- To access all of your local news, visit newcastleherald.com.au directly. Our home page is updated with the latest headlines from across the region and the nation.
- You can even stay up to date by clicking here and signing up for free to our newsletters.
- If you value local journalism, support us by subscribing here
- To download the Newcastle Herald app, click here
NEWCASTLE Jets creditors, owed more than $13 million, will receive no return and staff will be left vying for any remaining funds in the collapsed company.
Liquidator Jeff Shute, of Shaw Gidley Insolvency Reconstruction, said on Wednesday that he was still tallying the amount owed to employees, but he expected the company's debt to grow by more than $500,000 due to staff entitlements.
Employees will be forced to rely on the federal government's Fair Entitlements Guarantee (FEG), which picks up the tab for workers' entitlements when their employer collapses without enough money to cover them.
Mr Shute said about half of the money claimed by staff was owed to former chief executive Lawrie McKinna, who would not be eligible to claim under FEG because he was a director of the failed company.
"If any money becomes available for distribution, employee liabilities will have to be paid out in full prior to any funds becoming available to ordinary unsecured creditors," he said.
"At this stage it is uncertain whether there will be a return to employee creditors or not. Unfortunately there will not be any return to ordinary unsecured creditors."
Several small businesses have been left tens of thousands of dollars out of pocket from the liquidation of the Martin Lee-owned Jets after an already tough 12 months due to COVID-19.
Among the creditors is Doc's Megasave Chemist at Marketown, which is owed $35,384.31.
Chemist owner James Reid said the impact had been tough for the small business, particularly with the added pinch from COVID-19 last year.
"It's obviously disappointing, the impact on a small business is huge," he said. "Like all other businesses, we've done it tough. But we're still here, we're still alive."
The Jets were wound up in January with debts of $12.927 million, according to documents filed with the Australian Securities and Investments Commission (ASIC) in January.
Football Australia has handed control of the club to a new company, bankrolled by the owners of four rival clubs, which is working to support those affected.
The company has no contractual liability to service the former company's debts.
Mr Reid said his chemist had lost more than 30 per cent of it's turnover due to the pandemic, and the Jets situation would have further cashflow implications.
He said the business had managed to get through to now without losing any staff, but that could be at risk.
The business has sponsored the Jets for several years through providing strapping tape and pharmaceutical services.
"At the moment we are still sponsoring, but this could impact future decisions to sponsor," Mr Reid said.
Viv Sportings, which supplies uniforms for the team and sells Jets merchandise both on game day and through the new store on King Street, is owed $45,102.
Owner Viv Chauhan said he was "working with new company to work out what's best for us" and was hopeful of recouping the money.
The business has an ongoing contract with the Jets for the next three years.
"They're supporting us, it's all a work in progress," he said.
Mr Shute said the failed company's financial position was worse than indicated in the initial report to ASIC last month.
He said the report lists $535,201 owed to the Jets from academy players, sponsors and merchandise sales, but it was unlikely the money would be recovered because the company could no longer fill its obligations.
The report also lists that the Jets had $1.12 million in 'other assets' but creditors will be unlikely to see the majority of those funds.
According to Mr Shute, the 'other assets' included more than $300,000 in Bartercard funds, that he said had been overestimated in value and any return could be as low as 10 cents in the dollar.
Other funds included $252,000 owed by members and $416,000 due in cash and contra from sponsors that would not be collected as the company was no longer operating.
More than $80,000 was due in JobKeeper payments and that had been collected by the liquidator.
About $50,000 was paid by the Jets as a deposit to Venues NSW, but that money be offset against rent owed to the organisation.
Mr Lee is listed as the company's major creditor, with $8.598 million outstanding, while the Australian Tax Office is owed $2 million.
Rather than contribute capital, the Chinese businessman appears to have funded the club through a series of loans from his other companies.
Former coach Carl Robinson, his assistant Kenny Miller, current Newcastle Jets staff and a raft of Hunter businesses are among 70 creditors.
The new owners have agreed to honour sponsorship agreements and membership entitlements that were in place before the takeover.
Executive chairman Shane Mattiske said the new entity would do everything it could to support local people and businesses left out of pocket from the liquidation.
"We are bearing all the costs but the majority of that money is gone," Mr Mattiske said. "Any money paid before January 6 has gone into the old entity and is now in the hands of the liquidator."
IN THE NEWS: