Childcare college Educare enters administration, owing $1.6m
Creditors owed more than $1.6m by a Qld college are set to decide if they’ll let another company take it over, or if it should be liquidated.
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A Queensland college offering courses in childcare, as well as disability and aged care has collapsed, owing an estimated $1.6 million.
Educare Training Institute, which trades as Educare College, is a registered training organisation based on the Gold Coast, which started in 2012.
State government funding allowed it to offer training to eligible students at a discount or for free from its offices in Brisbane and on the Gold Coast. But the college went into voluntary administration from the start of May.
A report lodged with ASIC on Friday revealed its debts include about $98,410 owed to employees, including about $83,916 in unpaid superannuation.
A further $348,000 was owed to the tax office, the report from administrators Matthew Hudson and Terry van der Velde said.
They’ve warned the company may have traded while insolvent for almost three years – from May 31, 2022.
Sole director David Gross may have failed his duties of care, due diligence and good faith, according to the report, lodged with corporate regulator ASIC.
Currently, the college is being managed by Next Vision Education and NIET Group, which are continuing to operate the business, in an attempt to guard against disruptions to students.
Creditors will decide at a meeting on Friday if Educare will be wound up, but the administrators have advised them against it.
Instead, they could agree to a Deed of Company Arrangement (DOCA), in which Educare’s ownership would be transferred to Next Vision Education and its director Jason Yang would take over.
Next Vision Education has a common shareholder with Educare, Litchi Education Group.
Next Vision has said it would retain all employees and pay their superannuation entitlements in full.
Under the deed, unsecured creditors could receive a dividend of 4.14 cents for every dollar owed, the report said.
“If the proposed DOCA is not accepted by creditors, the company will be wound up and all available company assets will be realised,” the report said.
“In a winding up of the company, no class of creditors are expected to receive a distribution.”
News Corp contacted Mr Gross but he declined to comment.
He had told administrators that the company had relied on international students and it suffered through COVID-19 lockdowns, accruing historical debts.
It generated about $949,349 in revenue for the current financial year, but was running at a net loss of $1.3 million.
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