COURT: Kleenmaid creditors were banging on door
MORE than 20 creditors were demanding payments from former Sunshine Coast-based whitegoods company Kleenmaid before it collapsed, a court has heard.
Deloitte partner Richard Hughes told the Brisbane District Court on Thursday that Kleenmaid had been insolvent since before he was appointed as voluntary administrator in April 2009.
Former Kleenmaid directors Andrew Eric Young and Bradley Wendell Young have pleaded not guilty to fraud and operating a company when it is insolvent.
The brothers have been accused of defrauding the Westpac Bank of a $13 million loan by giving misleading information about the financial state of Kleenmaid.
As a major creditor, Westpac eventually employed Deloitte as administrator after an investigation into Kleenmaid's financial position.
Mr Hughes told the court that in the June 2009 quarter, 23 of Kleenmaid's creditors had made demands for outstanding payments.
At the same time, the company was already in 33 repayment plans with creditors.
A Deloitte report tendered to the court said Kleenmaid had agreed to repayment plans with creditors, but there was a "consistent pattern of not meeting revised commitments".
The report said Kleenmaid was experiencing "ongoing, accelerating and numerous demands for repayment, both formal and informal".
Mr Hughes said as administrators, his team had copied all of Kleenmaid's electronic records, including emails and communication, as well as financial records.
Mr Hughes told the court Kleenmaid had been operating with a "large deficit", as the company's "liabilities far outweigh(ed) available assets".
The Kleenmaid brand was sold in 2009 to Compass Capital Partners, and the company now operates out of Sydney.
The hearing will continue on Monday for another 11 weeks.
- ARM NEWSDESK