Litigation group threat to pursue Cameron
IMF said on Tuesday it intended to fund an investigation, public examinations and legal proceedings to recover losses incurred by unsecured creditors of Retail Adventures who are owed $165 million.
IMF said it was approached by an action group of creditors called Retail Adventures Creditors Unite.
"They've approached us as they have concerns about the way the administrator is excluding them from the process," said IMF executive Paul Rainford.
Most of the debt relates to suppliers who face a zero return from the sale of the Retail Adventures business back to Ms Cameron this month for $59 million.
The amount will be credited against Ms Cameron's secured debt over Retail Adventures totalling $77 million. This secured debt is one of IMF's targets.
"The claims relate to allegations of insolvent trading by Retail Adventures and the enforceability of securities held by companies associated with Jan Cameron," IMF said in a statement to the stock exchange.
IMF said funding was conditional on a sufficient number of unsecured creditors executing the agreement.
It is believed they need creditors with $40 million worth of claims to sign on before it can proceed.
It also needs creditors to vote to put the company into liquidation at a creditors' meeting in August.
If Retail Adventures is put into liquidation, IMF will look to appoint a special purpose liquidator to look at the issue of insolvency and the charge.
Fairfax Media revealed this month that the administrators appointed to Retail Adventures are investigating whether the discount retailer was insolvent more than a year before its collapse.
They are also investigating two payments to "related creditors" the month Retail Adventures collapsed, according to documents lodged with the Australian Securities and Investments Commission.
Ms Cameron is expected to offer a deed of company arrangement as an alternative to liquidation.
Frequently Asked Questions about this Article…
IMF has said it intends to fund an investigation, public examinations and legal proceedings aimed at recovering losses for unsecured creditors of Retail Adventures. The claims relate to alleged insolvent trading by Retail Adventures and questions about the enforceability of securities held by companies associated with Jan Cameron.
An action group of creditors called Retail Adventures Creditors Unite approached IMF, saying they had concerns about being excluded from the administrators' process and seeking funding to pursue recovery for unpaid claims.
Unsecured creditors of Retail Adventures are owed about $165 million, with most of that debt relating to suppliers who face a zero return from the recent sale of the business.
The business was sold back to Jan Cameron for $59 million, and that amount will be credited against Ms Cameron's secured debt over Retail Adventures, which totals $77 million. IMF has identified that secured debt as one of its targets.
IMF said funding is conditional on a sufficient number of unsecured creditors executing the funding agreement — it is believed creditors with about $40 million of claims must sign on — and creditors must vote to put Retail Adventures into liquidation at a creditors' meeting scheduled in August.
If Retail Adventures is put into liquidation, IMF plans to seek appointment of a special purpose liquidator to examine issues of insolvency and the charge, and potentially pursue recoveries through legal proceedings.
Administrators are investigating whether Retail Adventures was insolvent more than a year before its collapse and are also looking into two payments made to 'related creditors' in the month the business failed, according to documents lodged with the Australian Securities and Investments Commission (ASIC).
Yes — Jan Cameron is expected to offer a deed of company arrangement (DOCA) as an alternative to liquidation, which would be considered by creditors as part of the insolvency process.
Call 1300 880 160
Start a chat
Schedule a call
