Light at the end of the tunnel for Stockford creditors
Administrator KordaMentha has appeased creditors of the failed Stockford group of companies after announcing yesterday a first dividend payment of 50 cents.
The payment, made a month prior to the originally anticipated date of October 31, follows creditors voting to accept a Deed of Company Agreement back in May that would see secured creditors paid in full and unsecured creditors receiving a return of between 50 and 100 cents in the dollar.
Partner with the corporate recovery firm Mark Korda says the payment to the unsecured creditors is “testimony to the flexibility and effectiveness of the voluntary administration process”.
While the administrators have received and adjudicated on more than 400 proof of debts, they are currently in the process of settling a number of disputed proofs of debt.
Further dividends are expected to be paid on a quarterly basis, but according to Korda, the amount of these dividends will depend on the resolution of disputed claims.
KordaMentha was appointed administrator of Stockford’s 84 companies when the group floundered in February. More than a third of the principals of Stockford practices bought back their businesses, with over 50 business units sold off in total, generating proceeds of $19 million to $20 million.
Secured creditors and all employee entitlements and costs were estimated at $10 million to $11 million and were to be paid in full, while the total amount of unsecured claims was estimated to be $10 million to $20 million.
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