More than 200 former employees of two liquidated companies will be welcoming the great results achieved by Jirsch Sutherland in securing their outstanding employee payments.
Seventy-nine ex-employees of Queensland-based bulk earthworks specialist business Bachmann Plant Hire and around 125 former employees of the Western Australian Kimberley Diamond Company have each recently received 100 cents in the dollar. In addition to receiving individual payments from a pool of circa $1.2 million, Bachmann Plant Hire’s former employees will also be awarded their outstanding superannuation, amounting to nearly $103,000.
“As insolvency specialists, our focus is always on achieving the best result for employees and creditors,” says Jirsch Sutherland Partner Sule Arnautovic. “The employee payment outcome was achieved by trading on the Bachmann Plant Hire business for three to four months in administration, the completion of work in progress and certain contractual obligations, and realising receivables and equipment assets. These employee payments also reduce the burden on the government, as it means staff don’t have to make an application for funds through the Fair Entitlements Guarantee (FEG) scheme.”
The result for Queensland-based Bachmann Plant Hire employees comes less than four months after the company was placed into liquidation, however, the Kimberley Diamond Company (KDC) employees have been waiting for a complete result since July 2015.
The diamond mine was a leading supplier of rare yellow diamonds, which were also sold in Tiffany & Co stores worldwide. When KDC failed to negotiate a price increase with the prestige jeweller and others, Kimberley Diamond Limited’s (ASX: KDL) (KDC’s parent company) share price fell significantly. This along with other factors resulted in KDC being placed into Voluntary Administration in 2015 with outstanding liabilities that included millions of dollars in unpaid wages, creditor debts and environmental rehabilitation costs.
“As KDC had insufficient funds available when it went into liquidation, securing payment for former employees was a complex and protracted matter,” Arnautovic says. “The Federal Government was called upon to meet the company’s payment obligations, which included funding our investigations and litigation by the Department of Employment under FEG.”
In addition to the employee payments, ordinary unsecured creditors of KDC are also expected to receive their partial dividends this financial year. “As with Bachmann Plant Hire, the great result for KDC’s former employees also reduces current funding pressure on the government’s FEG scheme.”