Legal

Bruck Textiles investigated over accusations it tried to dodge paying worker entitlements

Kirsten Robb /

Liquidators HLB Mann Judd are investigating Victorian textile manufacturer Bruck Textile Technologies, after it was accused of deliberately entering into a questionable business arrangement to avoid paying workers’ entitlements when it was sold to another company for $1 last year.

SmartCompany understands the Australian Securities and Investments Commission has approved funds for the liquidators to investigate the closing of the company, with a report expected to be delivered to the watchdog by mid-February.

But Mark Wells, a spokesman for Bruck, says the company’s former directors are “not particularly concerned” by the investigation.

“They are confident that no adverse findings will be levied against them by any current or future inquiry,” Wells told SmartCompany.

Federal Employment Minister Eric Abetz referred the Wangaratta manufacturer to ASIC after concerns were raised in July 2014.

Voluntary administrators were appointed to Bruck Textile Technologies on July 11, 2014.

However, at the same time, a company named Australian Textile Mills reportedly purchased the company for a token $1, reported Fairfax. Australian Textile Mills was registered only a month earlier by its own principal shareholder, Philip Bart, and chief executive Geoff Parker, according to the reports.

“The government is very concerned at any suggestion of companies entering into contrived arrangements to avoid paying employees’ entitlements, and any wrongdoing should be dealt with by the relevant authorities,” a spokesman for Abetz said at the time.

Bruck, which was more than 60 years old as a company and in prior years had had a turnover of around $56 million, made around 60 staff redundant when it went into liquidation.

The company told redundant workers it would not be paying annual leave, long service leave, notice pay or redundancy pay entitlements, despite having received $2.9 million of state government assistance in the previous 18 months, reported Fairfax.

Speaking to SmartCompany in July, liquidators Barry Taylor from HLB Mann Judd said employees’ entitlements were estimated to be worth around $4 million. Bruck’s creditors were owed around $7-8 million.

Australian Textile Mills chief executive Geoff Parker previously told SmartCompany all creditors would be paid and Australian Textile Mills would take on liabilities of approximately $20 million.

The company has not made a statement on the worker’s entitlements, but Michele O’Neil, national secretary of the Textile, Clothing and Footwear Union told the Herald Sun  workers had been left with “nothing”.

 HLB Mann Judd was contacted for comment, but SmartCompany did not receive a response.

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Kirsten Robb

Kirsten Robb is a former journalist at SmartCompany. Previously, she worked at News Corp as a property reporter for Leader Newspapers and the Herald Sun, and holds a Masters of Journalism at Melbourne University.

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