Home > Creditors vote to liquidate Forge Group

Creditors vote to liquidate Forge Group

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Forge Group will be placed into liquidation after a vote by creditors and former employees in Perth.

The wind-up order clears the way for the sale of assets so payments can be made to those left out of pocket since the company’s collapse.

Administrator, Ferrier Hodgson, says Forge owes around $800 million to creditors. It will now oversee the liquidation.

Between $45 and $50 million of those debts are owed to around 1,600 workers with the vote meaning they can now access a Federal Government-funded compensation scheme for staff of collapsed companies.

However the timing of any pay out to workers, who were left without their final wages or any entitlements after the collapse, is still unclear.

Administrator Martin Jones says former workers may have to wait until December, ABC reported.

"The estimated time frame for processing the application is about three to four months from the Government's perspective, adding on another three to four weeks for us to get some precision around detail," he said.

"That's five or six months. But I caution expectations that this is the processing of 1,600 claims, not 16 or 160, and that's going to take some resources, some logistics to work their way through."

Jones said it was too early to say when creditors would see their money, but noted secured creditors like ANZ would receive the most.

He said it would be difficult for unsecured creditors such as suppliers to receive money owed.

"Based on the assets, what's owed to secured creditors, I think that is going to be a challenge for those physical assets to generate more than what's owed to the financiers," he said.

Ferrier Hodgson has attributed the abrupt collapse of Forge to a downturn in the resource sector, cost blowouts due to subordinate engineering work and "insufficient process and risk control measures".

 Forge called in administrators on February 11 after ANZ Bank withdrew its support for the embattled company.

As part the investigation into the collapse, Ferrier Hodgson are looking into whether the company was trading insolvent.

It is also investigating decisions made by Forge’s directors before the collapse, including the payment of bonuses to directors.

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