The liquidator of telco South Western Wireless Communications Company (SWWCC) claims that the company engaged in questionable transactions and may have traded insolvent.
Adam Shepard of appointed liquidator Farnsworth Shepard said the company’s debt forgiveness transactions were uncommercial and may constitute unfair preferences, which are considered to be voidable under the Corporations Act of 2001.
The debts involved SWWCC director Geoffrey Peach and related companies Data Warehousing Services (DWS) and TUPS Company.
Worth a combined $9 million, the debts were forgiven and the companies instead acquired shares in a then-newly constituted holding company called South Western Wireless Holdings, significantly reducing SWWCC’s liabilities to the two companies.
The company’s dealings with cleaning products manufacturer Deltapak were also questioned, when it subleased SWWCC’s office space without having to pay rent. Deltapak is owned by the son of SWWCC director Peter Bartter.
SWWCC’s acquisition of software from DWS worth $3.5 million is also being questioned.
Shepard also found that Peach and Bartter also personally guaranteed some of the company’s creditors, specifically lessors of some leased equipment.
According to the corporations act, the liquidator can recover any benefits from insolvent transactions that have been discharged a personal liability, involving any of SWWCC’s related entities.
SWWCC called in administrators in March, with debts of $71,000 to Vocus and more than $53,000 to TPG subsidiary AAPT. Its assets were sold to Sydney-based cloud solutions provider Field Solutions Group (FSG).
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