Financial planning group Glenhurst Corporation (Glenhurst) is teetering on collapse with one of the group's bank accounts down to just $28,000 and a similar amount in unpaid professional indemnity (PI) insurance bills, company documents have revealed.
According to the minutes from a creditors meeting held on December 21 2007, Glenhurst acting chairman David Lofthouse said the company's PI insurance was due to expire.
However with $31,000 outstanding on the policy, and insufficient funds to pay, it looks unlikely the group will be able to retain its policy.
Lofthouse also claimed that it was likely the group would find itself in liquidation.
"An additional $27,000 has been receipted into the company's bank account which related to commissions received," Lofthouse said.
"The company's beneficial entitlement to retain the funds in question is yet to be resolved given that Glenhurst's business was taken over by Churchill Morgan Global."
This is the second blow for the embattled dealer group which was placed into administration on December 14 last year.
Lofthouse advised that the company's records didn't disclose a high number of trade creditors and noted that the principal claims against the company related to those that have arise from the collapse of the Westpoint group of companies.
While noting that the possibility of a deed proposal being received, Lofthouse said that at this stage it was likely that the company would proceed into liquidation.
"The chairman noted that there was the possibility that additional claims against the company may emerge in the event that the company is wound up or subject to a deed of company arrangement (deed)," the company notes said.
"The chairman advised that the joint and several administrators were required to undertake investigations into the company's affairs and in particular whether the company traded whilst insolvent."
Lofthouse said the joint and several administrators would conduct investigations into the company's assets and liabilities, together with its previous trading history.
He said creditors would be provided with a report of their investigation and recommendation prior of the second meeting of creditors.
Glenhurst was taken over by Churchill Morgan Global late last year under a new Australian Financial Services Licence.
However, company chief Tony Kofkin is understood to still be running the business and the company structure remains relatively unchanged.
In November, ASIC announced it intends to file lawsuits against five dealer groups, including Glenhurst, which the regulator says owes $7.1 million in damages to 78 investors.
It will also seek damages against Westpoint directors for 3650 investors of collapsed property lender.
