Home Appliances Plus: Directors wasted $250K on ‘valueless’ shares

A liquidator looking into the collapse of a whitegoods e-retailer owned by two Tasmanian men alleges the company traded while insolvent and may have made voidable transactions.

Devonport businessman Ashley James Fabics, 45. Picture: Facebook

A collapsed whitegoods e-retailer owned by two Tasmanian directors blew $250,000 of company money investing in shares in an esoteric fintech start-up that are currently worthless, according to a liquidator’s report filed the with the corporate regulator.

Steel & Water Pty Ltd traded as Home Appliances Plus until a slew of negative publicity, including an appearance on Channel 9’s A Current Affair and investigation by most consumer watchdogs in Australia, led to its shutdown.

The two directors, Launceston man Richard Douglas Edwards, 41 and Devonport man Ashley James Fabics, 45, who is understood to now live in Melbourne, tipped the ailing company into liquidation on October 10 last year.

In a report filed with ASIC, liquidator Matthew Bookless, of Gold Coast firm SV Partners, revised down to $1,335,516.22 the company’s estimated debt, although “not all creditors have submitted a proof of debt” yet.

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The directors estimated in a previous report to ASIC that their company owed as much as $1,897,735.

The $1.335m debt is balanced against $67,859.85 cash held in trust by the duo’s law firm.

Mr Bookless said in his report he believed their company was insolvent from June 30, 2022 – four months before he was appointed.

While directors can be liable for company expenses incurred after the estimated date of insolvency, Mr Bookless said he did not intend to pursue that course.

Home Appliances Plus director Richard Douglas Edwards. Picture: Supplied

“Based on the information currently known, I do not believe the directors have any defence available to avoid personal liability of a potential insolvent trading claim,” he said.

“(However,) my preliminary investigations indicate the directors do not own sufficient assets with which to meet an insolvent trading action.”

Mr Bookless continues to investigate whether the company made unfair preference payments or uncommercial transactions, which a liquidator has the power to reverse.

The report notes that Mr Edwards and Mr Fabics’ company spent $49,861.50 on a deposit on property in Victoria and also invested more than $301,200 in shares, including $250,000 blown on an unlisted fintech start-up, Divvera Pty Ld, that are currently worthless.

This is because, according to accounts given to Mr Bookless, Divvera is locked in a nasty dispute with its third-party software developer.

Divvera’s director alleged to Mr Bookless that the software developer “misappropriated (its) product”.

“The director has advised, given the alleged misappropriation, the company’s shares in Divvera hold no value,” Mr Bookless said. He continues to investigate whether he can realise any value from the sale of those shares.

Mr Bookless said he had received information, which he is “verifying”, that the listed shares worth $61,200 were sold prior to his appointment.

He said he expected to pay no dividend to the creditors.

Originally published as Home Appliances Plus: Directors wasted $250K on ‘valueless’ shares