KLEENMAID IN COURT: How a web of loans brought it down
A DELOITTE insolvency expert has told a court how the loans between Kleenmaid-run companies brought the company down.
Richard Hughes, a Deloitte financial advisory partner, told the Brisbane District Court on Monday a web of loans ensured that when one Kleenmaid-run company was declared insolvent, the many others collapsed with it.
Former Kleenmaid directors Andrew Eric Young, 62, and Bradley Wendell Young, 44, have pleaded not guilty to fraud and running the company while it was insolvent.
The former Sunshine Coast-based whitegoods company collapsed in April 2009.
The court has heard Kleenmaid was made up of a number of companies organised into two groups - the Orchard Group and the Corporate Groups.
Mr Hughes said despite the separation between the companies, they were intertwined with loans from one feeding cash into others.
He said the spare parts arm Edis had loaned the Kleenmaid Pty Ltd company money, which had in turn loaned money to the Orchard KM company.
Mr Hughes told the court when the Orchard KM company was declared insolvent, it meant the main assets of the other two companies could not be paid, and they in turn were insolvent.
Under cross-examination, Mr Hughes said Deloitte had not completed cash flow or balance sheet reports on the Kleenmaid businesses.
The Kleenmaid brand was sold in 2009 to Compass Capital Partners, and the company now operates out of Sydney.
The hearing will continue on Tuesday for another 11 weeks. - ARM NEWSDESK