Thousands of creditors owed money from the collapse of e-tailer, E-Store may have to wait until the end of the year before receiving a dividend.
The failed e-tailer finally closed its doors in April 2003 after creditors voted to force the company into liquidation. Until that time, the company had been operated for about 18 months by director, Gerard Farley, under a deed of company arrangement. It had been placed into voluntary administration in October 2001.
E-Store liquidator, Ian Purchas, of appointed administrators Starr Dean Wilcox, said he planned to advertise his company’s intention to pay a dividend to E-Store creditors within a few weeks. However, the complicated arrangements behind E-Store’s collapse prevented him from giving any estimates as to what would be paid to creditors or what the shortfall would amount to.
Two pools of creditors are still owed money from the settlement of the now defunct E-Store business: some from the original E-Store collapse in 2001 and others from the second and final collapse last year.
Purchas said that Starr Dean Wilcox was awaiting legal judgement as to how these pools would be dealt with. When Starr Dean Wilcox was first appointed liquidator in October 2001, there were unsecured creditors of $2.2 million.
There were also employee claims of $240,000. These figures will have increased over the time E-Store continued trading.
Purchas said there had been a recent court judgement in a similar case to E-Store’s, which would help to determine how the pay outs would be made.
“The banks will be the biggest creditors as they will have given their charges back to their customers,” he said. Employee claims would be given priority, he said.
Other large creditors include IT suppliers. However, there were also thousands of creditors with relatively small claims, many of whom would have made credit card payments for goods not received, he said.
Purchas said the adjudication process helping to determine the amount paid to E-Store creditors would take at least two to three months, although a dividend was not likely to be paid until October at the earliest.
Starr Dean Wilcox handles more than 100 voluntary administrations a year.
The company claims a success rate of 50-60 per cent. Efforts were made to sell the E-Store business prior to its closure in April last year. Potential buyers included Perth-based e-tailer BuyQuick.com.
While the liquidators did not succeed in selling E-Store, Purchas said there had been fewer IT industry failures recently than there were several years ago.