SmartCity had 'solvency concerns' six months ago
BREAKING: Smartcity Vocational College accountants met with liquidators six months before the college's administrative arm, SC Admin Pty Ltd, went bust.
The report to creditors distributed to former SC Admin staff and creditors by Worrells Solvency and Forensic Accountants yesterday showed SmartCity accountants and lawyers met with Worrells on June 1 to discuss "solvency concerns and insolvency options".
College accountants, directors and shareholders met with liquidators on June 15, again regarding "solvency and insolvency options".
On September 5 Worrells was advised it would be contacted in future if its services were required.
SC Admin entered voluntary liquidation on December 16.
- Staff say company hosted fire sale before collapse
- Students left in limbo as college fails to explain situation
- Hundreds jobless as admin firm goes bust
The liquidator's report to creditors says SC Admin Pty Ltd - directed by James Spong - acted as trustee for the SC Administrative Trust and was responsible for employment services for Sunshine Coast-based SmartCity Vocational College.
Reasons in the report for the company's insolvency were listed as: inadequate working capital; lack of accurate financial information and inadequate budgeting and financial management.
Creditors have been advised SmartCity Vocational College was operated by a separate entity - which is SmartCity Vocational College Pty Ltd - also directed by James Spong.
Worrells also met with entities associated with SmartCity Vocational College prior to SC Admin entering voluntary liquidation on December 16.
Liquidators met with James Spong and the director of Cooloola Training and Counselling Service Pty Ltd - which trading.gov.au lists as trading as Quest College - on September 8 to discuss its financial position and insolvency options.
On September 13 liquidators received a call from James Spong advising they were still having cash-flow issues and were "looking for investors to save the business".
Liquidators received a call on November 10 from accountants assisting James Spong as director of SC Admin Pty Ltd advising Mr Spong "would like to liquidate SC Admin Pty Ltd".
On November 17 the upfront fee ($8800) for liquidators to accept the appointment was confirmed with appointment documents sent on November 21.
The appointment was confirmed by liquidators to staff earlier this week, after Worrells took control of the company late last Friday night.
Worrells has estimated its fees to be about $50,000 for the liquidation of the company.
In his summary of the company's affairs, SC Admin director James Spong estimated sundry debtors owed about $39,911, of which about $5300 could be recovered.
SC Admin Pty Ltd had only $223.67 in the bank when Mr Spong signed the summary on December 16, but the amount of cash on hand was "unknown".
He estimated other company assets of $515,212, of which all could be recovered, but unsecured creditors were owed $630,000, of which Mr Spong was unsure how much could be recovered.
That $630,000 did not account for unpaid employee entitlements, Worrells partner Paul Nogueira said.
Staff this week told the Daily there had been a fire sale of office goods, laptops and furniture in the weeks leading up to SC Admin's downfall, while a strong push had been on through November to enrol and activate as many students as possible in the college.
Mr Spong has been unable to respond to more questions asked by the Daily today.
SC Admin's collapse left more than 300 staff jobless nationally with campuses across the country in Armadale, Bundaberg, Cairns, Caloundra, Elizabeth, Fairfield, Gympie, Hervey Bay, Hobart, Inala, Ipswich, Kippa-Ring, Launceston, Maroochydore, Morayfield, Rockhampton, Toowoomba and Townsville