BBY creditors could see a return of up to 31 cents in the dollar after they decided to deal with two of the 10 companies associated with the firm under a Deed of Company Arrangement, while four other arms of the business have been put into liquidation.
While the Supreme Court of NSW has granted administrators, KPMG, an extension of the convening periods for calling a second meeting of creditors for the remaining four companies, until 30 September 2015.
The stockbroking firm entered voluntary administration last month, with the Australian Securities and Investments Commission (ASIC) suspending the Australian Financial Services Licences (AFSLs) held by BBY Ltd, BBY Advisory Services Pty Ltd and SmarTrader Limited, for three years, from 28 May 2015.
Initial findings from the administrators’ report found there were indications of possible applications by BBY of client trust funds for unauthorised purposes since June 2014.
The administrators also found “inaccurate information may have been provided to BBY’s lender to support additional funding requests”, over the last 12 months.
In an updated report, the administrators said, “there may be a shortfall in the BBY Limited client monies accounts in the order of $16 million against total trust account obligations of over $30 million”.
KPMG had warned that unsecured creditors to the companies could receive distributions of between zero and 24 cents in the dollar should the businesses be liquidated.
However, the administrators had forecast that the SmarTrader and Hometrader businesses would provide a “zero return in a liquidation”, while they estimated creditors could gain a return of 31 cents in the dollar through a pooled Deed of Company Arrangement.
