Book fire sale pays 11.7 million in employee entitlements

Melbourne bookstore Reader’s Feast will close its doors on 31 July as the last Australian REDgroup store, with stock fire sale enough to pay employees their full due.

Ferrier Hodgson, administrator for REDgroup Administrator Ferrier Hodgson will hold a second REDgroup creditors meeting to vote on a DOCA (Deed of Company Arrangement) proposal expected to pay unsecured creditors, including landlords and trade creditors around three cents in the dollar.

John Melluish, Administrator and Ferrier Hodgson partner, recommends creditors support the proposed DOCA at the 4 August meeting in Melbourne.

“Based on our investigations we do not believe that any dividend would be payable to unsecured creditors in any of the companies should they be placed in liquidation.”

According to the Administrators’ report, it was unlikely the Group was insolvent for any material period prior to its collapse, and no breaches of directors’ duties had been identified.

Dividends for unsecured creditors will be dependent on the final claims received in each creditor pool.