Creditors to failed disability support provider FSG still in dark on whether they will see returns from property sales

FSG creditors are still in the dark about what will be recouped from the sale of a multimillion-dollar property portfolio. But there may be light at the end of the tunnel.

The 16-18 and 20-22 Railway St properties in Southport, formerly owned by FSG, are understood to be under contract.

CREDITORS to FSG remain in the dark on how much is expected to be recouped from the sale of the disability provider’s multimillion-dollar property portfolio more than a year after it went into administration.

That is despite five of the eight properties selling since FSG went into administration in June last year and two of the remaining properties going under contract.

FSG spent $8.24 million in total between 2006 and 2011 acquiring the eight properties.

Four of the properties (4 Bambarra St, 35 Salmon St, Southport, 161 Kriedeman Rd, Upper Coomera and 87 Moon St, Ballina) have sold for a combined $3.878 million while one (3 Jowett St, Coomera) has sold for an undisclosed price.

The two main vacant FSG buildings (16-18 and 20-22 Railway St) are understood to be under contract to an owner-operator looking to relocate to the Southport CBD. The prices are unknown, but if the sales are finalised, would be expected to easily top the sales achieved so far given they previously sold for a combined $5.07 million.

Former FSG executive David Weatherall is pictured with Savills’ James Stevenson during the marketing campaign for 4 Bambarra St and prior to administrators taking over FSG. Photo: Richard Gosling

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A spokesman for liquidator FTI Consulting sent the Bulletin a short statement confirming the sale of five properties and reporting they “hope to complete the sale of the balance properties in the near future”.

“The liquidators will be in a position to determine the level of funds which may be available for distribution to creditors, upon completion of all property sales,” the statement reads.

In an October report, liquidators estimated creditors would receive between $0 and $2.1 million after mortgages were repaid for the eight properties.

Secured creditors (including employees owed superannuation) are owed $10.79 million while unsecured creditors are owed $4.54 million.

35 Salmon St, Southport, (orange roof) was sold by administrators for FSG.

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The October report notes the latter are unlikely to receive a dividend.

Savills’ James Stevenson, who marketed seven of the eight properties, successfully negotiated the sale of 4 Bambrarra St to a not-for-profit disability support provider.

He said there is a lack of housing stock to suit the disability sector on the Gold Coast.

“We had eight offers for 4 Bambarra St, which demonstrates the incredibly high demand for disability accommodation within southeast Queensland,” Mr Stevenson said.

“There is a massive shortage of suitable properties.

Workers for FSG were left without a job when the disability support provider went into administration in June. Photo: Richard Gosling

STATE GOVT HAS NO CONTROL OVER FSG DESPITE MILLIONS IN FUNDING

“We had care providers, developers and investors all interested in this property due to the high level of amenity.”

FSG spent $1.5 million on the fitout, which included voice-activated technology and strengthened roof for installation of hoists.

The Bambarra St property was put to the market in April last year as part of a sale and leaseback offer by the charity and shortly before it went into administration.

In May FSG sought a $5 million short-term loan from the State Government to assist with a funding shortfall, however this was not provided.

The following month, and prior to the appointment of administrators, FSG entered into an agreement to transfer the majority of its programs and services to Cebral Palsy League, which trades as Choice, Passion, Life.

The administrators and liquidators struck a deal with CPL after their appointment for more than $2 million in funding so they could continue to operate the business and facilitate the transfer of services to CPL.

Employees were paid $1.72 million in outstanding entitlements under the Fair Entitlements Guarantee.

The October report from the liquidators notes that FSG may have been trading while insolvent from as early as June, 2017. The report notes liquidators are assessing the value of an insolvent trading claim against the directors.