A liquidator is investigating the sale of the Furniture Spot business to the owner's son shortly before the trading company collapsed owing creditors about $6 million.
Hall Chadwick representatives told a creditors meeting yesterday that Apostolos (Paul) Dimarelos had sold the retail chain to son Peter for $1.7 million in a non-cash transaction.
The accountancy firm has warned creditors to expect no payout from the liquidated trading company, which was left with "minimal" assets.
Thirty-seven terminated employees and existing staff owed outstanding sums were advised to seek compensation from a government scheme.
Five of the discount furniture stores in WA have continued operating under Peter Dimarelos' Furniture Retail Group after Paul Dimarelos put his trading company Furniture Spot Pty Ltd into liquidation on June 25. Melbourne-based Mr Dimarelos Sr told Hall Chadwick at the time that the company could no longer pay its debts.
Peter Dimarelos, 26, had been managing the business in WA under the former ownership. He is the only director and sole shareholder of Furniture Retail Group.
Creditors and suppliers were told by email last week that old accounts had been cancelled and they would need to renegotiate terms and arrangements.
About nine WA Furniture Spot stores have been closed in the past 12 months. Landlords of the former outlets are among creditors of the trading company.
Hall Chadwick partner David Ross said the $1.7 million purchase price included $1.5 million in stock and was financed against secured debt of holding company DIM Furniture (VIC).
DIM Furniture (VIC) is owned by Paul Dimarelos and is the only secured creditor of Furniture Spot Pty Ltd, claiming a $3 million debt.
Mr Ross said the liquidator was making investigations regarding the commerciality of the sale of the business, and was seeking advice on the merits of the sale.
He said those inquiries into the affairs of the company would include so-called voidable transactions. Hall Chadwick had engaged a valuer to gauge whether the assets were sold at a fair price.
A report would be prepared for creditors. "We don't have all the answers at this point in time," Mr Ross said.
Unsecured creditors, including West Australian Newspapers, claim debts of about $2.5 million. According to Hall Chadwick, the Australian Taxation Office is the biggest with a $580,000 debt. Employees are owed at least $470,000, excluding unpaid redundancies.
A sole trader who claims to be owed a five-figure sum said: "It's a big deal for me."
He said he had not been paid for work done since late last year. "I should have cut them off a long time back," he said.
Peter Dimarelos had not responded to questions about Furniture Spot at time of publication.
We don't have all the answers."
- David Ross * Hall Chadwick partner