Information for investors of Reef House Resort.
As previously advised, the Receivers have executed a Sale of Business and Sale of Property Agreement for the Reef House Resort following a robust sales process that was conducted in accordance with the requirements of the Court.
The sale was subject to approval of the Court which was granted by an Order dated 17 December 2010. Copies of the relevant Court documents, including the affidavit of the Receiver, Orders of 17 December 2010 and reasons for judgement published on 22 December 2010 are available.
The substantial challenges associated with the property (including the $1 million additional funding required to undertake substantial renovation works) and the ability to sell hospitality properties in the area were outlined in the application to the Court.
Settlement of the property has occurred, effective from 20 April 2011.
Based on the sales price achieved, the impact on stakeholders is:
- Employees – All employees will be offered positions with the purchaser who will accept responsibility for all employee entitlements.
- Receivership funding – The secured lender has provided substantial facilities to enable the business to continue to trade during the receivership period. This funding is expected to be repaid in full.
- Secured debt – Insufficient funds will be realised on the sale to repay the debt owed to the secured creditor.
- Unsecured creditors – As the secured creditor will not be repaid in full, there will be no funds available for valid trust claims by pre-receivership unsecured creditors.
- Common pool for Investors - As the secured creditor will not be repaid in full, there will be no funds available to include in the common pool for Investors.