Failed Couran Cove Island Resort company ‘may have traded insolvent’ for almost 2yrs
A new report has revealed what likely caused the collapse of the company behind the popular Couran Cove resort before its closure earlier this year. Read the shock findings
Gold Coast
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One of the companies behind Gold Coast’s Couran Cove Island Resort may have traded insolvent for almost two years before its collapse, a report has revealed.
South Stradbroke Operations collapsed into liquidation on May 23 with debts of $1.6m, including $300,000 owed to staff and $280,000 owed to the tax office.
The company operated as a resort management business and oversaw some of the operations at Couran Cove before the resort closed on April 17.
Liquidator Andrew Weatherley’s report said the company appeared to be operating at a loss from June 30, 2021 with “net losses escalating until its final period of trading”.
He said lack of funds, ongoing litigation and disputes between the various body corporates associated with Couran Cove and the Covid-19 pandemic may have contributed to the company’s failure.
“My preliminary investigations reveal the company may have been insolvent from July 1, 2021, when it appears the company first failed to meet its payment obligations to the Australian Tax Office,” the report stated.
“I have determined there would be no commercial merit in pursuing a more detailed investigation and commencing any formal recovery action in respect of insolvent trading.”
The consequences of insolvent trading can include criminal charges, penalties and compensation proceedings.
In his report, Mr Weatherley said he did not have the funds to investigate this further.
He said such a probe would require a public examination of relevant parties at an estimated cost of at least $85,000.
“If any creditors are interested in funding a public examination and pursuing an insolvent trading claim and litigation of the same, please contact or write to us within 15 business days of this report.”
Mr Weatherley said employees with outstanding entitlements may be eligible for financial assistance under the Fair Entitlements Guarantee.
There was not expected to be enough funds to pay a dividend to priority or unsecured creditors and he advised they should “write off their debts”.
Mr Weatherley expected to finalise the liquidation within the next three to six months.
South Stradbroke Operations had been solely directed by Craig Horwitz since May 2022.
It was previously directed by Simon Napoli.
In June, it was revealed South Stradbroke Operations was one of four companies linked to key services and operations of Couran Cove had collapsed owing millions of dollars.
Many residents and holidaymakers fled the resort after their power, gas and water were cut in February amid a bitter body corporate dispute.
The sewerage system was shut off in June.
Dozens of residents who remain at the resort have vowed to stay put and live off-the-grid using water tanks, generators, solar panels and gas bottles.
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Originally published as Failed Couran Cove Island Resort company ‘may have traded insolvent’ for almost 2yrs
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