Scott Brunton: Trainer allegedly drained $1.04m from collapsed stables Brunton Racing Pty Ltd
A new liquidator’s report examining the $1.6m-plus collapse of a Tasmanian horse trainer’s stables alleges the director gave himself loans from company coffers worth more than $1m.
Tasmania
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A new report by a liquidator examining the $1.6m-plus collapse of Tasmanian horse trainer Scott Brunton’s racing stables alleges a significant reason for its decline was the director giving himself loans totalling more than $1m from company coffers.
Mr Brunton’s company, Brunton Racing Pty Ltd, which owned his horseracing stables at Seven Mile Beach, was wound up in insolvency by the Federal Court in August, after an action was brought by creditor Australian Taxation Office.
No criminal charges have been laid against Mr Brunton.
On Friday, company liquidator Travis Anderson released his statutory report to creditors.
Mr Anderson said the company’s estimated liabilities were $1,599,149.22 – that number is expected to grow – balanced against assets with an estimated realisable value of $282,000.
The biggest creditor is the Deputy Commissioner of Taxation, who is owed $274,754.51 in unpaid superannuation guarantee charges and an additional $941,232.13 in unpaid tax liabilities.
Other significant creditors who have thus far lodged a claim include leading Australian bloodstock (thoroughbred horses) auctioneers William Inglis & Son Ltd, owed $224,435.56; Magic Millions Sales Pty Ltd, owed $45,430; and Lakeview Resources Pty Ltd, owed $42,000.
Mr Brunton’s father-in-law John Keys is owed an amount to be confirmed.
According to Mr Anderson’s report, five employees have lodged claims for unpaid wages worth $3684.73.
On the other side of the ledger, the company is owed $299,464 for racehorse training and ancillary services.
“However, this will not represent the total amount that will be collected into the liquidation due to the inability to pay and insolvency of certain debtors,” Mr Anderson said.
“A total of four debtors totalling $65,553.68 are currently being pursued at my instruction by Thoroughbred Recoveries [a Sydney-based equine debt recovery outfit].”
Mr Anderson listed the key reasons of the company’s decline as “under-capitalisation, non-payment of statutory debt, excessive drawings and use of company funds by the director, poor management of accounts receivable and doubtful debts, poor strategic management of the business, accounting records not properly and accurately maintained, inadequate or high cash use, [and] trading losses”.
Mr Anderson said Mr Brunton gave himself loans from company coffers in an amount “exceeding $1.04m”.
“I am... reviewing the records and other information to determine if the director and other parties have utilised company funds to acquire personal interests in racehorses and other assets,” he said.
“Investigations, including a review of banking records and further information from external parties, are continuing into the transactions that comprise of these loans.
“There is some evidence to suggest that should the director not have withdrawn over $1m from the company over time, it is possible that the company would have been able to service the unsecured creditors’ debts.”
Recovery action would be considered “if it is commercial to do so,” taking into account Mr Brunton’s capacity to repay.
Mr Anderson also identified that the company may have traded while insolvent and made unfair preference payments.
Mr Anderson chastised Mr Brunton for not submitting his report on company activities and property as required under the Corporations Act 2001 and said he would report Mr Brunton to corporate regulator ASIC for his inexplicable lapse.
He said he expected to pay a dividend of between zero to 11 cents to priority creditors – employees with unpaid wages and superannuation. Unsecured creditors are not expected to receive a dividend, unless action is taken against Mr Brunton or recovery from debtors exceeds forecast.
Mr Brunton was contacted for comment via telephone and email.
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