Investigators have found indications that BBY may have paid some creditors in preference over others just before the stockbroker collapsed under the weight of option trading liabilities it couldn’t meet.
The administrators, Stephen Vaughan and Ian Hall of KPMG, told a closed-door meeting of creditors today that there may have been a number of payments which may be clawed back under the Corporations Act.
Under certain circumstances, money can be recovered if it can be shown that unfair preference was given by a company to a creditor.
“Further investigations will be undertaken in respect of these transactions prior to the second meeting of creditors,” according to the slide deck shown to creditors today. “It is too early in our investigations for any further detail to be provided.”
The success of the investigation depends on the available evidence, funding and the prospect of recovering money.
The administrators have only been given limited access to BBY’s books because the receivers — Stephen Parbery and Brett Lord of PPB Advisory — are deep into uncovering the true state of the broker’s finances.
However, KPMG has taken forensic copies of computer hard drives and seized documents relevant to the administrator’s inquiry.
A second meeting of creditors is expected late next month.
George Wang’s AIMS Financial has been negotiating to buy what’s left of the business since BBY’s executive chairman Glenn Rosewell called in administrators on May 18.
He’s already offered employment contracts to some of the 170 staff now made redundant. All staff are now creditors.
These are the BBY companies under administration: