'Compelling evidence' of insolvent trading

The administrators told the corporate watchdog there is “compelling evidence the company traded while insolvent.” That finding formed part of investigations into possible breaches of directors’ duties at Retail Adventures.

The article says directors facing possible action include Kathmandu founder Jan Cameron. Administrators have identified possible breaches of directors’ duties as part of their investigation.

Yes. The administrators said Retail Adventures’ professional indemnity insurers have been put on notice of the administrators’ intention to lodge a claim under the directors’ and officers’ liability insurance policy.

They informed the Australian Securities and Investments Commission (ASIC) under section 438D of the administrators’ preliminary view that breaches may have taken place.

The information was revealed in records of the committee of a creditors’ meeting that were posted on the Deloitte website, after criticism about how the administration was being handled.

Last month litigation funder IMF said it intended to fund legal proceedings to recover losses incurred by unsecured creditors of the company, who are owed $165 million.

The article states unsecured creditors are owed $165 million, and IMF has said it intends to fund legal proceedings to try to recover those losses.

The article reports administrators have found compelling evidence the company traded while insolvent, notified ASIC of possible breaches of directors’ duties, put insurers on notice about potential D&O claims, and that a litigation funder plans to pursue recovery for $165 million owed to unsecured creditors.