WA-based window coverings company Tod Shutters Pty Ltd, trading under the retail brand Boardwalk Shutters, has been wound up after a creditors’ meeting.
The business, a wholly owned Australian venture supplying internal and external plantation shutters in Perth to residential and commercial clients, operated out of premises in the Perth suburb of Balcatta.
As reported in the March edition of Window Furnishings Australia, the company was placed into voluntary administration due to a liquidity crisis caused by supply chain issues.
“Due to the COVID-19 pandemic and restrictions on shipment imposed by the Chinese government, the company experienced significant delays in receiving supplies since late 2021, this has resulted in delays by the company to complete customer orders and collecting money from same,” Christopher Darin of Worrells Solvency & Forensic Accountants said.
“The company ultimately used up its working capital which led to the appointment of Administrators in late January 2022.”
The Administrators said that the vast majority of the products offered by Tod Shutters to its customers were sourced from Eastern Premium Limited, a manufacturer of window treatment products based in China. Other products were sourced from local suppliers. The shutters and blinds, once manufactured, were packed into containers and shipped to Australia.
“Our preliminary review of the company’s business model identified that the company relied on using customer deposits to fund the payment of stock for the next container to be shipped within 30 to 40 days. When supply was disrupted in early December 2021 the company did not have sufficient working capital reserves to meet fixed costs until supply normalised.”
At a meeting of creditors held on 4 March 2022 where creditors voted to wind the company up, Mervyn Kitay from Administrators Worrells Solvency & Forensic Accountants, confirmed they had run a campaign for the business and its assets, however to the date of the meeting, no offers had been received.
“Considering the reputational damage contributed by both the current administration and the former liquidation, the administrators do not anticipate a material recovery (if any) from this source.”
There was also bad news for many customers of Boardwalk, with the Administrators confirming there were insufficient funds to complete the customer orders for two container loads worth of product.
“As a result, the respective customers would be classified as unsecured creditors of the company for the deposits paid.”
An End of administration return – the document showing the outcome of the administration following its end – submitted the same day the vote was taken to wind the company up revealed that after Administrators’ fees and trading costs, unsecured creditors would be left with nothing.
Including the customers who were left out of pocket, sums linked to unsecured creditors of the business totalled $756,068.52.
Since its incorporation in April 2020, the company’s financial performance had been problematic, with the company suffering trading losses throughout its trading life with an accumulated loss of over $1.3 million. A preliminary assessment by the Administrators revealed that the company may have become insolvent from as early as 28 October 2020.
“This is based on analysis of which suggests the Company’s inability to pay down its taxation liabilities since at least 28 October 2020, it also disclosed that the Company started making round payments to the ATO between 15 October 2021 and 24 December 2021 totalling $60,000,” Darin said in a report.
“In forming our opinion on the likely date of insolvency, we have also considered the amount and the timing of funding provided by the former director. Our preliminary review reveals that the company suffered trading losses for the year ended 30 June 2020 and it appears that it was able to obtain limited additional funding since that time.”