Electrical company Russell-Smith collapses into voluntary administration two years after being rescued from receivership
Tuesday, September 27, 2016/
Tasmanian electrical and communications company Russell-Smith has ceased trading, after being placed in the hands of external managers at the end of last year.
Stewart Free and Bradd Morrelli from Jirsch Sutherland were appointed as voluntary administrators to Russell-Smith Pty Ltd on September 22.
It comes only two years after the company’s former parent company, PSG Russell Smith, fell into receivership.
According to the ABC, the Tasmanian arm of PSG was purchased and renamed Russell-Smith in June 2014, and the company hired a group of former PSG workers.
On Monday, Jirsch Sutherland said a licence agreement had been secured to enable part of the company to continue trading throughout the voluntary administration, which would mean some employees would retain their jobs.
However, in an update provided to SmartCompany this morning, Free and Morrelli said “an assessment has been made of the company’s capacity to continue to trade”.
As a result, around 20 employees have been made redundant and the administrators said they are now working to “quantify outstanding employee entitlements”.
SmartCompany understands at its peak, the company employed as many as 200 workers.
There have been reports that large numbers of employees have resigned from the company over recent months due to unpaid entitlements, with one electrician telling the ABC that staff knew something was amiss.
“All of us have known in the back of our minds since literally the end of February that this was coming,” said Charlie Warren.
“To get an answer from anybody in management about what was happening, where we’re going, how we’re going to get out of where we are, just wasn’t forthcoming and it’s just been so frustrating.”
Jirsch Sutherland said it will be providing information to employees about how they can claim unpaid entitlements under the Federal Government’s Fair Entitlements Guarantee scheme, and will work with the Tasmanian Department of Growth’s skills response unit to provide information about additional support services.
On Monday, administrator Stewart Free said while an assessment into the reason’s for the company’s collapse was still ongoing, “we were advised that the termination of a major contract this week was a contributing factor”.
The administrators said they will be “exploring the possibility of a sale of the business, in whole or in part” and interested parties should contact Jirsch Sutherland directly.
The first meeting of creditors is expected to be held on October 4.