Russell-Smith creditors agree to place company into liquidation

Tasmanian company Russell-Smith has been placed into liquidation.

A meeting held in Hobart on Thursday saw creditors reject a proposed Deed of Company Arrangement from the former director of the company, Prasanga Shiromon Kingsley De Silva.

Mr De Silva claimed the DOCA would see an “improved return” of outstanding debt owed to creditors, which administrators have reported as being almost $9 million.

The company’s administrator Stewart Free had previously recommended the proposal not be accepted and suggested liquidation would be the best outcome.

Mr Free and fellow Jirsch Sutherland administrator Bradd Morelli have now been appointed as liquidators.

Former Russell-Smith employees, who are believed to be owed more than $700,000, will now be able to access the Federal Government’s Fair Entitlement Guarantee scheme.

Communications, Electrical and Plumbing Union Tasmania state organiser Mick Anderson said the news was “fantastic”.

“It gives [employees] the chance to move on,” he said.

“All the workers I have spoken to right across the state are over the moon.”

Liquidator Stewart Free said investigations into the company would continue.

“Now that creditors have resolved to place the Company into liquidation, we can focus our efforts on fast-tracking the claims of the employees via the FEG scheme and fully investigating the issues identified in our previous reports,” he said.

A spokesman for Mr De Silva said the former director was disappointed his proposal had been rejected.

“Whilst [Mr De Silva] is disappointed with this outcome and losing the prospect of having been able to secure the maximum return for the creditors, he confirms his ongoing support and willingness to continue to work with the liquidator to assist with any attempts to still being able to achieve this objective of maximising any return to the creditors,” the spokesman said.