By Claire Reilly
Last week’s collapse of United Warranties – which saw three individual companies under the brand umbrella placed into liquidation – has left 100 employees in the lurch and more than 580 unsecured creditors, many of whom are retailers, looking to recover debts.
While the full bill is yet to be confirmed, the total owed to unsecured creditors by U-Nited Warranties Pty Ltd (one of the three companies in liquidation) is over $1.6 million.
Current.com.au has obtained documents from a meeting of United creditors, organised by liquidators Grant Thornton, which reveal the extent of the damage caused by the collapse and outline the nature of the company’s affairs.
The three companies placed into liquidation were United Electrical Holding Company, U-Nited Warranties and U-Nited Maintenance, all of which have “common directors and shareholders and are interrelated” according to Grant Thornton partner and liquidator Matthew Byrnes.
“U-Nited Warranties Pty Ltd (In Liquidation) held contracts with its clients in relation to the provision of extended warranties on electrical and other goods,” Byrnes wrote in a memorandum to creditors.
“U-Nited Maintenance Pty Ltd (In Liquidation) was established to complete the repair work of any goods that were subject to an extended warranty. It also provided the public general maintenance services for goods requiring repair. United Electrical Holding Company Pty Ltd (In Liquidation) is the parent entity and operated the administrative head office function.”
In the case of all three companies, the only secured creditor is National Australia Bank Limited, which is owed more than $5 million. Beyond that, the list of unsecured creditors reads as a who’s who of small-town electronics retailers and large multi-national suppliers.
Big name brands such as Electrolux, LG Electronics Australia, Hisense, Asko Appliances, Kenwood (car and audio) and Bush Australia are owed more than $30,000 combined.
Retailers also figure heavily in United’s ledger, with Myer owed more than $56,000 and The Good Guys more than $48,000. (Read The Good Guys statement regarding this debt)
However it is the smaller, regional retailers and service providers that may be forced to bear the brunt of the collapse. While many of these unsecured creditors are owed amounts totalling in the hundreds or low thousands, this shortfall is far more likely to be noticed by small operators compared to Australia’s big retailers.