Furniture Spot staff shown the door

Staff at the Cannington warehouse supplying Furniture Spot stores have been laid off following the collapse of a family company associated with the chain.

WestBusiness understands that half of about a dozen warehouse workers and truck drivers were rehired by another company belonging to a member of Melbourne's Dimarelos family.

Employees with more than 20 years service were among those let go on Tuesday. They were advised to seek outstanding entitlements through a Federal Government scheme.

Paul Dimarelos' DIM Furniture (Vic) was put into administration earlier this month with estimated debts of about $13 million.

The warehouse workers who have been rehired are understood to have been employed by Furniture Retail Group, a company owned by Mr Dimarelos' son Peter.

Creditors and employees owed about $6 million were angered mid-year when Paul Dimarelos' Furniture Spot Pty Ltd was liquidated after selling the assets of the five stores to Furniture Retail Group.

Most of the creditors of DIM Furniture (Vic) are other Dimarelos family companies. Dimarelos Property Holdings has the biggest claim of $5.6 million.

Administrator Glenn Crisp of insolvency firm Jirsch Sutherland told a creditors meeting last Friday that there were sales deals for the assets of DIM Furniture (Vic).

Mr Crisp said the agreements would be investigated and summarised in a report to creditors. He also flagged a proposal by Paul Dimarelos to revive the company.

Minutes from the meeting showed that a logistics provider's attempt to form a creditors committee was voted down by a representative for 17 Dimarelos companies and their advisory firms.

When contacted by WestBusiness, Paul Dimarelos declined to comment.

WA Newspapers is a creditor of Furniture Spot Pty Ltd.

peter.williams@wanews.com.au