statutory report by liquidator · x provide you with an update on the progress of the liquidation....

Statutory Report by Liquidator

BATHROOM TRADE SHED PTY LTD (IN LIQUIDATION)

ACN 167 608 451 (the Company)

6 March 2019 John McInerney Joint and Several Liquidator T +61 2 8297 2400 E [email protected]

Philip Campbell-Wilson Joint and Several Liquidator T +61 2 8297 2400 E [email protected]

Statutory Report to Creditors 2

Executive summary Page(s)

A dividend to creditors in this liquidation is unlikely and is subject to the successful pursuit of potential voidable transaction claims against the director personally, which requires funding. 7

The voidable transaction claims identified as part of our preliminary investigations could total $541,390.

5 & 6

The prospect of successfully pursuing the potential claims against the Director and recovering funds for the benefit of the liquidation is uncertain and requires further investigation.

6

The cost of further investigations is estimated to be at least $50,000. As there are insufficient funds available in the liquidation, we invite creditors to fund us as liquidators to further investigate the potential claims.

6

If there are no funds available to fund further investigation, the liquidation will likely be finalised in the next 3 months.

We are required to report our investigation findings to the Australian Securities and Investments Commission (ASIC) who may undertake further investigations and may take disciplinary action against the Director.

We seek creditor approval of the fees incurred to date and future fees. To minimise costs we have elected to seek the approval of creditors for our remuneration without a meeting. To participate in the proposal please complete and return the relevant forms by 1 April 2019.

7

Introduction We refer to our initial correspondence to creditors dated 20 December 2018 in which we advised you of our appointment as liquidators and your rights as a creditor in the liquidation.

The purpose of this report is to:

Provide you with an update on the progress of the liquidation.

Advise you of the likelihood of a dividend being paid in the liquidation.

We will also be requesting that you consider our detailed remuneration report and pass a proposal to approve our remuneration. The Joint and Several Liquidators have relied on information provided from numerous sources to prepare the report, including:

Discussions with the Director of the Company;

Discussions with the secured and unsecured creditors of the Company;

Information available from public sources, such as, Australian Securities and Investments Commission (ASIC) and the Personal Property Securities Register (PPSR); and

A review of the Company's bank statements.

The Liquidators invite creditors to provide further information on any of the matters detailed in this report or relating to the Company generally where this may assist with the investigations into the affairs of the Company.


Update on the progress of the liquidation

Assets and liabilities

The Director of the Company is required to complete and provide to the Joint and Several Liquidators a statement about the Company's business, property, affairs and financial circumstances, also known as the Report on Company Activities and Property (ROCAP). The ROCAP is a snapshot in time as at the date of our appointment of the assets and liabilities of the Company, disclosing book values and the Director’s opinion on the estimated realisable value (ERV) for assets. Below is a summary of the assets and liabilities of the Company, and comparison to the ROCAP as provided by the Director and liquidators’ ERV.

Description Note ROCAP ERV Liquidators ERV

Available Assets

Cash 1 - -

Sub total - -

Less Liabilities

Secured creditors 2 - (1,188)

Employee entitlements

3 (95,000) (2,000)

Unsecured creditors 4 (509,380) (541,390)

Sub total (604,380) (544,578)

Total deficiency (604,380) (544,578)

Notes

1. Cash.

The Director’s ROCAP indicated that the Company held a bank account, however did not advise the value of funds held, if any, in that bank account. As part of our preliminary investigations, we have written to the major Australian banks and other banking institutions notifying them of our appointment as liquidators of the Company.

We note the bank account held by the Company was with St George Banking Group Limited (St George). At the date of our appointment, this account had been overdrawn by $3,643.

To date we have not recovered any funds from bank accounts held by the Company and we are not aware of any further accounts held by the Company.

2. Secured creditors

The Director’s ROCAP did not identify any secured creditors of the Company. As part of our preliminary investigations, we have performed searches of the Company including a search of the Personal Property Securities Register (PPSR).

A PPSR search at the date of appointment identified two registrations against the Company. We have written to both secured creditors notifying them of our appointment as liquidators of the Company.


We note that one of the secured creditors has discharged the Company’s PPSR and the Company no longer has a liability with this creditor. The other secured creditor has provided documentation to support their claim. At this stage we have not assessed the validity of their claim of $1,188.

3. Employee entitlements

The Director’s ROCAP indicated that at the date of our appointment the Company had outstanding wage obligations payable to an employee totaling $95,000. We have not received a proof of debt from this employee to date.

