Administrators for Kilmore’s Colmont School have been granted a three-month extension for the period until the second creditors meeting to allow them more time to fully investigate the school’s financial situation, and to consider proposals for re-opening the school.
Several creditors objected to the new administrators Cor Cordis’ proposal of a six-month extension, forcing the matter to be heard before the Supreme Court yesterday.
Cor Cordis was granted a three-month extension of the convening period. The court also noted that, if required, the administrators would be able to apply to the court for a further extension.
Cor Cordis released a media statement on Friday, which said it had not had time to focus on concluding an investigation into the school’s financial situation and corporate affairs to present at a second creditors meeting because it had been focused on the immediate priorities of the year 12 students who had been on site at the date of their appointment, and then transitioned to other schools.
“Our priorities upon appointment were the urgent transition of remaining students and staff to schools of their preference to the extent possible, the continued satisfaction of the company’s various statutory obligations regarding guardianship, maintaining security on the school grounds whilst students and staff remained, and other student wellbeing and duty of care obligations,” the statement read.
“During this time, we remained cognisant of the company’s numerous statutory obligations regarding student wellbeing.
“Consequently, throughout the transition period we continued to liaise with the VRQA, Department of Education and Training, and the Independent Schools Education Union so as to keep those organisations informed the ongoing status of the progress of transitioning students, and where relevant staff, to other schools.”
Cor Cordis were required to host a second creditors meeting by August 23 in order to provide a report on the investigations into company affairs and an administrators’ recommendation as to the best outcome to creditors regarding the future of the company.
Creditors will vote at the convened meeting as to whether the Company should either accept any proposal for an arrangement; resolve the company should return to the control of the directors; or that it is in the creditors’ best interests for the company to be placed into liquidation.
“An extension of the convening period will enable to us to progress discussions with an interested party regarding the future of the Colmont School and to seek and consider further proposals for the Colmont School’s reinstatement,” the statement read.
“This party, which we believe is unrelated to any existing stakeholders, has had discussions last week and this week with ourselves, the Victorian Registration and Qualifications Authority, VRQA, and a number of other stakeholders to progress their proposal for the Colmont School and also to provide consideration to creditors of the company.”
Cor Cordis says it had begun a data sweep of the school’s IT systems, likely to take six to eight weeks.
Cor Cordis believe it will take them two to three months to review the IT data, depending on volume.
“Review of such information is crucial for us to understand the Company’s position, and to progress any discussions with interested parties regarding a possible restructuring of the Company’s operations and/or reinstatement of the Colmont School in the best interests of the Company’s creditors,” the statement read.
“We have commenced investigations into the financial transactions of the company and have identified a number of agreements and transactions with related parties that require substantial further examination in order to determine whether there may be any claims under the Act to recover those payments for the benefit of creditors, in the event of liquidation.
“We have also commenced investigations into whether the company was trading whilst insolvent and whether the company’s directors may otherwise have breached their duties.
“All of these investigations are ongoing, and an extension of the convening period will enable us to substantively progress these investigations.”
Cor Cordis has not received any proposals for restructuring or recapitalisation of the company and its business, being the Colmont School.
“However, we are presently liaising with an interested party and providing them with information and guidance on the processes involved in progressing their proposal,” the statement read.
“As at the date of our application, we have been informed by the interested party that it intends to present a proposal to VRQA to reinstate the Colmont School in 2023 and wishes to seek discretion from the VRQA to utilise current school and boarding house registrations and the Colmont School’s registration in the Commonwealth Register of Institutions and Courses for Overseas Students, CRICOS.”
Cor Cordis has requested the VRQA consider suspending its intention to cancel Colmont School’s registration for a period of up to six months, or at least until the position on the application is known, to enable proper consideration of any proposals.
The administrators have estimated a total of $6,317,780 in total is owed, with the breakdown: employees $3,415,769; secured creditors $300,078; tuition and bonds $2,286,230; trade suppliers $315,723.
If the school was placed into liquidation and liquidators make a determination there are insufficient funds available to remit payment of employee entitlements or the recovery of such funds may take a considerable time, employees may be able to make an application under the Fair Entitlements Guarantee Scheme in respect of certain employee entitlements.
Cor Cordis has sought the transfer of all funds held by former administrators Vince and Associates.
“We understand the balance of funds currently held to be c.$1.56m, which we have not received, and we have requested these funds be provided urgently, noting they have remitted $276,921.18 to date,” the statement read.
“We require funds held by the former administrators to enable international student fees to be passed on to their new schools, as provided for under the Commonwealth Tuition Protection Scheme.”
Tuition fees paid by parents were not separated from the Colmont School’s operational accounts and form part of the balance of funds.
However, a Cor Cordis spokesperson said based on the court’s decision yesterday, they would not be able to access the funds at this point
in time.
The matter has been adjourned for hearing on September 22 to enable the former administrators to file an application for approval of their claimed remuneration and any supporting evidence, and for the administrators to file evidence and submissions in response.
“Once the hearing takes place, we will be in a position to inform creditors of next steps,” the spokesperson said.
