$660ph charged by Encompass administrators as staff ask when entitlement will be paid

Graduates’ work charged at $320 per hour are some of the exorbitant costs of the Encompass administration as staff booted question when they will be paid entitlements.

Encompass administrators from Worrells; Nathan Deppeler, left, and Scott Andersen, right.

Administrators dealing with Encompass Community Services’ financial woes are charging the organisation the equivalent of $22,000 a day.

More than $4m of debt is owed by Encompass, including entitlements to current and former staff likely to exceed $2m.

Information made available to Encompass creditors this week showed its administrator, Worrells, had charged Encompass more than $440,000 since it took over on January 12.

Worrells has estimated the cost of administration could be $575,000, and is likely to be paid before entitlements owed to staff are paid.

When Worrells took over, Encompass had $212,000 in the bank and had $384,000 owed to it from debtors.

The likely liquidation of Encompass is expected to include the sale of the organisation’s 2.7ha farm at Leopold.

The farm, which will close this week, could be sold for more than $2.1m, according to a real estate agent.

Seventeen staff from Worrells have worked on the Encompass file, charging between $275 and $660 per hour.

Worrells administrators Nathan Deppeler and Scott Andersen have charged Encompass $58,500 for 88 hours of work and $15,300 for 23 hours of work, respectively.

Encompass is being charged $320 per hour for the work of two graduate-level Worrells staff.

Collectively, the bill for the graduates is more than $33,000 for about 105 hours of work.

Worrells is charging Encompass $660 per hour each for the work of five of its staff, three are charging $600 per hour, and another four are charging above $400 per hour.

On Friday, Worrells announced Encompass would shut permanently on February 5.

In a statement Worrells said the Encompass administration included the assessment of 11 businesses under the organisation’s umbrella.

“Each of these individual business departments required separate assessment and consideration by the administrators taking into consideration the differing interests of all stakeholders impacted by each individual department,” the statement read.

“Some of the sensitivities involved in this administration have included dealing with a widely publicised historical underpayment which impacts up to 700 current and former employees as well as managing the intricate individual circumstances of up to 900 participants who have had ongoing reliance on the services provided by the organisation.

“The fees charged by Worrells in this situation, and in fact by any administrator in any matter, are always finally approved by creditors and or the court and an estimate was provided to creditors at the outset of this appointment.

“At the date of appointment, Encompass did not even hold sufficient funds to meet payroll outstanding at that time.

“It is in difficult circumstances such as these that the administrators must navigate the best outcome possible in a very short time frame, taking into account the varying and complex issues

“The federal government Fair Entitlements Guarantee scheme exists to cover eligible employee entitlements in the event there is a shortfall to employee creditors.

The sale of Encompass’s 2.7ha Leopold farm at O’Halloran Rd is likely to be used to pay back some of the organisation’s debt.

Geelong Real Estate Co. director Ricky Forte said the property could be worth more than $2.1m.

“The only real on-market comparable property worthy of mentioning would be 101 – 107 Como Rd, Leopold which is about 500m away as the crow flies,” Mr Forte said.

“That’s currently advertised with a range of $1.1-1.21m or around $78 per square metre.

“Using that same equation puts O’Halloran Rd at over $2.1m.”

Worrells has received an evaluation for the farm but is yet to release it publicly.

It is also waiting on valuations on Encompass’s vehicles and other equipment.

Originally published as $660ph charged by Encompass administrators as staff ask when entitlement will be paid