Further details surrounding the group’s affairs have been unearthed in documents from a recent Supreme Court hearing, where administrators to the company successfully pushed for a nine month extension to convene a second meeting of creditors.
The extension would allow Colorado receiver and manager Ferrier Hodgson more time to find a suitable buyer for the business, with documents revealing 60 confidential expressions of interest had already been put forward in the first round of offers to April 19, 2011.
While the main liabilities of Colorado Group were secured debts totalling approximately $440 million, the documents also revealed $28 million worth of debt burdens to unsecured creditors and employee entitlements of around $8.3 million.
Administrator Sal Algeri said trade suppliers, who comprised a large part of the unsecured debt, were continuing to supply the group under the condition they would only receive payments for new debts incurred in the course of the receivership.
Algeri said an extension of time on the second creditors meeting would give receivers the opportunity to complete the sales process, ensuring the company was not wound up and suppliers would maintain this “important” cash flow.
It was revealed suppliers were being paid some $12 million per month for new stock and employees approximately $5.3 million in monthly salaries.
Assets and liabilities of the group were also disclosed at the hearing, with inventory valued at $69.3 million; good will and brand names at $29.9 million; property and plant equipment at $15.9 million; cash of $9.9 million; and debtors at $11.2 million.
Administrators deposed from initial investigations that while Colorado Group was profitable at certain periods, its cash flow was insufficient to meet its interest commitments and principal repayments to senior lenders.
The group operates retail and wholesale businesses in Australia and New Zealand, with five main apparel and footwear brands under Colorado, Diana Ferrari, Jag, Mathers and Williams. It operated 428 stores and employed 3,477 employees, of which around 1200 were permanent full-time.
Assia Benmedjdoub