There are insufficient employee records held by the Company to make an assessment on the validity of outstanding employee entitlements. We do note, however, that the employee is considered an excluded employee so a priority claim would be limited to $2,000 with any residual claim considered to be unsecured in the Liquidation.

4. Unsecured creditors

The Director’s ROCAP indicated that the Company had approximately 160 unsecured creditors totaling $509,380 at the date of our appointment. To date we have received proof of debts from 48 creditors totaling $259,010. At this stage unsecured creditor claims in the liquidation total $541,390. We note that the creditor balance may increase as further proofs of debts are received during the liquidation.

Receipts and Payments to date

Attached at Appendix A are details of all receipts and payments in the liquidation to date.

Investigations and recovery actions

Investigations undertaken

We have commenced our initial investigations into the affairs of the Company prior to our appointment and any potential recovery actions that may be available to the Joint and Several Liquidators to pursue. To date, we have undertaken the following investigations: Contacted major banks to obtain details of any accounts; Requested completion and reviewed the Director’s ROCAP; Detailed review and analysis of the limited available records of the Company; Conducted searches of the Australian Business Register and Australian Securities and Investment

Commission (current and historical searched for the Company and Director); Engaged with the Company’s Director; and Liaised with various creditors of the Company.

Our findings from these investigations are detailed below. Given the limited time that has passed in the liquidation, and that further investigations may be undertaken, the below findings are preliminary and may be subject to change.

What happened to the business of the Company

The Company was incorporated on 17 January 2014 and operated from the Director’s home. The Company operated as an online platform facilitating bathroom fixture manufacturers to sell their products directly to customers.

The Director has stated the following reasons for the Company's financial difficulties and the ultimate need to have the Company wound up:


The Company did not own or hold any of the stock sold to customers and was not responsible for inspecting any stock before it was dispatched. While this allowed the Company to offer a more competitive price, it meant that they had no control over the order packing and handling. Consequently, excessive damages to products became a major problem for the Company. The Company felt as though suppliers were taking advantage of the business model and sending faulty stock to customers.

Damage to products would also be caused in transit by couriers and as the stock was directly picked up from the manufacturers the Company was unable to prove that damaged was caused in transit rather than prior to be collected by the Courier.

Manufacturers showcasing their products on the Company’s website commenced their own retail and wholesale businesses which consequently became competitors of the Company.

Excessive number of customer chargebacks due to a change of mind which caused losses for the Company and regular cash flow issues.

Many of the Company’s customers were located in rural Australia which was difficult to service. The Company would often be overcharged by couriers with redelivery charges when customers were not home or did not sign for items. As the Company became busier this problem became more prominent.

Disgruntled customers leaving reviews over multiple online platforms which the Company was unable to identify and resolve. Such reviews lead to bank chargebacks and refund requests after orders were placed which caused a downturn in business both in cashflow.

The poor economic conditions in the renovation market meant the Company had to spend more money on marketing to achieve a sustainable level of sales which further added to lack of profitability.

The Company was victim of ‘Clickfraud’ as Google adwords were the only form of marketing used by the Company which were being exploited causing higher marketing costs. The Company engaged a third party internet security Company to overcome the threat where possible, however this did not eliminate all fraud activity.

Our investigations into the affairs of the Company, indicate that the Company's difficulties were most likely brought about by reasons identified by the Director. In addition, we also note the following affected the Company’s viability:

Poor financial control including lack of books records; and Poor strategic management of business.

Insolvent trading

As we only have limited books and records of the Company, we have been unable to properly review the historical financial position of the Company and determine whether the Company was trading whilst insolvent at any given time.

Given the lack of records we have relied on the presumption of insolvency under section 588E of the Corporations Act 2001 (‘the Act’). Relying on the presumption of insolvency, the Company was insolvent from at least December 2017 and consequently, a potential claim against the Director for insolvent trading is estimated to be at least $541,390, being the total unsecured creditor claims in the Liquidation to date. We note that this amount is subject to change with further proof of debts likely to be received in the Liquidation.


Voidable transactions

We have identified a potential claim against the Director for unreasonable director-related transactions. Our preliminary investigations disclose that in the three months prior to the date of the liquidation, the Director made personal payments using funds from the Company’s bank account totaling approximately $60,000.

