Experts with Impact in Going Concern Business Sales

Corporate Finance & Restructuring | Financial Institutions

March 31, 2020

Gym

On 19 March 2018 Kelly Trenfield and John Park were appointed replacement Voluntary Administrators of Crusaders Managers Pty Ltd at the first meeting of creditors. Our appointment was supported by the major secured lender. The company, as trustee of the Crusaders Trust, traded a chain of Snap Fitness gyms located in Queensland and the Northern Territory.

Situation

Complexity of the Appointment

There were several complexities to be managed as part of the appointment including:

  • A number of conflicting amendments to the trust deed had been made prior and subsequent to the appointment of voluntary administrators, the effectiveness of which were questionable;
  • Difficulties faced by secured creditors in locating and identifying their assets due to poor records, alleged movement of assets between the gyms, and assets which could not be located;
  • A winding up application by a secured creditor had commenced prior to the appointment. The creditor remained concerned with the administration and applications to extend the convening period and the impact this may have on their security; and
  • Landlords and suppliers with significant preappointment debt were in some instances not supportive of continued occupation or supply.

Our Role

Goals of the Appointment

Upon appointment, it was evident a deed of company arrangement would not be proposed. The best prospect for the business to continue in existence, and to maximise returns to creditors, was by way of a going-concern sale of the gyms either in-one-line or separately. This would enable the continued employment of 45 staff at the time of the administrators’ appointment.


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