BDO Partners Stephen Dixon and Laurence Fitzgerald were appointed joint and several administrators on September 1, following the company’s poor sales and rising debt. At the second meeting of creditors on October 6, the fashion chain was put into liquidation and assets consisting of inventory, fixtures, fittings and lease obligations for nine Satch-branded stores, were sold to parties ‘related’ to the founder and director, Jim Sachinidis.
In a report of the minutes from the second meeting, recently obtained by Ragtrader, Dixon revealed that bank debts had not been satisfied and breaches of the Corporation Act had been identified.
Leftover store stock has been sold to the new owners, JS Clothing Pty Ltd (JSC), for $150,000 as Dixon said ‘no better offer had been forthcoming’. Creditors also queried who exactly the business had been sold to and asked if properties owned by the directors could be made voidable by the liquidators of the company.
“Such transactions could not be made voidable, however if it was ascertained that the company had contributed to the equity in any property, the liquidators could lodge a caveat over the property,” Dixon said.
“Jim Sachinidis, his wife and aunt are involved with the running of JSC, however Mr Sachinidis has advised that his involvement will cease shortly.”
Dixon said it would be in the best interest of the company to initiate recoveries within six months and payments to employees, for unpaid superannuation, would be dependent on the outcome of the this.
Frank Burrone, the CEO of the Franco Burrone manufacturing business, which has been operating in Australia and New Zealand for more than 20 years, is owed nearly $99,000 by Satch.
Burrone, who attended the meeting along with 15 other creditors who are owed hundreds of thousands of dollars between them, queried what he should do with stock labelled with the Satch brand.
“This will need to be destroyed if it is not sold to JSC,” Dixon said.
Pippa Chambers