Further investigation into this potential claim is required to identify all funds drawn from the Company’s bank account that would satisfy the ‘unreasonableness’ test for the period from 18 December 2014 to 18 December 2018. We note the Director’s entitlement to wages and other employee entitlements in the amount of $50,000 to $80,000 per annum will also be considered. Our preliminary investigation did not identify any direct payments to the Director for employee entitlements, hence the Director may have a counter claim to any potential claim we may be able to bring against him for Company funds he received.

We have not identified any recoverable unfair preference claims, uncommercial transactions, or unfair loans.

Director’s capacity to pay

A search of the NSW Land Title Office database indicates the Director does not own any property in his own name and hence we are unable to determine the Director’s ability to pay any judgement obtained against him. Further, we note that a statutory declaration of the Director’s personal assets and liabilities has been requested but we are yet to receive a response to date.

Estimated cost of liquidation

At this stage we estimate that we would need at least $50,000 to conduct our further investigations which would likely include a public examination of the Director.

Further investigations

Our further investigation into any potential insolvent trading and unreasonable director-related transaction claims will be limited due to a lack of funding. If funding is available, we would focus on the following: Gathering evidence to support the date of insolvency; Quantifying the value of any potential claim; Assessing the Director’s personal capacity to pay any successful judgement awarded in our favour;

and Obtaining legal advice if appropriate, on the merit and cost to pursue the claim.

Request for funding

As there limited available funds in the Liquidation we invite creditors to fund us to cover this cost. Creditors are invited to register their interest in writing to this office by 4pm on 1 April 2019.

If we are without funding to fully pursue all of the potential claims identified, we expect the Liquidation will be finalised with the next 3 months.

Likelihood of a dividend At the current time, there is not expected to be sufficient funds to pay a dividend to priority or unsecured creditors. However, if this changes and we do declare a dividend, any creditor whose claim has not yet been admitted will be contacted and asked to submit a proof of debt.

The likelihood of a dividend being paid to creditors will be affected by a number of factors including:


The size and complexity of the administration.

The amount of assets realisable and the costs of realising those assets.

The statutory priority of certain claims and costs.

The value of various classes of claims including secured, priority and unsecured creditor claims.

The volume of enquiries by creditors and other stakeholders.

Cost of the liquidation Attached at Appendix B is a detailed report on our remuneration, called a Remuneration Approval Report. We are unable to pay our remuneration without the approval of creditors or the court. We are seeking creditor approval of our remuneration to date and estimated future remuneration by a proposal without a meeting.

To participate in the proposal, please complete and return the following by no later than 1 April 2019:

The “proposal without a meeting” forms which are included at Appendix C; and

The “proof of debt” form included at Appendix D which provides information about what the company owes you, along with supporting documents for your claim (if not returned previously).

The documents can be scanned and emailed to [email protected] or returned via post to our firm’s address, attention Emily Cramp. If you choose to return these documents via post, please ensure that you allow enough time for us to receive them by the due date.

An information sheet on “proposals without a meeting” is included at Appendix F. As previously advised in our initial information to creditors, we have estimated that our total remuneration for the liquidation is $25,000.00 (excl GST).

What happens next in the liquidation? If we are without funding to fully pursue all of the potential claim identified, we expect the Liquidation will be finalised with the next 3 months.

We will proceed with the liquidation, including:

Completing our investigations into the Company’s affairs; and

Completing our reporting to the corporate insolvency regulator, ASIC.

If we receive a request for a meeting that complies with the guidelines set out in the initial information provided to you, we will hold a meeting of creditors.

We may write to you again with further information on the progress of the liquidation.

Compliance with best practice We confirm that this report complies with the requirements in the Insolvency Practice Rules (IPR), specifically IPR 70-40, as well as the statements of best practice issued by the Australian Restructuring Insolvency and Turnaround Association (ARITA) with regard to content of the Statutory Report by Liquidator and the Code of Professional Practice with regard to remuneration.


What to do next You should now:

Read our report and attached information. Determine if and how you are going to vote on the proposal. Complete and return your proposal voting form and proof of debt by 1 April 2019

Should you require explanation or assistance in completion of forms please do not hesitate to contact contact Emily Cramp of our office on +61 2 8297 2679 or via email on [email protected].

Where can you get more information? You can access information which may assist you on the following websites:

1 ARITA at www.arita.com.au/creditors

2 ASIC at www.asic.giv.au (search for “insolvency information sheets”).

Should you have any queries with respect to the above, you may also contact Emily Cramp of our office on +61 2 8297 2679 or via email on [email protected]. There is also information about this liquidation on our firm’s website https://www.grantthornton.com.au/creditorsinformation.

