Liquidation recommended for Toowoomba development venture
THE administrator of a land development company headed by Toowoomba businessman Mark Peart has recommended the business be placed in liquidation.
Homestead Highfields was placed in voluntary administration by Mr Peart on April 21, owing eight unsecured creditors $526,000.
The directors of the company - Mr Peart, his wife Fiona, and Grant Allsopp, are proposing a deed of company arrangement, where another of Mr Peart's companies will provide a one-off lump sum payment of $23,000 and creditors Moella Pty Ltd, Murray & Lyons Solicitors, and related parties Peartland Pty Ltd and Power Tynan Pty Ltd will agree to withdraw their proofs of debts and not claim for a dividend.
The current amount claimed by those creditors totals $284,350.
The company's directors advised administrator Jason Bettles the intent of the deed was to settle the company's debts, reignite discussions with funders and try to settle on the Toowoomba property they wished to develop.
Administrator Jason Bettles is recommending creditors reject the deed.
According to Mr Bettles' investigations, the best case scenario for a DOCA would see unsecured creditors receive 4.5 cents in the dollar, while under a liquidation they could see up to 60 cents in the dollar.
"If creditors choose to accept the terms of the deed, it will also mean that the company will avoid liquidation and thus no further investigations would be undertaken in respect to any potential insolvent trading and/or other potential voidable transactions," Mr Bettles wrote in his report to creditors ahead of a key second meeting next week.
Mr Bettles said he had also received correspondence from a creditor seeking that he investigate the proof of debt claims lodged by creditors who under the proposed deed would receive nothing.
In the event of a liquidation, Mr Bettles said he would investigate potential insolvent trading claims, assess the commerciality of $417,884 paid to another of Mr Peart's companies, and any potential preferential payments.
Homestead Highfields is the fifth of Mr Peart's ventures to enter external administration in 19 months.
He was contacted for comment.