JOHN Farragher Transport Management director John Farragher wants to buy back his business but the liquidator says the final decision will rest with the bank.
As the Newcastle Herald reported earlier this month the iconic Hunter transport business is in the hands of a liquidator.
Corporate records show various Farragher companies either going into voluntary administration or liquidation over the past decade, and former staff owed money have alleged the latest liquidation was a ‘‘phoenix’’ that would allow the group to escape its creditors but trade on under a new name.
Liquidator Adam Shepard of Sydney insolvency firm Farnsworth Shepard said he was well aware of the Farragher group’s history and said the liquidation would be above board.
Although a final report is yet to be written, Mr Shepard said the company he was liquidating had debts of at least $5million, with another $1million or so in debts to unsecured creditors contained in two other Farragher companies he (Mr Shepard) was not involved with.
Mr Shepard said John Farragher Transport Management’s debts were likely to top $5million, with $2million of that owed to the tax office.
Debts in other Farragher companies that he was not involved with would likely add another $1million.
Mr Shepard said even though Mr Farragher still wanted to run the business he said the businessman could be held personally liable for hundreds of thousands of dollars in unpaid superannuation guarantee payments and was potentially facing personal bankruptcy.
Despite this, a letter sent this week from Mr Farragher to Mr Shepard sets out Mr Farragher’s plan to ‘‘provide a formal offer in two parts’’ for the business.
The part of the offer involving the company’s Cameron Park site was ‘‘subject to a new lease being agreed to by the owners/landlord’’.
Mr Shepard confirmed that the site was owned by Mr Farragher’s wife, Pam, and two other investors including former insolvency expert John Star.
He said about $300,000 was owed in rent at Cameron Park and that Mr Star and the other partner were not inclined to give Farragher’s a new lease.
He said Mr Farragher was entitled to put in an offer but the bank owed the secured debt would have the final say on any offer, regardless of who it came from.
Apart from Mr Farragher’s offer there had been ‘‘some interest in buying the business and that a refundable $5000 deposit to lodge a bid had been dropped to speed up the sale process.
A family spokesman, Rory Farragher, declined to comment.