The former director of failed Tasmanian company Russell-Smith has put forward a proposal which could see the business avoid liquidation.
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Prasanga Shiromon Kingsley De Silva, who left his role as director less than two weeks before Russell-Smith went into voluntary administration in September, proposed a ‘Deed of Company Arrangement’ to administrators this week.
The DOCA, a binding arrangement between a company and its creditors, would “maximise the chances of the company, or as much as possible of its business, continuing”.
The business, which had offices in Launceston, Devonport, Burnie and Hobart, is believed to owe almost $9 million to creditors and about $642,000 to employees.
A creditors meeting scheduled to take place on Friday was adjourned to allow administrators time to consider the proposal.
“It is ultimately for the creditors to decide whether to resolve that the DOCA should be implemented or that the company should be placed into liquidation,” Jirsch Sutherland administrator Stewart Free said.
The creditors’ meeting will now be held in Hobart on December 1.
The company’s current director Peter D’Alfonso, who was appointed on September 7, was contacted for comment.