Retail Adventures could end in court

RECLUSIVE retail businesswoman Jan Cameron could face a class action on behalf of unsecured creditors to her failed Retail Adventures discount chain, as litigation funder IMF rallies support for a public investigation into a string of issues around the collapse of the merchandise group including possible insolvent trading, uncommercial transactions and unreasonable director-related transactions.

The publicly listed IMF has sent letters to unsecured creditors of Retail Adventures to push for a public examination of the collapsed retailer's books, being the first important step to launch a lawsuit.

"What we have been pushing for and are prepared to fund is a proper public examination by the administrator of questions like the security, the insolvent trading and potential preference payments," said IMF managing director Hugh McLernon.

"This examination should have taken place already and certainly should took place either now or after the company goes into liquidation."

It comes as on Tuesday Retail Adventures administrator Deloitte said it had agreed to sell the failed Retail Adventures business to DSG Holdings, a company associated with Ms Cameron, for $58.9 million.

Ms Cameron was Retail Adventures' sole shareholder and the largest secured creditor of the discount retailer that operated under the Crazy Clark's and Sam's Warehouse brands.

Deloitte restructuring services partner Vaughan Strawbridge said DSG's bid was the highest offer received. Of the about 5000 staff at the company it looks like 4700 jobs will be retained. But the sale could be upturned if creditors vote to send Retail Adventures into liquidation, at which point IMF could pounce.

Deloitte has begun its own investigations into these contentious issues and in a circular to creditors said it was investigating issues around insolvent trading, uncommercial transactions and unfair loans to a company. It will also investigate $77 million in loans made by companies linked to Ms Cameron to Retail Adventures before its collapse, and that security backing up to $50 million of that debt could be challenged by a liquidator.

It is this $77 million in secured debt Ms Cameron is using to pay off the purchase price of Retail Adventures by her DSG Holdings.

Mr McLernon said if Retail Adventures was placed in liquidation, only after a public examination has occurred could he decide if there were grounds for a lawsuit against Ms Cameron and former directors of Retail Adventures. "The material available including the accounts that ASIC have required to be produced by [Retail Adventures] indicate that there is a serious need for a proper and full public examination."

A spokesman for Ms Cameron would not comment on these issues.