ASX-listed communications provider Clarity OSS has reached an agreement with the external administrator to setup a fund to pay 5 cents in the dollar to its unsecured creditors.
Clarity OSS – once known as Powerlan – owes over $14 million to unsecured creditors, according to a report by administrator Tim Heesh of TPH Insolvency. The portion owing to trade creditors is just over $900,000, with a loan to a now-insolvent subsidiary amounting to more than $11.3 million.
The deed of company arrangement sees a $159,293 fund created to settle debts with unsecured creditors. The administrator will pass the company back to the directors once the fund has been distributed.
In July, Clarity OSS’ shares were put under a trading halt with the ASX as its assets were sold to a then-unnamed US company, now confirmed by the administrator as Synchronoss Tech. The unsold remainder of the business was put under administration soon after.
The ASX has since announced that Clarity OSS has failed to pay its listing fee for the 2014-15 financial year.
The administrator reported last month that 19 staff were employed at the time of the asset sale, with 14 transferred to the new business. The five employees left behind are owed almost $1 million in pay and leave entitlements.
Heesh found that Clarity OSS failed after suffering “asset deficiencies” and copping “trading losses over an extended period”. Secured creditor CPS Investment Group forgave $14.5 million earlier this year in an attempt to improve the cash flow.
CPS plunged $30 million into Clarity OSS over the life of the company, and still had $8.5 million owing even after taking into past debt forgiveness agreements. CPS, owned by Clarity OSS director Dr Ian Campbell, was a 47.6 percent minority owner of Clarity OSS.
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