Creditors of failed manufacturing companies Ballarat Windows and Doors and Lontana have been advised they are likely to be left high and dry, with the companies owing more than $1.7 million.
Ballarat Windows and Doors sold its business and assets to Lontana in late 2016, with the latter company agreeing to take over existing contracts and works in progress.
However both companies went into liquidation within a month of each other in September and October last year. A report prepared by liquidator Robert Woods stated Ballarat Windows and Doors owed unsecured creditors more than $1.7 million, “however this may increase if creditors submit additional claims”.
“It appears that potential illegal phoenix activity has been engaged in whereby assets of the Company have been transferred for less than fair value to defeat creditors,” the statement read.
Timothy Spark had been the sole director of Ballarat Windows and Doors, while his wife Gail Spark was the only director of Lontana.
Among those left out of pocket was Matt Clark, who had spent $24,000 on windows to fit out a new house in Alfredton.
He has since had to purchase windows from a different company despite not recovering any of the lost funds from the previous transaction.
“I had a few abusive calls but eventually they just disconnected their phones,” Mr Clark said. “I’ll get by but some of these people have probably saved everything to make those purchases.”
A report by Lontana liquidator Suelen McCallum stated the company had 23 employees, including the director, and that $268,881 was still owed in outstanding entitlements.
As of January 9 liquidators had retrieved $52,290 from the sale of company assets.
“From its very inception, the company experienced cash flow issues which were inherited from the purchase of (Ballarat Windows and Doors’) business,” the document read.
“At this stage of the liquidation, it is highly unlikely that there will be any further dividend distribution to any class of creditors.”
Colin Bright was also among the customers who were left empty handed after spending $8000 on windows for a renovation on a central Ballarat property which he never received.
“We had to hold up the building project and we’ve lost quite a bit of money on top of the $8000,” he said.
The Ring Road premises has since been purchased by Cranbourne company Stock Windows and Doors and is now trading under the title Stylerite Windows and Doors.
The Courier was unable to contact Mr and Mrs Spark.