Champion Travel owed almost $1.6 million when it collapsed, and only had $57 in bank
A TRAVEL group run by a prominent Adelaide sporting figure collapsed with almost $1.6 million in debt — and just $57 in the bank to repay it.
THE travel agency run by former chairman of the Adelaide 36ers Malcolm Simpson had just $57 in the bank when it collapsed with debts of almost $1.6 million.
Champion Travel was a successful company incorporated in 1999, which turned to focusing on sports-based trips helped by Mr Simpson’s contacts and reputation in basketball.
He spent 15 years as the 36ers chairman and helped secure their home stadium at Findon.
Olympian Brett Maher was involved with the company in its early years but told The Advertiser when it collapsed he has no association with the company.
“I’m actually owed quite a bit, and I know a lot of people who are owed a lot of money — a lot of people have been hurt by this.”
A report by liquidator BCRAdvisory’s Stephen James shows total assets of $57 compared with total liabilities of $1,583,572.
The report shows after early success the company faced “increased cash flow constraints making it increasingly difficult to service its creditor obligations”.
The company moved from its Hutt St premises in the city to Kensington Rd at Rose Park reducing rent from $120,000 to $50,000 a year but “the financial situation deteriorated when Drake Supermarkets, the company’s main customer, chose not to renew its contract with the company at the end of October 2017”.
Loans were not sufficient to trade out of debt and the landlord took possession of the premises on May 10, 2018.
As The Advertiser reported at the time, clients who had paid for travel and could not get phone or email responses to inquiries.
Instead, they found out the company had ceased trading only when they went to the premises and found it boarded up.
The liquidator’s report shows office equipment worth about $4000 are not included as assets as the landlord has taken possession to offset debt of $196,737.
Unpaid superannuation is recorded as $45,020, and unpaid wages and leave at $36,163.
The Department of Jobs and Small Business has made advances totalling $32,922 through the Fair Entitlements Guarantee Scheme to help cover the unpaid wages and leave.
Westpac and Prospa Advance along with “business loans” are the major secured creditors, owed $406,122, which the liquidator says “the company has no assets to be realised subject to these charges”.
Unsecured creditors include the Sheraton Grand Mirage Resort ($70,932), Le Meridian Phuket Beach Resort ($58,636), Magellan Travel ($118,250) and Drake Supermarkets’ parent company The Fourth Force ($191,900).
Liquidator Mr James states: “at the current time there is not expected to be sufficient funds to pay a dividend to secured or unsecured creditors.”
His report asks creditors to approve payment to his company of $13,969 for the liquidation work to July 29 “as funds become available” and a further $12,140 for work since July 30.
Mr James will now look at “whether the company traded while insolvent.”