Creditors of STA Travel have agreed with the administrators’ recommendation that the company be wound up, with the likelihood of a return not looking all that promising.
The company, which was placed into voluntary administration back in August, operated online travel agent services and a network of 27 shopfront outlets across Australia.
Its COVID-induced collapse coincided with that of Swiss parent company STA Travel Holding AG.
The administrators of STA Travel recommended in its report to creditors issued on 17 September that the company be placed into liquidation due to its insolvent status and no proposed deed of company arrangement.
The report noted that it was “very difficult” to estimate the outcome for creditors and customers, with claims totalling $69.8 million, but the return figures for both “unknown”.
“Please be aware that we have withheld the realisable value of a number of potentially recoverable assets so as to not jeopardise our efforts to recover those assets (i.e. they are commercially sensitive),” the administrators’ report read.
“If we receive monies from certain debtors which are deemed to be held on trust for customers, the relevant customer creditors will be those beneficiaries of those funds rather than the general body of creditors pursuant to Section 556 of the Corporations Act.”
Preliminary investigations to date by the administrators have not revealed any possible offences committed by STA Travel’s directors or potential recoverable voidable transactions.
However, the report noted that the company’s assets and financials are complicated and in need of ongoing investigation.
“STA Travel does not own the IT infrastructure, customer database or the STA Travel brand. Access to these assets by the company was via a license agreement,” the report read.
“The administrators have made contact with the Swiss parent to ascertain whether a global restructure may be put forward.
“However, as at the date of this report, we have had no response and consider a global restructure unlikely. Regrettably, without ownership of the operating assets, a restructure is unlikely to be able to be achieved.
“We consider the company may have sufficient realisable assets to enable payment of a dividend to priority unsecured creditors in the event the company is placed into liquidation.
“We also consider that there may be refunds due to certain classes of customers/creditors if we can establish that certain amounts are held on trust for customers.”
A second meeting of STA Travel’s creditors was then held on 25 September 2020, where it was decided that the company be wound up. A committee of inspection was also formed for the liquidation at the second meeting.