The founders of collapsed kitchen and laundry appliance company Kleenmaid, Andrew and Brad Young, say they want to remain involved in the business and help it get back on its feet, even as the number of people affected by the collapse heads towards 10,000.
The Youngs placed the Queensland-based business in administration on Thursday with debts of around $73 million.
Secured creditor Westpac is believed to be owed $27 million, the company’s trade creditors and suppliers are owed about $16 million, and $2 million is owed to landlords.
Up to 6000 customers (many of whom have paid deposits but are yet to receive goods) are owed as much as $27 million. These customers will rank as unsecured creditors and are therefore unlikely to receive full refunds on their deposits. Customers who own Kleenmaid goods have been told warranties will not be honoured.
Administrators John Greig, Richard Hughes and David Lombe of accounting firm Deloitte have spent the Easter weekend poring over the company’s financial accounts and investigating the position of trade creditors, customers and staff.
“Unfortunately we have been unable to continue the employment of all 150 Kleenmaid staff. However, around 25 employees will return to Kleenmaid to provide assistance with the administration process and dealing with inquiries,” Greig said in a statement.
A creditors meeting is due in the middle of next week, with a date and location still to be confirmed. A Deloitte spokesman said this morning that the administrators have been in touch with the Australian Securities and Investments Commission regarding allegations of insolvent trading, although he stresses it is too early to speculate on the outcome of this investigation.
The Kleenmaid collapse will also hit the franchise sector, as 15 of the company’s 20 retail outlets were franchised. The company also operated a network of 30 franchisees providing in-home servicing of Kleenmaid products.
Creditors have reacted angrily to the collapse and a group (including one creditor armed with a sledgehammer) confronted Andrew Young in the hours after the company was placed in administration.
But Andrew Young has denied allegations that he continues to live the high life, and says he was forced to sell his $8 million holiday home to re-invest in the business.
He also says staff will be paid outstanding amounts and allegations that superannuation contributions have not been paid for up to 12 months were incorrect.
Both Youngs have been working closely with the administrators and have told the Sunshine Coast Daily they want to be involved with the company in the long term.
“The easiest thing for us is to pull up stumps and say ‘see you later’,” Andrew Young said.
“But it is up to the creditors. It would be disappointing not to be part of the future.”
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•· How do I know if my business has real cashflow problems?
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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