Dick Smith Finally Goes Into Liquidation

Image: Supplied

Administrators for Dick Smith have placed the company into liquidation, according to a statement published after the Australian electronic retailer's second meeting of creditors today.

The move means that shareholders and unsecured creditors, the latter including people still holding onto Dick Smith gift cards, are unlikely to get any money back.

It also follows a report published by administrators McGrathNicol last month, which revealed that banks HSBC and NAB were believed to be owed approximately $140 million.

The only part of Dick Smith still operating is its online store, which was purchased by Kogan earlier this year. The retail stores stopped trading on May 3. Amanda visited one of her local stores just before the deadline, and was taken aback by the fervour with which everything was sold — including clearance stickers, tables, cords, and a cardboard cut-out of Redfoo.


Comments

    Still have friends who were employees waiting for their pay... jeez. :(

      I doubt anybody will be getting money if GAME was anything to go by.

        Indeed. It's a seniority thing I guess. Those there the longest etc. I heard a few horror stories about GAME and its closing down.

          I worked at game and had all my pay and benefits paid out by the government GEERS. Was a lot more than i was expecting

          >Indeed. It's a seniority thing I guess.

          It doesn't work like that. It is highly regulated from the moment the administrator stepped in. The employees are all creditors. Whatever money can be saved should get divided. And in some cases the employees are preferred over other debts. If there is no money left, or more money than debts this can mean the company was trading while insolvent. This can mean the directors are at extremely great personal risk, further than the loss of unpaid wages. They can literally lose the house and/or go to jail.

          What the employees need to know is that, as creditors THEY GET TO VOTE. The directors certainly know that and will have registered to vote at the creditors meetings to their own benefit. The employees should be able to counter this and in fact can take control of the process by have the most registered voters appearing at the meetings.

            There's also the Fair Entitlements Guarantee legislation - I don't recall whether this was implemented before or after GAME went bust but it covers entitlements (within certain limits) when a company goes bust and can't pay its entitlements.

            Employees are, broadly speaking, preferred creditors in a bankruptcy and entitlements are paid before most other debts. ("Other debts" includes gift vouchers; gift voucher holders are basically regular creditors.)

            I was working with a company that went bust about ten years ago; all employees received full entitlements and Telstra received about three cents in the dollar. Apparently the Directors did this more or less deliberately - it was clear months earlier that the company was not in any shape to continue.

              There's also the Fair Entitlements Guarantee legislation

              Yeah, used to be GEERS, now FEG. No guarantee, though. Best to get as much as you can from the company!

              Employees are, broadly speaking, preferred creditors in a bankruptcy and entitlements are paid before most other debts. ("Other debts" includes gift vouchers; gift voucher holders are basically regular creditors.)

              There are some interesting possibilities here. If they paid the ATO money while technically insolvent, then the liquidation could try to recover that money from the ATO to pay to the employees. The ATO might then sue the directors outside the liquidation process. I am not saying that is the case here, but that is an example of something that can happen based on the employees having a vote. Another thing that can happen is the directors making a direct offer to the employees for their vote. It can get messy when the employees realise they have power here.

    Most stores i went to in hobart were full of employees who thought they were better than everyone else, like asking for their help required a payer and a sacrifice. glad to see them go :)

      Kinda the same in a way. I'm sure not all were bad but least the ones I've been to were.

      Came across this alot too. Cant say it means they deserve whats happening to them but a part of me cant help but smirk and think good riddance.

        Yeah it basically felt like they had some serious elitism going on, being better than other retailers, only store to every actually do it on a mass scale too... hmm

      Also from Hobart. I used to enjoy going in on my lunch break and listen to them giving "advice" to clueless customers. I'm sure not everyone who worked there were like that, but the majority I had interactions with and observed interacting with other people knew everything, but knew nothing!
      I was once told I needed an HDMI cable costing almost the same as the cheap blueray player I'd purchased for work. Never laughed so hard in my life

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