Liquidators pursue Mannway creditors for millions

Liquidators of Mannway chase creditors for millions of dollars, amid claims Stuart Brown will not face prosecution for insolvent trading

Liquidators pursue Mannway creditors for millions
Liquidators pursue Mannway creditors
By Brad Gardner | October 28, 2010

The liquidators of failed transporter Mannway are chasing creditors for millions of dollars and believe director Stuart Brown is unlikely to be prosecuted for insolvent trading.

Rodgers Reidy Chartered Accountants expects the investigation into the running of Mannway will take "a few years" to complete as it tries to recover money paid to creditors under preferential deals.

At least one creditor is facing a $1 million claim, but Rodgers Reidy manager David Holton declined to name the parties being pursued.

ATN understands one party is the Australian Taxation Office (ATO) because Mannway had entered into a special agreement to pay money owed.

"Certain payments that have been made to creditors where they’re seen to be made in preference to other creditors can be recovered by a liquidator, put into a pool of funds and then distributed evenly amongst other creditors," Holton says.

While saying Rodgers Reidy believes Mannway was insolvent, Holton adds the firm is unlikley to pursue Brown for insolvent trading.

"We probably think there are reasonable grounds for him to say the reason he continued to trade was to seek a purchaser of the business," Holton says.

"If he had of just shut the doors it would have meant 300 or 400 employees were out of jobs."

Holton says Mannway would not have benefited if Brown decided to close the business due to high debts it had occurred.

As revealed by ATN last year, a report by Rodgers Reidy showed Mannway was insolvent more than one year before administrators were called in and did not have enough assets to maintain its liabilities from at least June 2007.

The report says the Mannway Group suffered losses of almost $34.5 million and finance costs ballooned from $1.92 million in June 2007 to $5.14 million in 2009.

According to the report, employees were owed more than $5.6 million in unpaid wages, annual leave, long service leave, superannuation and redundancies.

Most entitlements are being recovered through the Federal Government’s scheme set-up to help employees made redundant.

Former Mannway employees will need to rely on Rodgers Reidy to recoup outstanding superannuation because the government scheme does not cover it.

Holton says there are some former employees requesting a review of their claims.

"If anyone has got any information of issues with their claims they can contact us and we’ll sort them out," he says.

Mannway was founded in 1979 by Bill Mann before being taken over by Brown.

The company went into administration on October 14 last year, blaming declining economic conditions.

Family-owned business Costa Logistics was interested at one point, but it could not reach an agreement with administrators on a deal.

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