The picture in the Gerry Gibbs Camera House liquidation is becoming clearer, and points to their being no dividend to unsecured creditors, who according to the administrator’s latest circular to creditors are owned around $1.3 million.
The administrator’s Report as to Affairs (RATA) indicated total estimated realisable assets of $788K comprised: sundry debtors – $38K; stock – $504K; plant & equipment – $232K; and other assets (shares in Raleru Pty Ltd) – $15K.
This is against total liabilities of $2.04 million, including secured debt for employee entitlements and superannuation, $69K, and to the ANZ Bank, $640K, which ‘suggested that the unsecured creditors [mainly suppliers] were unlikely to receive any return whatsoever from the liquidation.’
‘At this stage, the Liquidators are of the view that secured creditors claim will be not satisfied in full, and accordingly it is unlikely that there will be funds remaining for a dividend distribution to unsecured creditors,’ wrote Melsom Robson partner, George Lopez.
The Gerry Gibbs Camera House business and the 1000 square metre property upon which it is located are both owned by the Gibbs family, but by separate business entities. Only ‘B&G Gibbs Nominees Pty Ltd T/A Gerry Gibbs Camera House’ is in liquidation.
The free-standing Cecil Street, Cannington, property was sold to DigiDirect owner Shant Kradjian last week.
Melsom Robson appeared to be unhappy with the decision of Gerry Gibbs Camera House directors to sell the property, as it eliminated any opportunity to sell the business as a going concern. There was also related criticism from the administrator of ‘very optimistic’ values ascribed to stock and plant and equipment:
‘It is the liquidator’s view that the values ascribed to the stock and plant and equipment were very optimistic, especially given that just prior to the meeting, the building had been sold to a party which was in the photographic retail business, which would not allow the business to be sold as a going concern and which would have detrimental effect on the realisable value of those items,’ wrote George Lopez.
‘At the creditors meeting on August 8, ‘the directors advised those present that the building in which the store was located had been sold to an unrelated third party. The Liquidators raised their concern that the new owner would not allow the Liquidators to proceed with the sale of business to any other party and as consequence, the Liquidators’ negotiating power in selling the business as going concern would be diminished.
‘Those concerns were realised when the intending purchaser of the building met with the liquidator and offered what the Liquidators felt was an unreasonably low price for the stock and plant and equipment. Given that the costs of removing the plant and equipment would be prohibitive, and that there was a very limited market for those items, the Liquidator felt obliged to accept the offer to purchase the plant and equipment and intellectual property for the sum of $85,000 plus GST.’ (The estimated value was previously put at $233K.)
The liquidators now have only a few days to maximise the value of existing stock via ‘a closing down sale, seeking buyers of the items in bulk and further negotiations with the incoming owner of the building’ as it will be re-opening next Monday as a DigiDirect outlet.
DigiDirect has re-employed store manager/director Murray Gibbs and his staff, according to DigiDirect’s announcement for the new store. See separate story.