SMALL creditors of failed painting and services business Riley Shelley, co-owned by Perth businessman Ian Riley, are unlikely to retrieve their money after it was revealed that major bank ANZ would be paid first.
SMALL creditors of failed painting and services business Riley Shelley, co-owned by Perth businessman Ian Riley, are unlikely to retrieve their money after it was revealed that major bank ANZ would be paid first.
A representative of one creditor told WA Business News that information disclosed at last week's creditor meeting in Perth indicated unsecured creditors would not receive the amounts due.
"It's still early days, but the administrator can give us enough information to form a picture and that picture is pretty gloomy," the company representative said.
National facilities manager Spotless Group bought the assets and naming rights of Riley Shelley late last month, leaving the remains of the company to fall into administration.
Even though Spotless said in February it would pay about $20 million upfront for Riley Shelley, it subsequently halved its offer to buy the distressed company, which had been hurt by the economic downturn.
Mr Riley said last week he did not receive any of the $10 million sale price.
It is understood ANZ took the bulk, or all, of the $10 million and is still owed at least another couple of million dollars.
ANZ is a secured creditor and will be paid before any of the small 500 or so unsecured creditors.
Paint supplier Dulux is owed just under $300,000, while Taubmans is understood to be about $500,000 out of pocket, which includes an outstanding debt from supplying the paint for a Housing New South Wales project.
Housing NSW contracted Spotless which contracted Riley Shelley, which in turn employed sub-contractors to complete a project earlier this year.
A Housing NSW spokeswoman said Spotless indicated it had paid all sub-contractors, which includes Riley Shelley.
"Payment of subsequent contractors and suppliers of Riley Shelley is not a matter for Housing NSW," the spokeswoman said.
Riley Shelley was formed in 1995 through a merger between Mr Riley's WA-based Woodbridge Riley and Associates and Mike Shelley's Queensland-based Shelley Contracting.
The business was placed into administration on April 28, which was the same day Spotless announced to the market it had bought the assets of Riley Shelley.
Administrator KordaMentha told creditors it didn't know how much money would be left after bank debts were paid.
The administrator said its first job was to collect any outstanding money owed to Riley Shelley, and to determine whether there had been any preference payments made before the company went into administration.
