Oroton's proposed Deed of Company Arrangement (DOCA) with Manderrah will go before the Supreme Court of New South Wales on July 27 according to a circular released by administrators.
As part of the DOCA, Manderrah will pay $5.25 million to the administrators to form part of a creditors' trust deed fund to pay the claims of eligible creditors.
Administrators also released an independent expert report undertaken by KPMG which analysed the assets and equity of the company with analysts concluding that Oroton's equity has nil value.
The report highlighted the challenging retail environment and a number of domestic and international competitors who have moved into the market share of Oroton as reasons behind the grim evaluation.
“In forming our opinion as to the value of OrotonGroup's operating business, it is important to recognise that it operates in a challenging retail environment.
“The retail category on which the Oroton brand is mainly focused has attracted a large number of domestic and international market participants in direct competition with OrotonGroup.
“These competitors frequently offer substantial discounts in order to gain market share, which places pressure on Oroton brand sales and gross margins.
“Furthermore, whilst historically these competitors have focused on retail and concession stores, within the last two to three years, they have moved into factory outlets where OrotonGroup derives a majority of earnings.”