Administrators flag caution on Jan Cameron buy-back plan for Retail Adventures

Administrators for Jan Cameron’s collapsed business, Retail Adventures, have warned creditors that they disagree with her company’s estimates of return under a liquidation scenario.

Cameron’s company, DSG Holdings Australia, which bought Retail Adventures out of administration earlier this year, is reportedly aiming for support for a deed of company arrangement that would see unsecured creditors receive about 5c in the dollar, higher than the result of liquidation.

DSG has suggested creditors would receive between 2.57c and 9.04c in the dollar through liquidation.

However, in a letter to creditors, administrator Vaughan Strawbridge of Deloitte has warned creditors that the administrators disagree with this estimate.

Strawbridge said the return to creditors through liquidation was likely to be between 22c and 48c in the dollar. This figure would depend on whether administrators found that half of Cameron’s $77 million secured debt to Retail Adventures was invalid, if the company was insolvent when security was granted, a Fairfax report said.

Retail Adventures went into administration in October 2012, owing unsecured creditors approximately $90 million. Brands under the business include Clark’s, Sam’s Warehouse, Go-Lo and Chickenfeed, with around 236 stores nationally.

Cameron originally purchased Retail Adventures in 2009 for $85 million, after selling her half-stake in outdoor lifestyle brand Kathmandu for approximately $247 million. She invested another $80 million over three years into Retail Adventures, in a bid to keep the business afloat.

Earlier this year, DSG Holdings Australia bought Retail Adventures for $58.9 million. At the time, the administrator said in a statement that the offer was the highest following a public sale process.

“This is a positive outcome,” he said. “The sale will ensure jobs are retained for approximately 4,700 employees, with many stores located in regional areas.”

In April this year, SmartCompany reported that the administrators had informed corporate watchdog ASIC that Retail Adventures may have been trading while insolvent.

Strawbridge was contacted by SmartCompany for comment this morning, but was not available prior to publication.