The company shrank last month, leaving employees short of $ 1 million and with hundreds of people affected in Australia.
The debt of an Australian investment firm that collapsed late last month has risen from about $ 70 million to $ 124 million, liquidators said.
The company, called REMI Capital, went into voluntary administration on May 25, with Chris Baskerville of the insolvency firm Jirsch Sutherland appointed as director.
At the first creditors’ meeting on Monday, the liquidator’s report showed that of the $ 124 million outstanding debt, $ 1 million was owed to employees and $ 62 million to unsecured creditors.
Meanwhile, 433 affected investors have been identified in 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 and NT Australia.
The administrator’s preliminary investigation also found that $ 6 million was owed to the Australian Tax Office and other statutory bodies and that there was $ 30 million in debt with loans from related entities.
The independent investment company had promised access to “responsibly and ethically managed investments” and included a number of boutique real estate promotions, showcased its website before closing after the collapse.
One of the 433 investors affected was a Melbourne father with two children, who had been left “surprised” and “heartbroken” after REMI Capital collapsed due to his family’s $ 300,000.
“This is heartbreaking. I’m leaving home at the end of the day and both my wife and I are crying separately when we get home from work,” Richard told news.com.au at the time.
“It’s very emotional, it’s affecting my relationship with my wife.
“This is torture. We don’t know how long this will last.”
An email bomb leaked to news.com.au revealed the extent of the company’s problems long before it went into liquidation.
Peter Kral, chief financial officer of 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 was “proposing a plan to pay off the amounts due” and blamed a number of delay factors, such as “confiscation of loan / money repayments by parties outside Remi for a total of about $ 4 million (Birds) was expected to be reimbursed to Remi at the end of last year / beginning of this year. “
The email also revealed that the sale of real estate consumed “time and is prone to significant delays” and there was a “failure of the promised financing to effect the liquidation and unblock the existing capital in the current projects”.
There is no suggestion of any crime on the part of Mr. Kral.
After the creditor meeting, Richard said it was “disappointing” to know about the level of debt and did not yet know if any of his $ 300,000 would be returned. His wife was very upset, he added.
“It’s a lifelong effect with 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 imprisonment. My wife is angry because she couldn’t see that this was a (problem), but she was supported by real estate and everything seemed legitimate, but now it has collapsed badly … and there is no protection for investors. “
Following the collapse, Mark Prestige, who had been a managing partner of REMI Capital for almost four years, acknowledged that there had been a “lack of communication” on the part of the company in recent weeks.
“Remi had received advice from an external legal adviser who had not been contacted in recent weeks until the model that led to this difficult decision had been completed,” he wrote in an email to investors, shareholders and former staff members.
“REMI apologizes for the lack of communication in recent weeks. We urge you to trust creditors’ reports and not rely on any speculation you may hear. “
The administrator’s report showed that Mr. Prestige had $ 45 million in “written” funds while he was a managing partner and Peter Terrill, who was previously a director of the business, including when he was known as C2 Capital, had $ 83 million. of dollars.
When he was appointed administrator, Baskerville said one of the solutions was a Business Arrangement (DoCA) proposed by the directors.
According to the Australian Securities and Investments Commission, a DoCA seeks to maximize the company’s chances of continuing to operate and aims to provide a better return on creditors than an immediate liquidation of the business.
REMI owned two properties and had the option to buy another, administrators found.
Baskerville said the current options being explored include conducting a marketing campaign to sell the properties on site or looking for a refinancing package.
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