Little shine for Sapphire creditors

Brenton Strauss, director of the former business, said the deadline for submitting proof of debts to the company’s administrator, Tony Matthews, was February 27.

Since then, he said, the administrator had been working through the claims to check they matched Sapphire’s records.

“Tony Matthews’ office advised us on April 1 they were satisfied with the proofs and we believe payment will occur in mid-April,” Mr Strauss said.

Farmer-creditor Stuart Ellis, Burrumbeet, near Ballarat in Victoria, said it had been a frustrating wait.

“Initially we were meant to be paid on February 28, then it went back to March 5, and then changed again, so until the money is in our accounts, I’m a little sceptical.”

Mr Strauss conceded the payout process had not run as smoothly as it could have.

“The first payment that was due per the deed of company arrangement was due on February 28, but unbeknown to me and other folks what this meant, in fact, was that unsecured creditors had up until then to lodge, amend or withdraw their proof of debts.

Mr Ellis described the process as “farcical”.

“There seems to have been a lot of leniency shown to Mr Strauss by the administrator.

“We (the creditors) haven’t applied to have a new administrator instated, but it has certainly been considered.”

Mr Ellis said he was pushing the Australian Securities and Investment Commission (ASIC) to investigate the administrative process.

Sapphire collapsed in 2014, with debts of around $10 million. As part of the liquidation process, unsecured creditors were given a deal of 20c in the dollar, paid out in two instalments of 10c.

Mr Ellis said he was frustrated by accounts of Mr Strauss paying selected creditors out in full before the official Sapphire payments were made.

Mr Strauss confirmed he had paid some creditors out in full from interests separate to the former Sapphire.

“I am making sure I am sticking by those people that continue to support me and continue to trade with me.”

“I still plan to pay all my debts in full when I can and this is the start of this process.”

Mr Ellis said it was difficult to see some creditors paid and some not in what he said appeared to be an arbitrary process.

“It really is difficult to see someone get paid in front you just because they live near Mr Strauss or whatever measurement he is using.

“We’d just like to see the official payments in.”

Mr Strauss said he had already transferred 25 per cent of the expected value of the first payment through to Mr Matthews and was in the process of organising the full payment.

“We have sufficient to make the payment in full.”

However, he said there was an issue with the payment of NAB, a secured creditor that needed to be resolved before the payments are made.

“I believe this issue will resolve itself shortly and payments can be made but it is out of my hands and you would need to seek clarification from the administrator,” Mr Strauss said.