Dated: 6 March 2019

Yours faithfully

John McInerney Joint and Several Liquidator

List of attachments

Appendix A - Joint and Several Liquidators’ receipts and payments

Appendix B - Remuneration Approval Report

Appendix C - Proposal without a meeting

Appendix D - Proof of Debt

Appendix E – Information Sheet for Proposals without a Meeting


Joint and Several Liquidators’ receipts and payments

($) Receipts Director contribution to the liquidation of the Company 15,350.00 Total receipts 15,350.00 Payments None 0.00 Net receipts / (payments 15,350.00

Appendix A


Remuneration Approval Report

Appendix B

Remuneration Approval Report BATHROOM TRADE SHED PTY LTD (IN LIQUIDATION) ACN 167 608 451 (“the Company”)

Report title 1

This remuneration approval report provides you with the information you need to be able to make an informed decision regarding the approval of our remuneration for undertaking the Creditors Voluntary Liquidation of Bathroom Trade Shed Pty Ltd.

This report has the following information included:

Part 1: Declaration 3

Part 2: Executive Summary 3

Part 3. Remuneration 3

3.1 Remuneration claim resolutions 3

3.2 Details of remuneration 4

3.3 Total remuneration reconciliation 6

3.4 Likely impact on dividends 6

Part 4: Disbursements 7

Part 5: Queries 7

Schedule 1 – Resolution 1 Table of major tasks for remuneration 8

Schedule 2 – Resolution 2 Table of major tasks for remuneration 10

Contents

Report title 2

You should read this report and the other documentation that we have sent you.

To minimise the costs in this Creditors Voluntary Liquidation, we have elected to seek the approval of creditors for our remuneration and internal disbursements without a meeting. Information about the proposals without a meeting process is included in the Statutory Report to Creditors.

You can cast your vote by using the included voting forms. These forms then need to be returned to our office by post, scanned and emailed or faxed. We need to receive your forms by 4pm on Friday, 1 April 2019 for your vote to count. If you chose to use post, please allow enough time for your letter to be delivered.

If you have any questions, or need any assistance with understanding the materials we have sent to you, please contact Emily Cramp on +61 2 8297 2679 or via email on [email protected].

What do you need to do next?

Report title 3

Part 1: Declaration Philip Campbell-Wilson and I, John McInerney of Grant Thornton Australia Limited have undertaken a proper assessment of this remuneration claim for our appointment as Joint and Several Liquidators of Bathroom Trade Shed Pty Ltd in accordance with the law and applicable professional standards. We are satisfied that the remuneration claimed is in respect of necessary work, properly performed, or to be properly performed, in the conduct of the Creditors Voluntary Liquidation.

Part 2: Executive Summary The total remuneration for this appointment is estimated to be $25,000 (excluding GST). This is consistent with our previous estimated total remuneration.

Remuneration currently claimed is summarised below:

Period Report Reference

Amount (ex GST)

Current Remuneration claim:

Creditors Voluntary Liquidation

Resolution 1: 18 December 2018 to 24 February 2019 Sch 1 $15,430.50

Resolution 2: 25 February 2019 to completion of Liquidation Sch 2 $9,569.50

Total – Creditors Voluntary Liquidation $25,000.00

TOTAL remuneration claimed and approved $25,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration. Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors.

Please refer to report section references detailed in the above table for full details of the calculation and composition of the remuneration approval sought.

Part 3. Remuneration 3.1 Remuneration claim resolutions

We will be seeking approval of the following resolutions to approve our remuneration. Details to support these resolutions are included in section 3.2 and in the attached Schedules.

Resolution 1 from 18 December 2018 to 24 February 2019: “That the remuneration of the Joint and Several Liquidators, their partners and staff, for the period from appointment to 24 February 2019, calculated at the hours spent at the rates detailed in the Initial Remuneration Notice provided to creditors, is approved for payment in the amount of $15,430.50, exclusive of GST, to be drawn from available funds immediately or as funds become available.”

Resolution 2 from 25 February 2019 to finalisation: “That the future remuneration of the Joint and Several Liquidators for the period from 25 February 2019 to finalisation of the Creditors Voluntary Liquidation, is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration Notice dated 20 December 2018 provided to creditors, up to a capped amount of $9,569.50, exclusive of GST, and that the Joint and Several Liquidators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available”

Report title 4

3.2 Details of remuneration

The basis of calculating the remuneration claims are summarised below and the details of the major tasks performed and the costs associated with each of those major tasks are contained in Schedules 1 to 2.

