General News
30 October, 2024
Voluntary administrator prepares to update creditors on rodeo debt
SV Partners confirmed a $700,000 shortfall between what Isa Rodeo has in the bank and what it owes.
Creditors will find out where they stand in their pursuit of payments from Isa Rodeo Ltd as voluntary administrator SV Partners conducts its first meeting with them in Mount Isa on Thursday (October 31).
Director Michael Brennan said the purpose of the meeting was to provide an update to creditors and answer any questions.
He said no decision would be made about the future of the rodeo at the initial meeting.
That decision will likely happen on November 25, when the second creditors meeting is scheduled.
“Right now, and I guess it’s step one, is to get the best understanding that we can of the nuts and bolts of the company’s affairs,” Mr Brennan told North West Weekly.
“Step two is we’re inviting expressions of interest from like-minded businesses, partners and locals that want to see the event continue so that we can secure a rodeo delivery partner.
“Effectively, the future of the company is in the hands of the creditors.
“Where it stands at the moment is that there is likely to be a Deed of Company Arrangement put forward to creditors (on November 25) for their consideration and that could include multiple aspects of how the company is to be restructured.
“There, creditors will either put the company into liquidation or they will vote to accept a Deed of Company Arrangement.
“And it’s from that point that the company will either transition into a company subject to a deed or it’ll go into liquidation.
“Obviously, we’re all hoping that it’s a deed and depending on how that deed is structured we’ll be able to make a payment once the deed’s entered into.
“We are absolutely focused on trying to get a proposal that allows for a payment by mid-December at the latest.”
Mr Brennan said SV Partners would be paid an hourly rate for its work under the voluntary administration process.
“I couldn’t tell you what the fee is. We charge by the hour. It’s a time cost thing. The report to creditors that we send out will have our fees in it and that’s got to be approved by creditors,” he said.
“Our job is to make sure that creditors see the value in what we’re doing and make sure that they appreciate the work.”
Standing down the remaining two staff members was not on the cards, the director confirmed.
“We need to be able to utilise the staff to assist us with this process, so they’re currently employed and they’re assisting us.
“It’s really a process right now where we need to do whatever we need to do to maximise the ability to pay creditors back and ensure that this event goes ahead. Unfortunately, because of the nature of the appointment – we got appointed last Monday – we need to retain as much information as we can.”
It was revealed last week that Isa Rodeo Ltd had racked up $1.7 million worth of debt and only had around $1 million in cash and assets to pay it.
However, Mr Brennan said all efforts would be made to get the creditors paid in full.
Speaking to ABC North West Queensland, with questions also submitted by North West Weekly, he said the Isa Rodeo Ltd board had been suspended during the voluntary administration process, but it appeared likely that they would be replaced.
“They’re not really stood down,” he said of the board.
“It just means that their powers are suspended during the voluntary administration process. It allows the control to be with the voluntary administrator.”
SV Partners said the Mount Isa Rodeo was “the Wimbledon of bull riding … or rodeo” and that the event could continue in 2025.
“I think you’ll find that most of the board would willingly step down moving forward,” he said.
“As part of the rodeo recovery plan, there’s the ability to renew the board. So, we’re about to launch an expressions of interest campaign as part of this process.
“Part of that will be seeking expressions of interest from people that want to be involved moving forward to take on roles on the board.
“The idea of the process is to provide incoming board members, if there are people out there that want to step up, some clarity around what the board or what the company owes or doesn’t owe, and so that they can step into the role with confidence.
“It’s a clean slate in some respects. Ultimately, the future of the company and in many respects, the rodeo will be decided by the creditors, but there’s the opportunity to present a recovery plan that really finds that sweet spot between what the community needs and expects, and the ability to commercially deliver it, which is really what we’re working on.”
Mr Brennan said a company going into voluntary administration was not always the death knell of the business.
“Voluntary administration is a process that allows a company to take some breathing space when it’s facing some financial constraint and reorganise its affairs to try and maximise the payment to its creditors,” he said.
“The beauty with the voluntary administration process is that it does allow for business as usual and that’s where we’re at … the voluntary administrators take the role of the board and we’re continuing to work on delivering the 2025 rodeo.”
Mr Brennan said SV Partners would do a forensic audit of Isa Rodeo Ltd’s books and attempt to find out what had gone wrong.
“We’ve got access to their books and records … at the moment (Isa Rodeo) appears to owe around $1.7 million to creditors across the board,” he said while confirming the company had “around a million dollars at the moment” in the bank.
“Those numbers will move as creditors provide more detail, but yeah, it’s around that figure.
“Our job at the moment is to clarify exactly what creditors are owed and work forward from there.”
Speaking on concerns that preferential payments may have been made to some creditors prior to entering voluntary administration, Mr Brennan said enquiries were still being made.
“We’re not (aware), but that’ll be part of our investigation and we’ll report back to creditors in our second report,” he said.
“Our job is to investigate the affairs, explain to creditors how the company got into the position it is, and, as part of the rodeo recovery plan, to identify avenues for how that can be addressed moving forward.”
Mr Brennan said SV Partners would leave no stone unturned.
“We will dig into the books and be able to advise creditors where things may have gone wrong,” he said.
“We’ll go back as far as required to identify if there’s been any issues with regards to the management of the company.”
While businesses that are owed money were growing impatient, Mr Brennan said they had been responsive since being contacted by the administrators.
“There needs to be a little bit of patience, but at the end of the day, this is a unique situation for me in 25 years of doing this sort of work,” he said.
“I’ve never seen the amount of goodwill across the board.
“Yes, there are some certain elements that people have been disappointed with in terms of how the rodeo got to this space, but overall, the stakeholders and partners are so committed to ensuring that the community doesn’t lose this event.
“I’d be very surprised if we don’t see a stronger and better rodeo come from this process.”
Mr Brennan said he was confident that all creditors had been contacted and would be involved in the process.
“Fundamentally, all creditors will get paid at the same rate. So, it depends on how much funds are available to pay creditors and then it’s distributed evenly amongst them,” he said.
“The role of the administrator and what we’re hoping to do is to be able to put together a plan that maximises the ability to recover funds for creditors.
“I think the Isa Rodeo is a really particular sort of business and because of the community benefit and the overall beneficial nature of the rodeo to Mount Isa, there is a lot of goodwill.
“I think once we’re in a position to clarify how we’re going to utilise the Expressions of Interest campaign … once we get that process rolling, I think hopefully that will give creditors in the community some further insight into how the rodeo recovery plan is going to be stepped out and actually achieved.”