Following the liquidation of his Patinack Farm horse racing empire, Nathan Tinkler has created a new company to employ the thoroughbred operation’s staff, but Patinack Farm Administration’s administrator says the new business is not a phoenix company.
The embattled former billionaire and Rich Lister has been fighting to save Patinack Farm Administration, which owed creditors $4.8 million when it was liquidated late last year over outstanding employee payments.
Since then, Tinkler has sold several hundred of the 1,000 breeding and racing horses in his Patinack Farm empire.
Anthony Matthews & Associates is conducting the liquidation and spokesperson Raymond Nolan told SmartCompany Patinack Farm Administration was allowed to temporarily continue operations after director Troy Palmer paid $270,000 as a surety and the outstanding entitlements to staff.
Patinack Farm Administration did not own any of the horses or properties which make up Tinkler’s racing operations but it did employ the 147 staff behind Patinack Farm.
“The only thing that was really in this company was the employees, it was basically a service entity that provided employees to the Patinack Farm group,” Nolan says.
Following the liquidation all but three of those staff have resigned from Patinack Farm Administration and have been re-employed by a new company, Thoroughbred Administration.
Thoroughbred Administration is controlled by Palmer and was created after Patinack Farm Administration’s collapse.
“On the 19th of December 2012 the vast majority of the employees resigned from Patinack Farm Administration, they were offered employment with Thoroughbred Administration, which is linked to the directors,” Nolan says.
“They resigned on the basis that their entitlements would go across with them and the overwhelming majority accepted.”
Nolan says following the creation of the new company and resignation of staff the liquidation is continuing as normal and the liquidators are continuing to take action with regard to debts and action on insolvent trading.
“I am sure they have had their own legal advice to ensure it’s legal and doesn’t fall foul of the Australian Securities and Investment Commission’s phoenix provisions,” Nolan says.
“They were needing to pay the employees and to pay money to the liquidator to cover exposure for payroll and other liabilities, so they were essentially doubling up each week. So I think they decided to set up a new entity to stop doing that.”
While initial reports indicated Tinkler would fight Patinack Farm Administration’s liquidation, Nolan says this does not appear to be the case.
“We haven’t heard anything further on seeking to terminate the winding up but as far as we are concerned our liquidation continues as for any other liquidation,” Nolan says.
Patinack Farm’s debts are still outstanding, with the major creditor being the Australian Taxation Office, which is owed $4.6 million.
The establishment of Tinkler’s new company follows speculation lenders to the embattled entrepreneur are ready to sell his stake in Whitehaven Coal, which is the major source of his remaining wealth.
News agency Reuters reported earlier this week that Tinkler’s main lender, Noonday, an arm of US hedge fund Farallon Capital, was in talks with Chinese miner Shenhua and an unidentified Japanese firm, about the sale of Tinkler’s 19.4% stake in Whitehaven, which is currently worth around $675 million.
Tinkler’s spokesperson told SmartCompany the coal baron would not comment on the reports as they were just speculation.
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
