Brenton Strauss’ Sapphire grain trader plans payment offer for creditors

Brenton Strauss is planning to offer a payment deal, eight years after his company collapsed. See the latest in the $10m debit saga.

Failed grain trader Brenton Strauss is proposing another Deed of Company Arrangement in a fourth attempt to resurrect his business Sapphire Pty Ltd. Picture: Zoe Phillips

Grain trader Brenton Strauss is planning to seek court approval for a Deed of Company Arrangement for Sapphire (SA) Pty Ltd, eight years after the company collapsed with debts of more than $10 million.

The latest proposal for a DoCA comes eight years after the first one was proposed.

Sapphire (SA) traded in four states as either River City Grain Co or Rivercity Grain Co.

Just a few days before Sapphire (SA) collapsed, a new company run by Mr Strauss — Whites Hill (SA) Pty Ltd — began operating out of the same office, with a similar business trading name of River City Grain but with different ownership and directorship.

Mr Strauss’ interrelated network of companies are all named after gemstones.

In April, 2014, not long after Sapphire (SA) was placed in administration Mr Strauss offered a DoCA, promising to pay 20 cents in the dollar to creditors.

But Sapphire creditor Stuart Ellis said the deed was rejected by unsecured creditors because Mr Strauss put another company in his network, Crazy Lace, up as collateral but it “was mortgaged to the hilt”.

“He then offered us 10 cents in the dollar,” Mr Ellis said.

“So we told Brenton: we will liquidate you.

“But that liquidation has never occurred.

“I am surprised it has not been wound up.”

Another DoCA was offered in 2021, proposing to pay unsecured creditors just 1.4 cents in the dollar but this was also rejected.

A DoCA is often used by directors of failed companies as a method to stave off liquidation, which can put personal assets at risk.

An annual administration return lodged with the Australian Securities and Investments Commission last March shows Sapphire’s administrator Tony Matthews, principal of Anthony Matthews and Associates, has only recouped $520,000, most of which has been paid to Mr Matthews’ company and legal firms.

The report shows Mr Matthews eventually recouped $100,000 from Mr Strauss’ company, Whites Hill, after being awarded a judgment in the Supreme Court of South Australia in 2020.

Mr Matthews threatened Mr Strauss with bankruptcy in October, 2020, if the $100,000 payment was not paid, along with another $29,000 owed in a consent judgment in the Supreme Court.

The annual administration return shows 171 unsecured creditors are still owed more than $10 million.

Mr Ellis said he believed the DoCA would offer about $200,000 to creditors.

“It’s still chicken feed,” he said.

“Unsecured creditors won’t get one cent in the dollar.

“It will go to the NAB because it is the secured creditor.

“It highlights the failure of the system because it is the farmers that always lose out.”