A group of Companies developing local boutique accommodation have gone into voluntary administration because they are no longer financially viable leaving a number of local properties in limbo.
Cor Cordis have been appointed as Administrators for Camp St Daylesford Pty Ltd, Lipilli La Mt Buninyong Pty Ltd and Main & Camp Daylesford Pty Ltd.
The properties owned by the Companies include:
- 117 Main Road, Hepburn Springs
- 121 Main Road Hepburn Springs
- 125 Main Road Hepburn Springs
- 19A Camp Street Daylesford
In their report to the creditors, the Administrators say that the Companies required $4 to $8million in additional investment to proceed to the next stages of their projects.  Their financial model for the projects had been based on the involvement of  a Director who has experience running a boutique accommodation business with reported high occupancy rates and low operating costs.
The Administrators report that when the Director withdrew from the Companies alternative boutique accommodation operators were approached to trade and manage the completed accommodation units. However these operators thought the occupancy rates would be much lower and the operating costs much higher than the original financial model.
When the remaining Directors were unable to engage an alternative boutique accommodation operator to achieve the commercial results originally planned, the Administrators report that they saw no other option but to place the Companies into Voluntary Administration.
The Administrators also report that it is their preliminary view that the companies may have been insolvent prior to going into administration, which may expose the Directors and former Director to Liquidator claims for insolvent trading if the Companies are placed into liquidation.
The Administrators  have also indicated that it is their preliminary view that there may be voidable transactions that could result in money, property or other benefits being recovered for Creditors. These include potential unfair preferences, uncommercial transactions and unreasonable director related transactions.
In one instance a property was bought from an entity associated with the former Director for $1.1 million eight months after it had been purchased for $750,000.
The Directors of the Companies have queried the administrators preliminary view on insolvency and insolvent trading. The Administrators note that their investigations are not yet complete.
The Administrators are liaising with mortgagees and reviewing agent sale proposals. The church property at 19a Camp St, which has received significant damage, has now been secured and temporary fencing has been erected to prevent entry to the property.
Meetings with creditors have been convened and discussions with Directors and the former Director have been held in relation to the administration of the Companies.
It is the Administrators’ opinion that the companies should be wound up because they are insolvent, in which case, the Administrators would become the Liquidators of the Companies. At that point they would also investigate, and if appropriate, commence recovery proceedings.
Related stories:
Historic St Andrew’s in Limbo as Damage Mounts and Mortgagee Takes Control
