Receivers of collapsed furniture chain Timberland Group have launched legal action to try to secure the assets of the company, after claiming that the assets of the collapsed company have been transferred into a new company without payment.
Deloitte Partners Neil Cussen and Vaughan Strawbridge were appointed as receivers of the Timberland Group on September 6, and advertised the business for sale on September 10.
But the receivers say it soon became apparent that six months before the group collapsed, the business, stock and goodwill of the “old” Timberland Group had been placed into a “new” Timberland Group – without the knowledge or consent of the company’s secured creditor and without any payment being made.
The receivers claim the director of the “new” Timberland Group is the wife of one of the directors of the “old” Timberland Group, Luis Santos.
On 14 September, the receivers commenced proceedings in the Supreme Court of New South Wales to get access to the stock held by the “new” Timberland Group on behalf of the secured creditor of the “old” Timberland Group. The matter returns to Court on September 30, 2010.
“It is our understanding that the new companies are trading with assets transferred from the receivership companies for no consideration,” Neil Cussen said in a statement.
The receivers now find themselves in a complex situation.
They have taken control of Timberland Group stores in Warners Bay and Castle Hill, which have now been closed and secured, with the remaining stock moved to an offsite storage facility.
However, receivers have been unable to take control of the Penrith and Campbelltown stores, which are under the control of the directors of the “new” Timberland Group.
“The two stores in Fyshwick and Caringbah which are owned by two separate franchisees remain unaffected by the receivership and continue to operate as normal,” Cussen said.
Attempts to contact Luis Santos and his wife through Timberland’s Penrith and Campbelltown stores and through the company’s head office have been unsuccessful.
Deloitte has not released the name of the secured creditor, or revealed the level of debt involved in the collapse.
Fyshwick-based franchisee Tony Purdy told SmartCompany this morning that the situation was “disappointing to say the least” but he is not sure how his position is affected by the collapse.
“I’m seeking advice at this stage. I am continuing to trade and I am being well supported by my suppliers,” he says.
To make matters worse for Purdy, his store is located at the DFO centre at Fyshwick, which he says has badly underperformed in the last two years.
“I feel like the meat in the sandwich at the moment,” he says.
“I have been in this complex for two years and it’s been nowhere near full. It’s commercial suicide to place yourself in a position where you are surrounded by empty shops.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
