Creditors vote to liquidate The Toowoomba Clinic

Lawyers representing one of the parties in the collapse of the Garden City’s only private mental health hospital has taken aim at ASIC after it aired allegations that the company was trading insolvent for more than three years.

Creditors voted to liquidate the Darling Downs’ only private mental health hospital, The Toowoomba Clinic, after it was placed in administration with debts over $11 million.

The decision to wind up the company was made at a meeting of creditors on June 6.

A record of the meeting obtained by the Chronicle shows SV Partners was appointed to liquidate the company, while several hospital staff will be retained to help with cleaning, scanning documents and paying wages.

The hospital’s Pechey Street building is subject to potential sale to recover some of the debt, and most of its furnishings will remain in place so that prospective buyers can purchase them as well.

The meeting was attended by nine creditors and proxies, who were owed a total of $8.05 million.

They included Brian Conrick of Clifford Gouldson Lawyers, who represented a related party, Heal All Pty Ltd.

One of Heal All’s directors – Bronwyn McCullagh – is also a director of the Toowoomba Clinic, and Heal All owns the Pechey Street premises.

Mr Conrick advised there are Federal Court Proceeding between The Toowoomba Clinic and Heal All related to disputes between shareholders and former directors that were due to go to mediation on June 21.

He told the meeting that the dispute was related to the sale of assets.

He further advised that he was instructed to write a letter of complaint to the Australian Securities and Exchange Commission following allegations in an earlier creditors’ report that The Toowoomba Clinic was trading insolvent for up to three years.

If proven, the directors were exposed to prosecution and could have their personal assets seized to pay down debts.

Anne Meagher, of SV Partners, advised that the directors may have defences against insolvent trading action as the related parties contributed funds so that it could continue trading.

The next liquidators report will provide an update into that investigation.

It is understood all staff will be paid their remaining wages and superannuation entitlements.

The private hospital went into external administration on May 1, with Ms Meagher appointed to investigate its finances, revealing the company had been trading insolvent for almost three years, from June 30, 2021.

In her creditor’s report, obtained by The Chronicle, Ms Meagher estimated the company’s debts totalling $11.1m.

Of that amount, about $593,000 was owed to employees, $1.3m to the Australian Taxation Office, $6.4m to Westpac Bank, and $2.6m to the related party, Heal All Pty Ltd.