Stax’s total liabilities have nearly tripled according to a new report by the liquidators at Cascap Advisory, which reveals a collection of secured creditors being owed millions, including a major bank and a fintech lender.
The Australian activewear brand initially fell into receivership in late June after downsizing operations post-COVID. The business then entered liquidation, with the brand’s asset reportedly up for sale.
Earlier reports, including by Ragtrader, indicated that Stax’s total liabilities were around $8 million. The liquidator’s estimated value in the newly released report shows Stax’s total liabilities sit around $23.7 million.
This is more than double what Stax shared in its report on company activities and property (ROCAP), which the liquidators called “partially completed”.
According to the ROCAP, total liabilities among unsecured creditors amounted to just over $9 million. This includes around $450 million in employee entitlements. The report suggests the ROCAP did not include secured creditors, which amounted to more than $10 million.
NAB bank is the largest creditor of Stax, with its debts totalling $7,337,467. NAB holds a first ranking All PAP security interest, the enforcement of which resulted in the appointment of the receivers and managers in June.
Bizcap AU Pty Ltd – a fintech lender – holds a second ranking All PAP security interest, with debts totalling $1,882,681. As the subordinate general security interest, Bizcap's recovery is dependent on any surplus remaining after NAB's debt has been satisfied in full, which the liquidators claim is unlikely.
Stax’s hired law firm Hitch Advisory Pty Ltd is third in line, holding an All PAP security interest, with outstanding legal fees totalling $14,166.
In addition to the three All PAP security interests above, Wayflyer Finance holds a security interest over the company's accounts pursuant to a merchant cash advance facility, with debts totalling $3,914,203. Financiers holding purchase money security interests over specific vehicles are owed $548,346 in aggregate, and financiers holding purchase money security interests over other goods are owed $44,297 in aggregate.
Cascap has yet to form a view as to the causes of Stax’s collapse, and hasn’t called a meeting of creditors yet. The liquidators are now undertaking an investigation.
The report also reveals why many Stax customers are still waiting for their orders to be fulfilled.
Stax entered liquidation with stock on hand totalling $1,184,634, of which $971,942 is held by third-party logistics provider, Shiparoo. Shiparoo is owed up to $400,000 in fees and asserts a lien over this stock, which it will not release unless its claim is satisfied.
A separate container of stock, at cost of approximately $100,000, has been paid for but has not yet departed the manufacturer in China. The stock remains under the control of the receivers and managers.
Cascap believes no realisations from stock are anticipated in the liquidation.
Another key asset includes fitout for retail and office, amounting to $1.26 million.
The company’s management accounts also record a related party loan account outstanding from Stax in the amount of $407,722. This loan account will be subject to further investigation.