1800 Blinds Services placed into liquidation, questions over insolvent trading

1800 Blinds Services Pty Ltd appointed Stephen Wesley Hathway, from Helm Advisory as liquidator on 23 June.

The decision to place the company into liquidation has shocked a number of trade suppliers, with reports the company was busy placing orders right up until it ceased trading.

The company had also been spruiking its success in recent times. Owner Dean Matthews wrote earlier this year that 2020 brought with it the launch of the company’s franchising system to the Australian public.

“With successful franchises already up and running over many years, we are excited about the future of everyone involved in the brand and look forward to new franchisees joining the team,” Matthews wrote.”

“Watch this space as 1800-BLINDS continues to grow market share throughout Australia with the help of dedicated partners.”

An initial report to creditors said that the director, Dean Matthews had attributed the failure of the company to the Covid-19 Pandemic, however a statutory update to creditors issued on 25 August said that the liquidator had formed the preliminary view that the Director may have allowed the Company to trade whilst insolvent.

Stephen Hathway said in the report that his reasons for forming this view included:

• The Company had a liquidity ratio of below 1 for the 2018 and 2019 financial years;
•  The Company experienced trading loss during the financial period ending 30 June 2018 and 30 June 2019;
• The Company had unpaid invoices outside its trading terms; and
• The ATO running account balance has identified that the Company failed to discharge its statutory debts since May 2020.

“However, further investigation is required to establish the date of insolvency and the quantum of the claim,” Hathaway said.

“The merits of commencing such an action will depend upon the ability of the Company’s director to meet any judgements obtained against him.”

“My investigations indicate that the Director is not a registered proprietor of any property in New South Wales. Accordingly, I do not consider that it is commercial for me to pursue an insolvent trading claim.”

Hathway’s investigations also identified that the business of the Company has been sold to a related entity, 1300 Blinds Franchising Pty Ltd, on 22 June 2020.

“My review of the contract for sale of business has identified that the consideration made for this sale of business was $5,677 including GST. The assets that have been transferred include office and work equipment.”

“At this stage, I have formed the opinion that this sale of business did not constitute an uncommercial transaction.”

According to the creditors report, 1800 Blind Services Pty Ltd owes over $900,000 to its customers and trade suppliers with one trade supplier owed $326,101. The liquidator stated it is unlikely that sufficient funds will be recovered in the liquidation to enable a dividend distribution.

WFA has sought comment from Matthews but its questions have gone unanswered.