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ABC Learning Centres overstated assets by $1.2bn

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Author: 
Fraser, Andrew
Publication Date: 
2 Jun 2010
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EXCERPTS

A report presented to creditors of failed childcare operator ABC
Learning Centres has found that the company overstated the value of its
assets by $1.2 billion in the first half of 2008.

A meeting of creditors in Brisbane this morning voted to formally
wind up the company, which at its peak was Australia's biggest
childcare operator and the second-largest childcare operator in the
world.

The 29 people at the meeting all voted unanimously to wind up the
company, which has debts totalling $1.9bn.

Administrator Peter Walker told the creditors that the process of
selling the 100 or so childcare centres that were in the ABC chain
should be completed by the end of June.

He anticipated that it would be at least three months before
creditors got some idea of how much money they would be able to get
back.

"What the auditors did in finalizing the '08 year was to look at
the assets overstated in the books, and the view that they formed was
that the assets were overstated by about $1.2 billion," said Mr Walker
outside the meeting.

"It leads to demonstrating at a point in time that the company
was insolvent. Our view hasn't changed in that -- we believe that some
time in the first half of 2008, they were trading while insolvent."

-reprinted from the Australian

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Entered Date: 
2 Jun 2010
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