Avior Consulting was appointed liquidator of A C H Contractors Pty Ltd (ACH) in February 2020. ACH owned a collection of earthmoving plant and equipment, as did a related party. We identified a transaction whereby the director could sell unwanted assets from the related party and use the proceeds to purchase desired assets from ACH at a higher price, which was justifiable given the expected difficulty of replacing those assets. Whilst the sale of the related party’s plant was being undertaken, the director entered into a dry hire agreement of the desired assets.
The purchase price for ACH’s assets would have resulted in a dividend for unsecured creditors.
Unfortunately in this case the restructure did not proceed due to other circumstances affecting the director. The hire agreement was terminated and ACH’s assets were sold in the normal course by way of auction.