Administrators have recommended a security firm that owes creditors more than $1 million be wound up, as workers at the company face an uncertain Christmas.
Voluntary administrators from Mackay Goodwin were appointed to Kudos Australasia Pty Ltd, trading as Kudos Audio Visual and Kudos Security Solutions, on November 9, however, SmartCompany understands employees of the company have spent the past year attempting to recoup their entitlements.
Kudos Audio Visual provides commercial and domestic installation of audio visual equipment, while Kudos Security Solutions installs security systems and technology including CCTV, security doors and intercom systems. The businesses are continuing to trade.
In a report from the administrators seen by SmartCompany, the company’s liabilities are listed at more than $2.5 million, including $1.2 million in unsecured creditor claims.
According to the administrators report, an initial investigation indicates the company was trading while insolvent, however the administrators said this assessment is subject to change upon the business providing additional information.
The company told administrators that faulty security equipment supplied on one job and a reduction of sales after the company sales manager fell ill contributed to the voluntary administration. However, in the report, administrators highlighted poor strategic management and quotes from the business that included understated costs as factors that contributed to the voluntary administration.
SmartCompany understands that staff members at the company have been chasing management for the payment of commissions and superannuation payments over the past 12 months without making any progress.
At the date of the appointment of administrators, outstanding employee superannuation contributions were listed at $137,769, while $120,803 was owing in annual leave payments. Overall, $387,234 of employee entitlements were shown to be owing, with these payments afforded priority over unsecured creditors in any distribution of assets of the company.
SmartCompany understands around 15 staff members will be affected by the outcome of the administration. Staff were told without warning in November that administrators were appointed and some asked to take an extended break over the Christmas period, with their future employment prospects with the business uncertain.
An individual close to the business told SmartCompany staff are experiencing significant financial hardship as a result of the collapse of the business, and while “everyone knew this was coming for a while” from warning signs over the past year, some are owed tens of thousands of dollars in entitlements.
The business has been continuing to trade since the appointment of administrators. On December 2, administrators recommended it was in the best interests for the company to be wound up. A creditors’s meeting was held on Monday, December 12.
In a statement, administrators from Mackay Goodwin told SmartCompany the meeting on December 12 was adjourned to a date in January that is yet to be determined “whilst the Administrators are urgently assessing available options for the company including either ongoing negotiations for a sale of its business or a Deed of Company Arrangement proposal”. The business is expected to continue to trade with all staff.
*This article was updated at 12:20pm on Wednesday December 21 to include a statement from administrators.