Mark Quinlan from Gallery Motor Inn.
Mark Quinlan from Gallery Motor Inn. Meg Gannon

Businesses caught in Ostwalds liquidation dealt fresh blow

A NUMBER of Dalby businesses caught up in the 2017 collapse of Ostwald Brothers have been dealt a fresh blow, as liquidators move to recover several million dollars worth of potential "preferential payments" made in the six months before the construction business went bust.

Dalby Chamber of Commerce and Industry president Rohan May said the town "had been papered" with notices from liquidators FTI Consulting alleging preferential payments, despite many of those same businesses still being owed money by the in-liquidation Ostwald Bros Pty Ltd.

Mr May described the impact of the notices as "debilitating".

"In addition to still being owed millions of dollars, the little amount of money they did get paid is sought to be recovered by the liquidators," he said.

Dalby Chamber of Commerce and Industry president Rohan May.
Dalby Chamber of Commerce and Industry president Rohan May. Michael Doyle

"It really is a double blow for the small businesses, for an event that happened almost two years ago, to have to revisit that now when everyone's moved past it is really, really disturbing.

"It's just reignited a lot of very painful memories for people."

Liquidator Kelly-Anne Trenfield acknowledged the pursuit of potential preferential payment claims was a sensitive issue, but said it was "part of our duties that we have to explore possible recovery actions".

Up until the Friday before Ostwald Brothers went into voluntary administration in August 2017, Mark Quinlan said he was looking after the company's employees in his business, The Gallery Motor Inn.

"I had blokes staying here right up until the Friday prior. In good faith I gave them three meals a day, gave them a bed... They still owe me $25,000," he said.

Now, Mr Quinlan said he had received correspondence from FTI Consulting alleging he was the recipient of an $82,500 preferential payment from the defunct company.

Various provisions under the Corporations Act allow a liquidator to call back "preferential" payments made in the six months prior to a company being wound up where a creditor has received a payment for an unsecured debt that is greater than the amount the creditor would have received in the winding up of the company.

Mr Quinlan described the claim as "comical", adding that he did not have $82,500.

"And I doubt any small business in a rural town would have a lazy 82-and-a-bit thousand to hand over to a second liquidator for a company that has now been in liquidation for two years - let alone hand over to anybody," he said.

FTI Consulting took over the liquidation of Ostwald Bros Pty Ltd from PricewaterhouseCoopers in mid-2018, amid growing creditor dissatisfaction with the former liquidators and a looming conflict of interest over PPB Advisory's merger with PwC.

"What effect would (paying the money back) have? It would have a huge effect. How they get it, how I get it, how that transaction is going to transpire - that's the comical part," Mr Quinlan said.

In her September 2018 statutory report to creditors after taking carriage of the Ostwald Bros liquidation, Ms Trenfield wrote that she had identified $5.2 million in preferential payments to 33 creditors that "may be" recoverable.

At the time she wrote that investigations into uncommercial transactions and insolvent trading claims had been put on hold until she was able to obtain funding, either from recoveries or external sources.

She also noted she had received correspondence from company directors Daniel, Brendan and Matthew Ostwald's solicitors "disputing the preliminary conclusions of the former liquidators" with regard to allegations of insolvent trading.

Mr Quinlan described the preferential payment claims as "nothing more than a money grab from a liquidator".

"They're going to use the little people, me being one of them. Any bit they can screw out of us, they will then use that to go after the bigger people," he said.

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