company’s debt.

“If it can be proven that the directors have breached their duty to prevent the Kleenmaid Group from continuing to trade whilst insolvent, they may be held to be personally liable for the unpaid debts of the Kleenmaid Group,” he said.

“However, our investigations are only preliminary at this stage and we are not in a position to form a view regarding the likely recovery by liquidators for a claim for insolvent trading as this would require further investigation if appointed by creditors at the forthcoming meeting.”

According to the report net cash flow for the company was negative in every month since June 2007, and multiple insolvent transactions have been identified throughout administration.

Some of the transactions types discovered include: unfair preferences, uncommercial transactions, discharging a debt of a related entity, damages for breaches of director’s duties, unreasonable director-related transactions and insolvent trading by directors.