Court spotlight cast new light on collapse historic Adelaide retailer Trims
IT was a sad day for Adelaide when historic retailer Trims went into administration in May last year.
IT was a sad day for Adelaide when historic retailer Trims went into administration in May last year.
Since 1937 generations of blue collar workers, and later a broader clientele, had filed through the doors of the workwear outfitter to purchase a pair of Levi’s jeans or the local favourite, RM Williams boots.
There were calls to mount a Spring Gully-style campaign to resurrect the retailer, which had plied its wares from an iconic white building on King William St.
Online shopping was flagged as a culprit. But soon it emerged that there could be more to the story.
One of the Trims’ sons, Justin, along with a business partner, bought the Trims name and moved a few hundred metres up the road.
Former managing director — and Justin’s father — Russell was “politely’’ asked not to be involved.
Justin released a statement in September 2013, four months after the business failed with debts of $3.2 million — seeking to clarify the situation.
“(We) have researched the problems associated with the demise of the company, and along with external consultants have discovered that the downfall was not solely related to the existing retail business, rather the non-retail costs and decisions of other members of the family,” he said.
“Unfortunately Trims will no longer be a family business after recent events.”
Some of those events, and decisions, have been detailed in examinations in the Federal Circuit Court this week.
While related to the failure of Trims, which owed $3.2 million to creditors and a further $580,000 to staff, the examination was specifically looking at the bankruptcy of Russell Trim, and the movement of assets before and after his February 25, 2014, bankruptcy.
Among the testimony this week:
MATTHEW Trim denied that his ill-fated restaurant ventures had been bailed out by his father Russell.
RUSSELL agreed that he would have “done anything’’ to keep Matthew’s businesses alive.
RUSSELL and Matthew’s wife Olivia testified that they borrowed $3.8 million but did not know how the money was subsequently spent.
MATTHEW said he could not recall receiving any benefit worth more than $1000 from his father in the five years leading up to his bankruptcy.
LOANS in the name of Matthew and his businesses worth several hundred thousand dollars were paid out with the $3.8 million but no one could recall who specifically directed this to happen.
OLIVIA testified that she could not remember filling out an application for the $3.8 million loan and said “I just signed the papers and didn’t really ask any questions’’.
MATTHEW told the court he did not know how much money he had in the bank — somewhere between $5000 and $50,000, but that was “a complete guess”.
The court was told that Russell Trim had asked Adelaide real estate agent Jock Gilbert to backdate the sale of his $1.95 million Toorak Gardens house by two days — to one day before his bankruptcy.
Mr Gilbert has signed a sworn statement to that effect, saying Mr Trim told him the 24th was a “better date”.
Mr Trim argues that date was used because it was the date of the offer.
The court heard that Russell and his son Matthew’s wife Olivia borrowed $3.8 million from BankSA in late 2011, but both testified they did not make decisions about how that money was spent after it was loaned.
Olivia said she assumed Russell decided how the money was spent.
Matthew, who currently runs Grace the Establishment on The Parade, Norwood, denied his father had given him money or bailed out his businesses. Documents read out in court indicate a number of loans to himself or his businesses were paid off with the loan money.
Matthew has run previous dining venues, including Sparrow, the Manse and Farina Kitchen and Bar. One of his businesses, T. H. Holdings Pty Ltd, was placed in liquidation with debts of $900,000 in mid-2012.
One particular sequence of events has been of particular interest to Russell Trim’s bankruptcy trustee. As a bankrupt, Mr Trim’s assets, including his house, were fair game for those he owes money to.
After Mr Trim signed a contract to sell his house, his trustee put a caveat on the property, blocking the deal.
The court heard that in June this year, Elizabeth Trim established a company called Secure Acquisition, bought the second mortgage on the Toorak Gardens home, declared the mortgage in default, and foreclosed. The house was sold, but her husband’s bankruptcy trustee was not informed, the court heard.
In common with Russell and her son Matthew, Mrs Trim had a poor recollection of her dealings in company matters in recent times while on the stand this week, frequently telling the court she could not recall details. This included of the Secure Acquisition dealing, which happened in June this year.
Mrs Trim, who started her testimony in tears, told the court that Secure Acquisition was set up on “advice it was the best way to do the sale of our house’’.
She was unable to explain why it was necessary to set up a company to sell the house,
“I don’t know. I can’t tell you that. I’m not coping with trying to remember anything.’’
Mrs Trim was also unable to explain where her company — of which she was the sole director — came up with the money to buy out the second mortgage. “A third party I assume”. She later said it could have come from the sale of the Trims property on King William St.
She denied that Russell instructed her to set up the company, and testified that the advice on how to structure the sale had come from John Tucker of Fox Tucker lawyers and Peter Hunt, the family’s long time adviser from BDO and a former partner at the accountancy firm.
Mr Hunt told the court that he had never heard of Secure Acquisition and had not had discussions with the Trims about setting up new companies in the past six months.
“We had no advice on this whatsoever,’’ he said.
The Secure Acquisition company documents show its registered office as BDO and name and were signed by a solicitor from Fox Tucker.
It is understood that Russell Trim’s bankruptcy trustee intends to pursue Matthew, Olivia and Elizabeth through the courts.
Meanwhile the two couples continue to live in houses in the eastern suburbs, paying rent in the vicinity of $800 per week.
Russell Trim is still a member of the prestigious Kooyonga Golf Club — his wife pays the $2800 per year fees, he told the court.
Grace the Establishment continues to serve meals in Norwood. But, if it’s a pair of boots you’re after, go see Justin on King William St. Just south of where Trims used to be.