Resolution 1 from 18 December 2018 to 24 February 2019: “That the remuneration of the Joint and Several Liquidators, their partners and staff, for the period from appointment to 24 February 2019, calculated at the hours spent at the rates detailed in the Initial Remuneration Notice provided to creditors, is approved for payment in the amount of $15,430.50, exclusive of GST, to be drawn from available funds immediately or as funds become available.”

The following table sets out time charged to each major task area by staff members working on the Creditors Voluntary Liquidation for the period 18 December 2018 to 24 February 2019 which is the basis of the Resolution 1 claim. More detailed descriptions of the tasks performed within each task area, matching the amounts below, are contained in Schedule 1.

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Report title 6

Resolution 2 from 25 February 2019 to finalisation: “That the future remuneration of the Joint and Several Liquidators for the period from 25 February 2019 to finalisation of the Creditors Voluntary Liquidation, is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration Notice dated 20 December 2018 provided to creditors, up to a capped amount of $9,569.50, exclusive of GST, and that the Joint and Several Liquidators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available”

The below table sets out the expected costs for the major tasks likely to be performed by the Joint and Several Liquidators and our staff for the period 25 February 2019 to finalisation of the Creditors Voluntary Liquidation which is the basis of the Resolution 2 claim. More detailed descriptions of the tasks likely to be performed within each task area, matching the amounts below, are contained in Schedule 2.

Total ($) Task Area

Creditors Investigation Administration Statutory Total (est) $9,569.50 $3,197.94 $1,406.22 $2,465.69 $2,499.65 GST $956.95 $319.79 $140.62 $246.57 $249.97 Total (incl GST) $10,526.45 $3,517.74 $1,546.84 $2,712.26 $2,749.62

3.3 Total remuneration reconciliation

At this point in time we estimate that the total remuneration for this Creditors Voluntary Liquidation will be $25,000.00 which is in line with the approval amount being sought. This is subject to the following variables which may have a significant effect on this estimate and that we are as yet unable to determine:

Liquidation taking longer than 3 months to finalise.

Further investigations.

Pursuit of claims against the Director of the Company.

High volume of creditor enquiries.

This is consistent with the estimate provided in the Initial Remuneration Notice dated 20 December 2018 which estimated remuneration of $25,000.00 (excluding GST).

We have provided an explanation of tasks remaining to be completed, including our estimated costs to complete those tasks, to support our current remuneration approval request, in Schedule 2.

In preparing this remuneration approval report, we have made our best estimate at what we believe the Creditors Voluntary Liquidation will cost to complete and we do not anticipate that we will have to ask creditors to approve any further remuneration. However, should the Creditors Voluntary Liquidation not proceed as expected, we will advise creditors and we may seek approval of further remuneration and provide details on why the remuneration has changed.

3.4 Likely impact on dividends

The Corporations Act sets the order for payment of claims against the company and it provides for remuneration of the Joint and Several Liquidators to be paid in priority to other claims. This ensures that when there are sufficient funds, the Joint and Several Liquidators receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds. Even if creditors approve our remuneration, this does not guarantee that we will be paid, as we are only paid if sufficient assets are recovered.

Report title 7

Any dividend to creditors will also be impacted by the amount of assets that we are able to recover and the amount of creditor claims that are admitted to participate in any dividend, including any claims by priority creditors such as employees.

At this stage there are not expected to be sufficient funds to pay a dividend to unsecured creditors. However, should any additional information regarding the affairs of the Company become available subsequent to the date of this report we will further investigate any potential recoveries to enable a distribution to be made to unsecured creditors. If we do declare a dividend, any creditor whose claim has not yet been admitted will be contacted and asked to submit a proof of debt.

Part 4: Disbursements Disbursements are divided into three types:

Externally provided professional services - these are recovered at cost. An example of an externally provided professional service disbursement is legal fees.

Externally provided non-professional costs - these are recovered at cost. Examples of externally provided non-professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis. Details of the basis of recovery of each of these costs is discussed below.

We have undertaken a proper assessment of disbursements claimed for Bathroom Trade Shed Pty Ltd in accordance with the law and applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper.

We do not intend on obtaining approval for internal disbursements.

Part 5: Queries If you have any queries in relation to the information in this report, please contact Emily Cramp of our office on 02 8297 2679, or by email on [email protected]

You can also access information which may assist you on the following websites:

ARITA at www.arita.com.au/creditors

ASIC at www.asic.giv.au (search for “insolvency information sheets”).

