DEBT packed Border firm Magi-Build will be wound-up with creditors rejecting a deal which promised a return of 20 cents in the dollar.
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Administrator Chris Chamberlain advised creditors to accept a deed of company arrangement which would have involved Magi-Build director Paul Maginnity contributing $300,000 via asset sales.
But as part of a 90-minute meeting at Albury’s Commercial Club on Monday morning, creditors opted instead to send Magi-Build, which owes $1.2 million, into liquidation.
Based on an optimistic outlook unsecured creditors may now get 15 cents per dollar or zero if the most pessimistic forecast is realised.
Creditors, who voted for winding up, told The Border Mail they were driven by the liquidation process allowing for more assets to be uncovered and allegations of insolvent trading to be explored.
The roles of Mr Maginnity’s fellow directors, his father Brian and brother Chris, who resigned last year are also set to be further scrutinised.
An electrician from Wangaratta Ashley Baines, who worked for Magi-Build on West Wodonga’s CFA station and is owed $55,000, said the deed was unsatisfactory.
“Paul’s initial offer of 20 cents – it’s OK for Paul to think it’s realistic but it’s like me rocking up to your house and saying ‘I’m going to give you 20 per cent of your house’,” Mr Baines said.
“It’s an easy cop out.”
Another creditor, who declined to be named, said he voted for liquidation as “I did not want to see them open up the next day … and hurt more people”.
ARCO Doors lost $95,000, the highest tally owed to an unsecured creditor.
Boss Paul Deed, who travelled from Melbourne for the meeting, said his “mum and dad” company had suffered after installing doors at the CFA station.
He alleges Magi-Build provided statutory declarations to government departments falsely saying suppliers had been paid.
Mr Baines said sub-contractors who had worked for Magi-Build would continue to struggle financially.
“Anyone that’s caught up in the Magi-Build saga is caught in cashflow problems – it will be an ongoing issue for five to 10 years,” he said.
Mr Maginnity attended Monday’s meeting.
Mr Chamberlain was surprised the deed was spurned.
“You end up with a situation where emotions do play a part,” he said.
“We recommended the proposal based on it delivering a better result.”
Mr Chamberlain will now do more probing with the liquidation process to take six to 12 months.
