The chartered accounting firm appointed to administer the Taxi Club has advised its creditors that they will get the best outcome if the company is wound up and its assets sold off – but the club is still hopeful it can reopen at a new venue.
ArmstrongWily charted accountants wrote to creditors on May 4 to report on their investigation into the company’s affairs and to provide them with advice about the best path forward.
“It is not in the creditors’ interest for the company to execute a Deed of Company Arrangement as no proposal for a Deed of Company Arrangement has been provided,” the report read.
“It would not be in the creditors’ interest for the administration to end and control be returned to the officers of the Company. The Company is insolvent. The Company is therefore not in a position to resume normal trading. If control of the Company was to be returned to the Directors, there would be no formal administration in place to ensure the orderly realisation of assets and protection of creditors’ interests. This option is therefore, in my opinion, not in the best interest of creditors.
“It is in the interest of creditors for the Company to be wound up. The Company cannot continue trading past the Administration as the landlord is not willing to renew the lease. A liquidation of the Company will ensure an orderly realisation of the Company’s assets for the benefit of creditors.”
ArmstrongWily estimate a return of around 26 cents in the dollar to creditors through this process.
The administrator found that the Taxi Club’s current board of directors had tried to make the best of difficult circumstances – but found that past directors had made poor decisions about the direction of the business, and this, coupled with new smoking laws, the global financial crisis, and increased taxes on poker machine revenue had seen the profitability of the club decline.
Creditors will meet on May 16 to decide the club’s future.
Taxi Club general manager Michelle Mancini told the Star Observer the club was still hopeful of amalgamating with another club at a new location and was hopeful of a good outcome at the May 16 meeting.