Report title 8

Schedule 1 – Resolution 1 Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period 18 December 2018 to 24 February 2019.

Task Area General Description Includes

Assets 0.7 hours $308.50

Assets subject to specific charges

All tasks associated with realising a charged asset

Creditors 36.0 hours $10,466.00

Creditor Enquiries, Requests & Directions

Receive and respond to creditor enquiries Maintaining creditor request log Review and prepare initial correspondence to creditors and their representatives Considering reasonableness of creditor requests Compiling information requested by creditors

Secured creditor reporting Notifying PPSR registered creditors of appointment Responding to secured creditor’s queries

Creditor reports Preparing Statutory Report by Liquidator

Dealing with proofs of debt Receipting and filing POD when not related to a dividend Corresponding with OSR and ATO regarding POD when not related to a dividend

Investigation 7.4 hours $2,365.00

Conducting investigation Collection of company books and records Reviewing company’s books and records Review and preparation of company nature and history Conducting and summarising statutory searches Preparation of deficiency statement Review of specific transactions Preparation of investigation file

ASIC reporting Preparing statutory investigation reports

Administration 3.5 hours $1,040.50

Document maintenance/file review/checklist

First month administration reviews Filing of documents Updating checklists

Insurance Identification of potential issues requiring attention of insurance specialists Correspondence with insurer regarding initial and ongoing insurance requirements

Bank account administration Preparing correspondence opening accounts Requesting bank statements Bank account reconciliations

Finalisation Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists

Report title 9

Task Area General Description Includes Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage Dealing with records in storage Sending job files to storage

Statutory 3.6 hours $1,250.50

ASIC Form 524 and other forms Correspondence with ASIC regarding statutory forms

ATO and other statutory reporting

Notification of appointment Preparing BAS

Report title 10

Schedule 2 – Resolution 2 Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period 25 February 2018 to finalisation of the Creditors’ Voluntary Liquidation.

Task Area General Description Includes

Creditors 10 hours $3,197.90

Creditor Enquiries, Requests & Directions

Receive and respond to creditor enquiries Maintaining creditor request log Considering reasonableness of creditor requests Documenting reasons for complying or not complying with requests or directions Compiling information requested by creditors

Secured creditor reporting Responding to secured creditor’s queries

Creditor reports Finalising Statutory Report by Liquidator

Dealing with proofs of debt Receipting and filing POD when not related to a dividend

Proposals to Creditors Preparing proposal notices and voting forms Forward notice of proposal to all known creditors Reviewing votes and determining outcome of proposal Preparation and lodgement of proposal outcome with ASIC

Investigation 4 hours $1,406.22

Conducting investigation Lodgement of investigation with the ASIC Preparation and lodgement of supplementary report if required

ASIC reporting Preparing statutory investigation reports Liaising with ASIC

Administration 7.6 hours $2,465.69

Document maintenance/file review/checklist

Filing of documents File reviews Updating checklists

Bank account administration Preparing correspondence closing accounts Bank account reconciliations

Finalisation Notifying ATO of finalisation Cancelling ABN / GST / PAYG registration Completing checklists Finalising WIP

Planning / Review Discussions regarding status of administration

Statutory 6.6 hours $2,499.65

ASIC Form 524 and other forms Preparing and lodging ASIC forms Correspondence with ASIC regarding statutory forms

ATO and other statutory reporting

Preparing BAS

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Proposal without a meeting

Appendix C

6 March 2019

NOTICE OF PROPOSAL TO CREDITORS Bathroom Trade Shed Pty Ltd (In Liquidation) ACN 167 608 451 (“the Company”)

Proposal for creditor approval

“That the remuneration of the Joint and Several Liquidators, their partners and staff, for the period from appointment to 24 February 2019, calculated at the hours spent at the rates detailed in the Initial Remuneration Notice provided to creditors, is approved for payment in the amount of $15,430.50, exclusive of GST, to be drawn from available funds immediately or as funds become available.”

Reasons for the proposal and the likely impact it will have on creditors if it is passed

The proposal is being put to creditors to approve remuneration as allowed under law. The proposal if passed will minimise the cost of approving remuneration to the Creditors Voluntary Liquidation, which would otherwise require a meeting of creditors or court application to be approved – which can be costly.

