Creditors back liquidation of four BBY companies
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.
AUTHOR
Nicholas O'Donoghue
Recommended for you
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
Global private markets firm Partners Group has launched an evergreen fund to provide Australian advisers with access to its cross-sector royalties strategy.
Franklin Templeton has reduced fees for two of its Brandywine fixed income funds and enacted a name change for its Global Income Optimiser fund.
