OSTWALD BROS: Future of 200 workers decided today
THE futures of more than 200 Ostwald Bros workers will be decided today in Toowoomba, with the liquidation of the struggling civil construction firm likely after no buyer was found.
Ostwald Bros Pty Ltd, which is one of three entities that make up the company, will be voted on by hundreds of unsecured creditors this afternoon at the Empire Theatre.
A vote to liquidate would lead to the layoff of 210 workers, adding to the 260 workers already sacked in August and September after the administrators were appointed.
The meeting comes amid massive tensions between the creditors committee, made up of 10 different entities and businesses, and administrator Derrick Vickers of PriceWaterhouseCoopers.
Several members of the committee, who cannot be named due to signed confidentiality agreements, told The Chronicle they were organising a vote to remove Mr Vickers and PwC from the liquidation process, citing a "lack of communication" between the administrator and creditors.
"The committee made this decision after speaking with hundreds of creditors and employees that complained about PwC's lack of communication," they said in a statement.
"PwC is seeking over $1.5 million in fees for the work done to date and is refusing to step down."
A spokeswoman for PwC confirmed it was aware of the push from the committee, but said it was in the best interests of everyone that it continued the process.
"In this environment we are confident that the administration has been conducted efficiently and fairly," she said.
"We respect the right of creditors to look at an alternative liquidator, however, in our view such an appointment would not serve the best interests of creditors as a whole."
INSOLVENCY CLAIMS PUT FORWARD BY ADMINISTRATORS
THE directors of Ostwald Bros might have been trading the business while insolvent during the previous financial year, according to a report to creditors by PwC leaked to The Chronicle.
On top of a diminishing cash flow and mounting pressure from unsecured creditors to pay its debts, Mr Vickers wrote that the major blow came on August 7 when the Australian Tax Office issued Brendan, Daniel and Matthew Ostwald with a Director Penalty Notice for debts worth $4.2 million.
Ostwald Bros went into voluntary administration just three days before the 21-day deadline expired, at which point its net current assets were more than $2 million in the red and the shortfall between its debt and its cashflow was more than $10 million.
"As a result of our investigation into potential insolvent trading by the directors, we have concluded that there may be claims that a liquidator could pursue against directors in respect to trading the company while it was insolvent," Mr Vickers wrote.
FORMER DIRECTORS MAKE BID FOR PART OF BUSINESS
IN ANOTHER stunning twist, the Ostwald family has confirmed it has made a formal bid to buy one of its former assets, Ostwald Construction Materials, with the help of a third "unrelated" party.
In a letter to administrator Derrick Vickers and PwC two days ago, Brendan, Daniel and Matthew Ostwald said they had submitted a deed of company arrangement worth $2.15 million, which was an updated offer from an original bid on November 8.
"The DOCA contribution of $2,150,000 is to be substantially funded by a new, unrelated third-party investor," the letter stated.
"The share transfer contemplated in the DOCA will result in as a substantial portion of the equity in OCM being held by the unrelated third-party investor."
A spokesman for the creditors committee, which this week demanded Mr Vickers and PwC step down from the liquidation process, took issue with this offer considering the financial backer was unknown.
"What was already going to be a tense situation, because of the tens of millions of dollars lost, has become even more inflamed by an offer associated with the former directors of Ostwald Construction Materials Pty Ltd to purchase that entity," they said in a statement.