THREE weeks ago, insolvency accountants from SV Partners were called in to begin analysing the viability of the Timor Street Business.
Although voluntary administration can take several months to resolve, SV Partners manager NSW west, Sam Peacocke, said he was optimistic of the final outcome.
“Voluntary administration is generally a holding situation where an administrator is appointed to say to the creditors ‘we can’t pay you and we’re trying to work what the best thing to do is,’ – whether we continue to trade, whether we’ll sell, or put the business into liquidation,” Mr Peacocke explained.
“At this stage we won’t be putting Coona Foods Suppliers into liquidation, rather, it will continue to trade as normal until a decision has been made.
“We think the business has value and we think it can be made profitable, so we’re now working towards getting that sorted.”
Run by prominent local businessman, Bob Denman, Coona Food Suppliers employs 13 staff members.
“All directors have a requirement to endeavour to pay debts as and when they fall due,” Mr Peacocke said.
“Bob has been aware that he’s been struggling to pay certain creditors and he did exactly what he’s required to by the ACT – he did everything he was supposed to do.
“We’ve just got to work out what cuts we need to do to keep everything going.
“SV Partners is very hopeful we will get it turned around and sorted.”
A meeting was held with creditors in Coonabarabran on Monday, 13 August, while staff are attempting to shift old stock.
Rising fuel and production costs, global economic pressures and the introduction of the Federal Government’s carbon tax have had significant effects on small businesses, including Coona Food Suppliers.
“Businesses always have their own set of problems and if consumer confidence starts to fall, it might not be directly related to the carbon tax as it impacts on businesses, but it’s the fact that it affects people’s confidence and so they start to save and don’t buy all the little things that shops require to turn over to make a living,” Mr Peacocke said.
“I’m loathe to say, but I think the carbon tax has been the straw that broke the camel’s back.”
“It also seems to have a greater affect in smaller towns because they just haven’t got the fat (demand) the big cities have.
“Another problem is that the mean income isn’t as high in smaller towns, which means that things are already tight.
“If you go from tight to really tight it can mean the difference between profitable trading and unprofitable trading.”