Griffin Coal administrator to investigate insolvent trading claims

The administrator of collapsed Perth miner Griffin Coal says he will look into claims the company may have traded when insolvent, after revealing the company’s debts could top $1 billion.

Administrator Brian McMaster of insolvency firm Korda Mentha says he will look at insolvent trading claims as part of his investigation into the reasons behind the company’s collapse.

“It’s something that needs to be considered seriously but is something that will take several months to come to a conclusion on,” he told creditors at Griffin Coal’s first creditor’s meeting in Perth yesterday.

Some creditors claimed at the meeting that invoices have not been paid since November.

The company’s complex structure, set up by its reclusive owner Ric Stowe, are likely to mean the administrators will delay a second creditors meeting as their investigations continue.

Stowe did not attend the meeting, but his private company, Devereaux, did attempt to have itself added to the creditors’ committee formed yesterday. However, other creditors voted down this attempt.

Devereaux is owed $10 million by Griffin Coal, while the Commonwealth Bank is owed $28 million. Bondholders are owed $538 million, which there is a $330 million debt with the Australian Taxation Office, which may end up being smaller when settlements with the ATO are taken into account.

McMaster is also assessing an offer from the Western Australian Government to provide a $4 million working capital lifeline to the company, but says he is prepared to walk away from the deal if the conditions attached do not suit.

He says the company is cashflow positive and can continue to fund without the government funding, although alternative funds would need to be found eventually.

Offers have flooded in from Australia and overseas for the miner’s assets.