Thomas Paul Security: Creditors decide fate of indebted Tas firm

The creditors of an indebted Tasmanian security firm have voted on their preferred outcome for the wobbling business, as the administrator revealed how the business came a cropper.

The creditors of an indebted northern Tasmania security firm which employs up to 70 people have voted “overwhelmingly” to enter a deed of company arrangement which would see the business remain solvent after it racked up $2.2m of debt, its administrator has revealed.

The second creditors meeting for Prospect-headquartered firm Thomas Paul Security, which was founded two decades ago and entered into voluntary administration in March, was held on Monday afternoon.

Administrator Travis Anderson told The Mercury the unsecured creditors, of which he estimated there were “about five” – company director Matt Radford previous said there were only two – voted “overwhelmingly in favour” of the deed.

The effect of this, Mr Anderson said, was that employees would receive “100 per cent” of their outstanding entitlements – previously reported as about $60,000 – and no-one would lose their job.

In return, the unsecured creditors, of which the Australian Taxation Office is one, would receive approximately 7.5–10c back for every dollar owed to them by the company.

Mr Anderson said he believed the deed would be in place for “six to twelve months”.

The deed would be filed with corporate regulator ASIC in the next week or two, he said, at which point the company would revert to the ownership of Mr Radford.

Mr Anderson said this outcome was made possible due to the “overwhelming” support of the business’ employees, suppliers and customers.

Thomas Paul Security director Matt Radford and GM Cassidy Jelfs. Picture: Facebook

The administrator also gave his verdict on what went wrong in the business.

“The company was undercapitalised from the outset, certainly from the period I examined (about four years,” Mr Anderson said.

“There was a period where the experienced some losses which were ultimately not able to be funded by the company.

“The balance sheet didn’t look overly strong due to those historical trading losses.

“It’s the most common cause of small-business failure.

“I wouldn’t say Covid-19 caused this company’s insolvency but it was the reason it ended up being put into administration.”

Mr Anderson revealed he fielded “several final offers” to purchase the business, while Mr Radford also submitted a “recapitalisation plan”.

“My view is that the business is viable – that’s why it has continued to trade as usual,” Mr Anderson said.