Creditors of failed group Retail Adventures, which ran discount chain Chickenfeed, have scored a legal win in their battle against the company's owner, Jan Cameron.
Cameron, who also founded the Kathmandu chain of outdoor stores, bought the company, Retail Adventures, from its then-administrators in 2009 for A$85 million, but the venture did not succeed and it again collapsed in October last year, owing creditors A$170m (NZ$185m).
The NSW Supreme Court has found a deed of company arrangement pushed through by Cameron "unreasonably prejudiced" other creditors, litigation funder Bentham IMF told the ASX.
On Monday, Justice Stephen Robb ordered the company be wound up, but stayed the order until today to give Cameron time to appeal.
But Bentham IMF has also detailed plans to go after Cameron and other directors personally.
Under Cameron's deal, creditors were to claw back a maximum of A6.5c in each dollar owed. However, administrators Deloitte estimated that if directors and preferential creditors were pursued, winding up the group would return between A21c and A45c in the dollar.
Deloitte estimated A$20m in preferential payments could be recovered and pursuing directors for insolvent trading could net between A$19m and A$33m.
In a report in August, Deloitte administrator Vaughan Strawbridge warned creditors against taking the deal offered by Cameron's private company, Bicheno.
He said there was no certainty Bicheno could come up with the A$5.5m it was due to pay by next month.
However, at a meeting on September 2, creditors voted to accept the deal and hand the company back to Cameron.
Within a fortnight, Bentham IMF, which had already been considering a class action, applied to the Supreme Court to have the deed of company arrangement set aside.
"Once RAPL [Retail Adventures] is wound up, IMF proposes to fund the liquidators to pursue various claims against the directors of RAPL and others," IMF told the exchange.
About 80 creditors owed A$30m have signed on to the IMF-funded class action.
A hearing on the question of an appeal is set down for today.
- Fairfax Media