Fairstar debt re­cov­ery tough for City

Kalgoorlie Miner - - NEWS - An­drew Brosnan

The City of Kal­go­or­lie-Boul­der’s prospects of re­cov­er­ing a $635,000 debt ap­pear low, with staff in­di­cat­ing the cost of pur­su­ing liq­ui­da­tion ac­tion against Fairstar Resources would be in the realm of $60,000.

A three-year cam­paign to re­cover the money owed by Fairstar has proven un­suc­cess­ful, and took a fur­ther hit when a se­cured cred­i­tor re­cently sent in re­ceivers to re­cover a debt un­der­stood to be more than $2 mil­lion.

The City is now weigh­ing whether to pur­sue a wind-up mo­tion to put Fairstar into liq­ui­da­tion, or wait un­til the re­ceiver­ship is com­plete and re­assess op­tions.

Act­ing chief ex­ec­u­tive Braden Fisher said with­out know­ing what as­sets Fairstar held and which as­sets were in the hands of re­ceivers, it was dif­fi­cult to de­ter­mine what would be “left over” when the re­ceiver­ship was com­plete.

“Though the City still has the op­tion to com­mence wind­ing up pro­ceed­ings and put the com­pany into liq­ui­da­tion, whilst in re­ceiver­ship, the liq­uida­tor will only be able to deal with those as­sets not sub­ject of the charge,” he said.

“The City needs to con­sider whether it wants to spend money now in putting the com­pany into liq­ui­da­tion, with the likely chance it will not re­ceive any div­i­dends, or let the re­ceiver­ship process take its course and re­assess en­force­ment op­tions once the se­cured cred­i­tor’s charge has been sat­is­fied.”

Fairstar’s debt to the City has ac­cu­mu­lated through un­paid rates on min­ing ten­e­ments, out­stand­ing Emer­gency Ser­vices Levy fees and the cost of le­gal ac­tion to pur­sue those charges.

Le­gal ac­tion against Fairstar be­gan when the City lodged a gen­eral pro­ce­dure claim in Oc­to­ber 2012, which the com­pany de­fended.

Mr Fisher said solic­i­tors from Perth-based le­gal firm Price Sier­akowski, act­ing on be­half of the City and its debt col­lec­tors, even­tu­ally ne­go­ti­ated a deed of set­tle­ment to set up a pay­ment ar­range­ment.

But he said Fairstar de­faulted on that pay­ment plan, the last of which was due on Novem­ber 11.

In July, PBB Ad­vi­sory’s Guy Theobald was sent to sell enough of the charged as­sets to re­pay the debt owed to the se­cured cred­i­tor, Fairstar’s former chief ge­ol­o­gist Shel­don Coates.

Fairstar’s quar­terly re­port re­leased in June showed the com­pany had a cash bal­ance of $34,000.

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