Collapsed corporate debt balloons up to $124m

The company went under last month, leaving its workforce $1 million short and hundreds of people affected across Australia.

The debt of an Australian investment company that collapsed late last month has risen from an estimated $70 million to a staggering $124 million, liquidators have revealed.

The company called REMI Capital, was placed in voluntary administration on May 25, with Chris Baskerville of specialist insolvency firm Jirsch Sutherland appointed as administrator.

At the first creditors’ meeting held Monday, the liquidator’s report found that of the $124 million in outstanding debt, $1 million was owed to employees and $62 million to unsecured creditors.

Meanwhile, 433 affected investors have been identified across Australia.

This included 259 investors in Victoria, 110 in Queensland, 43 in New South Wales, eight in Western Australia and Tasmania and a handful in South Australia and the NT.

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The trustee’s preliminary investigation also revealed that $6 million was owed to the Australian tax authorities and other regulatory authorities and that there was $30 million in debt for loans from related entities.

The independent investment firm had promised access to “responsibly and ethically managed investments” and included a series of boutique developments, showing its website before shutting down after the collapse.

One of the 433 investors affected was a Melbourne father of two, who was left “shocked” and “heartbroken” after REMI Capital collapsed owes his family $300,000

“This is heartbreaking. I go home at the end of the day and both my wife and I are in tears as we drive home separately from work,” *Richard told at the time.

“It’s very emotional, it’s impacting my relationship with my wife.

“This is torture. We don’t know how long this will last.”

A great email leaked to revealed the extent of the company’s problems well before it went bankrupt.

Peter Kral, chief financial officer at REMI Capital, sent the email on March 25, stating that the company had experienced “several delays in making” repayments in recent months.

He said the company “proposed you a payment plan for the amounts owed” and blamed a number of factors for the delays, including “forfeiture of loan/money repayments by third parties to Remi totaling approximately $4 million. (Aus) expected to be repaid to Remi late last/early this year”.

The email also revealed that real estate sales were “time-consuming and prone to significant delays” and that there was a “failure of promised funding to effect settlement and unlock existing equity within ongoing projects.”

There is no suggestion of any wrongdoing by Mr. Kral.

After the creditor’s meeting, Richard said it was “disappointing” to hear about the amount of the debt and that he still didn’t know if his $300,000 would be repaid. His wife was very upset, he added.

“It’s a lifelong effect on us. It breaks our relationship. I’m not sure how the relationship with my wife will go,” he said.

“We have gone from financial freedom to financial prison. My wife is upset I couldn’t see this was a (problem) but it was backed by real estate and everything looked legit but now it’s seriously collapsed… and there’s no investor protection.”

Following the collapse, Mark Prestige, who was a managing partner at REMI Capital for nearly four years, acknowledged that there had been a “lack of communication” from the company in recent weeks.

“Remi had been advised in recent weeks by an outside legal counsel not to communicate until the modeling that made this difficult decision possible was completed,” he wrote in an email addressed to investors, shareholders and ex-employees.

“REMI apologizes for any lack of communication over the past few weeks. We ask that you rely on reports to creditors and not on speculation you may hear.”

The manager’s report found that Mr. Prestige had “written” $45 million in funds while he was a managing partner and Peter Terrill, who was previously a director of the company, also when it was known as C2 Capital, had $83 million. .

When appointed as administrator, Mr. Baskerville said one solution was a Deed of Company Arrangement (DoCA) proposed by the directors.

According to the Australian Securities & Investments Commission, a DoCA seeks to maximize the company’s chances of survival and aims to provide creditors with better returns than an immediate liquidation of the company.

REMI owned two properties and had an option to buy another, the administrators found.

Mr Baskerville said current options being explored include undertaking a marketing campaign to sell the properties in situ or seeking a refinancing package.

* Name has been changed

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