Creditors have been given a take it or leave it offer of 25 cents in the dollar or full repayment over six years by the Perth Fashion Festival.
Saying it has “no other assets”, the failed festival has told creditors that if they don’t accept the arrangement, they will receive nothing because the company will go into liquidation.
Managed for two decades by Perth Fashion Festival Pty Ltd, the Fashion Council WA-owned festival ran into problems paying suppliers after the 2018 shows.
The co-directors of Perth Fashion Festival Pty Ltd are former journalist and stylist Mariella Harvey-Hanrahan and Perth Glory owner Tony Sage.
Sentinel Corporate Advisory have been engaged to manage the remuneration of unpaid creditors from last year’s event.
“Whilst neither option (25c in the $ or full repayment over 6 years) may be palatable to you, the fact of the matter is that the company has no capacity to make any other compromise, at this point in time,” Jack Blahut of Sentinel Corporate Advisory wrote in an email sent to creditors last week.
“All the revenue forecast from the licensing arrangement with FCWA is going to creditors.
“In fact even that is insufficient and the directors are topping that up personally.”
Blahut warned that any creditor who issued a statutory demand, “it will not be met”. But he added that if creditors took one of the two compromises offered, the company would be able to proceed with its “recapitalisation plans, look for new revenue opportunities and potentially pay the outstanding debts earlier”.