Remuneration of the Liquidators is to be paid in priority to other claims under the Corporations Act. This ensures that when there are sufficient funds, the Liquidators receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds. Even if creditors approve my remuneration, this does not guarantee that I will be paid, as I am only paid if sufficient assets are recovered.

If sufficient assets are recovered, there may be funds available to pay a dividend to creditors, however this is affected by many variables including the value of assets and complexity of realising those assets, the level of creditor enquiries, the priority of claims (including employee claims) and the total value of creditor claims to be admitted to participate in a dividend.

My remuneration approval report, which has been provided with this notice provides more detailed information on the remuneration I am seeking to be approved.

Vote on proposal

Creditors have the option of approving, not approving or objecting to the proposal being resolved without a meeting of creditors. Please select the appropriate Yes, No or Object box referred to below:

Yes I approve the proposal No I do not approve the proposal

Object I object to the proposal being resolved without a meeting of creditors Your claim against the Company must be admitted for the purposes of voting by the Creditors Voluntary Liquidation for your vote to count. Please select the option that applies:

I have previously submitted a proof of debt form and supporting documents

I have enclosed a proof of debt form and supporting documents with this proposal form

Creditor details Name of creditor: ACN / ABN (if applicable):

I am not a related creditor of the Company.

I am a related creditor of the Company, relationship: .

Address: __________________________________________________________________________________

Name of creditor / authorised person: __________________________________________________

Signature: _____________________________ Date:__________________________

Please complete this document and return with any supporting documents by no later than 4.00 PM on 1 April 2019 for your vote to be counted, by email to Emily Cramp at [email protected]. If you have any questions please call +61 2 8297 2679. Completed forms may also be sent by post attention to Emily Cramp at Locked Bag Q800, QVB Post Office, Sydney NSW 1230, although you should ensure this is sent with sufficient time to arrive by the date the vote closes, which we cannot guarantee.

6 March 2019



“That the future remuneration of the Joint and Several Liquidators for the period from 25 February 2019 to finalisation of the Creditors Voluntary Liquidation, is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their partners and staff, calculated at the hourly rates as detailed in the Initial Remuneration Notice dated 20 December 2018 provided to creditors, up to a capped amount of $9,569.50, exclusive of GST, and that the Joint and Several Liquidators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available”


The proposal is being put to creditors to approve remuneration as allowed under law. The proposal if passed will minimise the cost of approving remuneration to the Creditors Voluntary Liquidation, which would otherwise require a meeting of creditors or court application to be approved – which can be costly.

Remuneration of the Liquidators is to be paid in priority to other claims under the Corporations Act. This ensures that when there are sufficient funds, the Liquidators receives payment for the work done to recover assets, investigate the company’s affairs, report to creditors and ASIC and distribute any available funds. Even if creditors approve my remuneration, this does not guarantee that I will be paid, as I am only paid if sufficient assets are recovered.

If sufficient assets are recovered, there may be funds available to pay a dividend to creditors, however this is affected by many variables including the value of assets and complexity of realising those assets, the level of creditor enquiries, the priority of claims (including employee claims) and the total value of creditor claims to be admitted to participate in a dividend.

My remuneration approval report, which has been provided with this notice provides more detailed information on the remuneration I am seeking to be approved.

Vote on proposal









Address: __________________________________________________________________________________


Signature: _____________________________ Date:__________________________


6 March 2019



"That the creditors direct the Liquidator to apply to ASIC when appropriate or upon finalisation of the liquidation for consent to destroy books within the retention period in accordance with IPS 70-35.”


The proposal is being put to creditors to allow records to be destroyed upon finalisation of the liquidation, with ASIC consent. Liquidators are otherwise required to maintain all books for 5 years which represents a significant cost to the liquidation.

By passing the proposal, and subject to ASIC’s consent, much of this cost can be avoided. The Liquidator will still retain information, and notably financial information, required to be retained for certain periods under other laws, e.g. taxation laws.

Vote on proposal









Address: __________________________________________________________________________________


Signature: _____________________________ Date:__________________________


Proof of Debt

Appendix D

FORM 535 subregulation 5.6.49(2)

Corporations Act 2001 FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM)

To the Joint and Several Liquidators of Bathroom Trade Shed Pty Limited (In Liquidation) ACN 167 608 451 (“the Company”),

1. This is to state that the Company was on 18 December 2018, and still is, justly and truly indebted to:

(full name, ABN and address of the creditor and, if

applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a description of the

occupation of the creditor) for dollars and cents

Particulars of the debt are:

Date Consideration Amount $ Remarks (state how the debt arose) (include details of voucher substantiating

payment)

2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any

satisfaction or security for the sum or any part of it except for the following:

(insert particulars of all securities held. If the securities are on the property of the company, assess the value of those

securities. If any bills or other negotiable securities are held, show them in a schedule in the following form).

