The Perth Fashion Festival has gone into administration owing more than a hundred creditors about $819,000, the newly appointed administrators have revealed.
Richard Albarran and Cameron Shaw of Hall Chadwick were appointed administrators on Monday and are assessing the financial position of the company.
The first creditors’ meeting will be held on November 28.
Perth Fashion Festival joint directors Tony Sage and Mariella Harvey-Hanrahan said they had been trying to secure a repayment agreement with the 104 festival creditors but claimed this had not been achievable.
“A small number of creditors were not prepared to enter into a payment agreement and funds that are owed to PFF by a major debtor have, as yet, not been received,” their statement said.
They had, therefore, placed the company into voluntary administration.
One outcome would be proposing a settlement with creditors through a Deed of Company Arrangement.
Such an arrangement would aim to maximise the chances of the festival continuing to operate or to provide a better return for creditors than an immediate winding up of the company, or both.
“During this whole process, we – along with Sentinel Corporate Advisory and other parties – have been working with potential investors to recapitalise the company,” the directors said.
In October Perth Fashion Festival offered creditors 25 cents in the dollar or full repayment over six years.
Creditors were told if they did not accept the arrangement, they would receive nothing because the company would go into liquidation.
Perth Fashion Festival was managed by Perth Fashion Festival Pty Ltd for 20 years until it faced problems paying suppliers after the 2018 shows.
In an email sent to creditors in October, Jack Blahut of Sentinel Corporate Advisory said he was yet to receive a response from creditors in regards to the proposed debt agreement.
“Whilst neither option (25c in the $ or full repayment over 6 years) may be palatable to you, the fact of the matter is that the company has no capacity to make any other compromise, at this point in time,” Mr Blahut wrote.
Source: Thanks msn.com