Improving returns for creditors and preventing a distressed property sale scenario for a group of entities in regional Victoria.
A group of entities based in Lakes Entrance, Victoria, operated multiple plumbing, paint, and hardware businesses from commercial properties owned within the group. In total, there were five businesses. However, these businesses ceased trading upon our appointment as administrators due to low stock levels and declining sales in the preceding months.
The primary challenge was to decide the best course of action for these businesses and the associated commercial properties. Instead of immediately resorting to a distressed asset sale scenario for both the business assets and the vacant commercial properties, as appointed administrators, Cor Cordis chose to explore alternative options to optimise returns to creditors.
We spent time engaging with the local community in Lakes Entrance, which yielded significant interest from local parties eager to take over the businesses and enter into new lease agreements for the commercial properties. We took a proactive role in overseeing and negotiating asset sales and commercial leases. Independent rental valuations were sought to ensure fair arrangements.
By finding tenants for the commercial properties, we were able to significantly improve the returns for priority and secured creditors, who held a secured debt of approximately $6 million. This approach prevented the need for a distressed property sale scenario in a regional location and contributed to the economic stability of the Lakes Entrance community.