An Australian tour operator collapsed owing more than $3 million and investigations found just $616 left in the bank, according to a liquidator’s report.
The Sydney based company called Calypso Destinations was placed into liquidation in April.
Westburn Advisory liquidator Shumit Banerjee was appointed to oversee the liquidation.
His report revealed that unsecured creditors were owed $2.8 million, while there was almost $74,000 outstanding to one employee and secured creditors had debts of $224,000, a report to creditors filed with ASIC showed.
Calypso Destinations had operated as a sports travel agency and tour booking service provider before it ceased trading in mid April this year. This included organising sports tours for junior players and their coaches, some of which had represented NSW or Australia.
The company told Mr Banerjee that it had first encountered financial difficulties following the government imposed Covid-19 travel restrictions.
Mr Banerjee’s report outlined 14 reasons from the company on how these restrictions impacted its operation.
This included airlines and hotels failing to pay full refunds due to unexpected border closures and “high interest short term loans were required to support trading losses due to historical border closures, trip cancellations and variations”.
A federal government loan from the pandemic scheme taken out to ease cashflow resulted in the company taking on significant debt, the report outlined, while a “substantial increase in operating costs associated with the post Covid-19 travel industry were not passed on to clients in an attempt to regain loyalty”.
The company also blamed increased labour costs and difficulties in collecting outstanding debts prior to the due dates, while in some cases final payment were only being received the day before travel.
Meanwhile, the report stated that personal loans and funds from relatives were advanced to the company to reduce pressure from lenders, but they ultimately ended.
Then the cancellation of three tours in February 2024 forced the company to seek investment but this fell through in March and April this year, the report said.
Mr Banerjee said his investigations had uncovered a number of potential reasons for the business failure.
“My preliminary investigations indicate that the following factors may have also contributed to the company’s failure: undercapitalisation, poor strategic management of the business, poor cashflow and insufficient working capital, poor management of accounts receivable and
engagement in potential uncommercial/ unreasonable director-related transactions,” he wrote in the report filed with ASIC.
Calypso Destinations organised international tours for sports players and their coaches but as it faced increasing difficulties a number of tours were cancelled earlier this year, the report revealed.
This included a USA baseball tour and junior cricket tours to the Barbados and India.
Mr Banerjee warned that at this stage creditors were unlikely to see any money paid, despite some potentially unfair preference transactions identified in the report.
These transactions to a number of parties totalled $674,400 and included a $277,000 payment to AMEX and $104,000 to a hotel in India, which the company said there was “significant pressure received” so it paid the outstanding bill. However, the report said investigations were ongoing.
“It is difficult to determine whether a dividend will be made available based upon investigations undertaken to date and the status of various claims,” Mr Banerjee added.
“However, as I am required to report the likelihood of a dividend, I deem a dividend is currently unlikely.”
The report revealed there was potential insolvent trading amounting to $1.8 million but there could be a defence against the claim as there was $924,000 listed in loans to the company from the director.
“My investigations indicate that prima facie, the company traded while insolvent since at least around 1 July 2021,” the liquidator wrote in this report.
He said this conclusion was based on significant losses incurred during that financial year.
“My investigations to date indicate that currently there is a maximum potential claim against the director for insolvent trading of up to approximately $1.8 million,” he added.
“I note that the quantum of the claim may change following receipt of further records/ information, furthermore I note that the director may have a defence to any claim due to advances made to the company at certain times, same is subject to further investigation.”
sarah.sharples@news.com.au
