THE expected collapse of Tamworth's Jakab Industries Pty Ltd will see all workers get their entitlements and secured creditor Westpac Banking Corpor-ation get what it is owed, but other creditors will almost certainly miss out.
That is the essential message of a report released last week by Star Dean-Willcocks Crosbie, the Sydney-based insolvency administrator called in by Jakab last month after announcing its financial position was untenable.
The firm's dire situation was the result of millions of dollars owed by its British customers (essentially one customer in which Jakab itself is believed to be a 50 per cent shareholder).
In his report, administrator Ron Dean-Willcocks makes these points:
(1) After the employees and Westpac are paid out, "it is unlikely that such recoveries will result in a surplus being available for distribution to the second ranking secured creditor, Rosemont Investments, or ordinary unsecured creditors". (Rosemont Investments is a company controlled by the Jacoby family which has run Jakab for more than a decade).
(2) Jakab Industries, which owns the property from where the manufacture of ambulances and other special purpose vehicles is (still) being conducted, is a debtor of about $4,300,000 (subject to a mortgage in favour of Westpac).
(3) While there is still some uncertainty about who owns what, who owes who and how much is involved, "other related parties are creditors of the company in the amounts totalling $10,644,921".
Mr Dean-Willcocks said that he continued to "trade the operations of the company" and Rosemont Investments had undertaken to provide funding upwards of $150,000 so that could happen.
Although he had advertised the business for sale and there had been a number of expressions of interest, no offer to purchase had been received.
"Failing sale it would be my intention to put the residual assets of the company to auction on completion of the work in progress," he said.
Company director Karl Jacoby had indicated he was likely to propose to creditors a deed of company arrangement, but was unable to do this until settlement documentation was effected with the UK debtors and the likely surplus available for distribution in the administration was then more accurately
For these and other reasons, he proposed that a meeting of creditors planned to be held on Thursday this week should be adjourned.
Mr Dean-Willcocks said he had reached the following
• It was not in the interest of creditors at this stage that the company be wound up;
• It was not in the interest of creditors that the administration end; and
• As no deed of company arrangement had been proposed, he was unable to comment on that matter.
The UK debt was represented by product delivered there by Jakab totalling $2,297,541, product invoiced and shipped there but remaining on the wharves at Thamesport (valued last month at $1,685,944) and product invoiced and at sea, bound for the UK (value $947,112).
All or some of those amounts were questionable because they were "disputed".
More than $1.6 million would be recovered from the UK after expenses such as completion of work in progress.
Other than the money recovered from Britain, other asset recoveries available would include the sale of plant and equipment as a going concern of almost $750,000 (but a "gross auction" value of just $374,340).