Questions are being asked about the collapse of furniture chain Matt Blatt after documents lodged with the corporate regulator revealed the business owes $11 million to creditors, having already sold off stock and intellectual property.
The once-popular retail chain, which made about $43 million in 2018, registered under Badam Trading Co, is in the hands of liquidators at DvT Group in Sydney after closing its stores in March amid the COVID-19 pandemic.
It comes after Matt Blatt founder Adam Drexler attempted to sell the business, as first reported by Inside Retail, culminating in a $4.4 million deal with ASX-listed Kogan.com in May.
But now, as The Guardian reports, it has emerged Kogan only purchased intellectual property from Badam and that Drexler, a Badam director, oversaw a sell-off of warehouse stock during April through Grays Online.
The business had estimated realisable assets of just $500,000 as of May 22, according to ASIC documents.
The Guardian reports the business owes more than 3,000 customers money, despite having sold off assets before appointing liquidators in May.
Under Australian insolvency laws liquidators for the company are now required to investigate the company’s financial dealings in the weeks leading to its collapse and file a report with the corporate regulator.
DvT Group did not respond to requests for comment on Monday morning.