The second meeting of creditors for the nine companies that form the ‘Bubs Baby Shops Group’ was held today. No Deed of Company Arrangement was proposed, and creditors resolved to appoint Worrells’ voluntary administrators as liquidators of the companies.
The Bubs Baby Shops Group had a 17-year trading history with six stores in Queensland and two stores in New South Wales, along with an online sale entity. All trading entities are now closed.
The expressions of interest campaign for the sale of the Bubs Baby Shops Group’s assets, is still being assessed for viability with interested buyers.
Worrells understand that approximately 80 percent of customer layby purchases were made on a credit card. And that further to Worrells’ proactive communications with Bubs Baby Shops’ customers regarding the possibility of a charge-back facility being available with their financial institution, many have been successful in getting their money back. Other customers that chose to finalise their layby purchase and where the stock was available, were offered the opportunity to settle their purchase in-store. Unfortunately, for some customers, they had no other recourse other than lodging a proof of debt into the administration as an unsecured creditor.
Worrells’ report to creditors shows that the secured creditors are owed $1.6 million and that is not expected to be paid in full. Unsecured, non-priority creditors (e.g. suppliers/ATO/layby customers) debt totals $3.8 million. Current indications are that these creditors will not receive a dividend.
As at Worrells’ appointment, no outstanding wages were due to be paid. Since their appointment, the employees’ leave and redundancy amounts have now crystallised. Worrells report states that employees across the group are owed just over $1 million. The Government’s Fair Entitlement Guarantee scheme (FEG) has advised Worrells that they intend to group the companies for the benefit of a distribution to employees to payout some entitlements, under the scheme’s criteria. Any recoveries from the companies’ assets will result in FEG recouping some of its distribution.
The Bubs Baby Shops’ director has assisted Worrells in all its enquiries to date.
Worrells is pursuing its obligations as liquidator by investigating any insolvent trading claims and uncommercial/voidable transactions.
Worrells appreciates the impact the appointment has on related businesses and the community and will continue to proactively communicate with all affected parties.
Worrells has 26 offices nationally and 24 partners, across Qld, NSW, ACT, Vic, SA, and WA. Worrells has been providing solvency management, insolvency administration, and forensic investigation services for over 40 years.
—ENDS—
Contact:
Simon Cathro
Partner, Worrells Sydney
simon.cathro@worrells.net.au
Raj Khatri
Partner, Worrells Brisbane
raj.khatri@worrells.net.au