Date Drawer Acceptor Amount $ Due Date

3. Signed by (select option):

I am the creditor personally.

I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied.

I am the creditor's agent authorised in writing to make this statement in writing. I know the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied.

Signature: Dated:

Name: Occupation:

Address:

RECEIVE REPORTS BY EMAIL Yes No

Do you wish to receive all future reports and correspondence from our office via email?

Email:……………………………………………………………………………

[Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389] ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation.

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Information Sheet for Proposals without a Meeting

Appendix E

ARITA ACN 002 472 362

Level 5, 191 Clarence Street, Sydney NSW 2000 Australia | GPO Box 4340, Sydney NSW 2001 t +61 2 8004 4344 | e [email protected] | arita.com.au

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

Information sheet: Proposals without meetings

You may be a creditor in a liquidation, voluntary administration or deed of company arrangement (collectively referred to as an external administration).

You have been asked by the liquidator, voluntary administrator or deed administrator (collectively referred to as an external administrator) to consider passing a proposal without a meeting.

This information sheet is to assist you with understanding what a proposal without a meeting is and what your rights as a creditor are.

Meetings of creditors were previously the only way that external administrators could obtain the views of the body of creditors. However, meetings can be very expensive to hold.

A proposal without a meeting is a cost effective way for the external administrator to obtain the consent of creditors to a particular course of action.

The external administrator is able to put a range of proposals to creditors by giving notice in writing to the creditors. There is a restriction under the law that each notice can only contain a single proposal. However, the external administrator can send more than one notice at any single time.

The notice must:

include a statement of the reasons for the proposal and the likely impact it will have on creditors if it is passed

invite the creditor to either: o vote yes or no to the proposal, or o object to the proposal being resolved without a meeting, and

specify a period of at least 15 business days for replies to be received by the external administrator.

If you wish to vote or object, you will also need to lodge a Proof of Debt (POD) to substantiate your claim in the external administration. The external administrator will provide you with a POD to complete. You should ensure that you also provide documentation to support your claim.

If you have already lodged a POD in this external administration, you do not need to lodge another one.

The external administrator must also provide you with enough information for you to be able to make an informed decision on how to cast your vote on the proposal. With some types of proposals, the law or ARITA’s Code of Professional Practice sets requirements for the information that you must be provided.

What types of proposals can be put to creditors?

What information must the notice contain?

What is a proposal without a meeting?

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

22302 - INFO - Proposals information sheet v1_0.docx Version: July 2017

For example, if the external administrator is asking you to approve remuneration, you will be provided with a Remuneration Approval Report, which will provide you with detailed information about how the external administrator’s remuneration for undertaking the external administration has been calculated.

You can choose to vote yes, no or object to the proposal being resolved without a meeting.

A resolution will be passed if more than 50% in number and 50% in value (of those creditors who did vote) voted in favour of the proposal, but only so long as not more than 25% in value objected to the proposal being resolved without a meeting.

If the proposal doesn’t pass and an objection is not received, the external administrator can choose to amend the proposal and ask creditors to consider it again or the external administrator can choose to hold a meeting of creditors to consider the proposal.

The external administrator may also be able to go to Court to seek approval.

If more than 25% in value of creditors responding to the proposal object to the proposal being resolved without a meeting, the proposal will not pass even if the required majority vote yes. The external administrator will also be unable to put the proposal to creditors again without a meeting.

You should be aware that if you choose to object, there will be additional costs associated with convening a meeting of creditors or the external administrator seeking the approval of the Court. This cost will normally be paid from the available assets in the external administration.

This is an important power and you should ensure that it is used appropriately.

The Australian Restructuring Insolvency and Turnaround Association (ARITA) provides information to assist creditors with understanding external administrations and insolvency.

This information is available from ARITA’s website at artia.com.au/creditors.

ASIC also provides information sheets on a range of insolvency topics. These information sheets can be accessed on ASIC’s website at asic.gov.au (search for “insolvency information sheets”).

What are your options if you are asked to vote on a proposal without a meeting?

What happens if the proposal doesn’t pass?

What happens if I object to the proposal being resolved without a meeting?

Where can I get more information?

How is a resolution passed?

[Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389] ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation.

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