The future of embattled surfwear chain Surfstitch is set to be determined in three weeks’ time, according to a statement released today by the company’s administrators, John Park, Quentin Olde and Joseph Hansell of FTI Consulting.
The statement announced a second meeting of creditors will take place in Sydney on 4 April in order to determine the future of the companies and outcome of the voluntary administrations of Surfstitch Group Limited and Surfstitch Holdings Pty Limited.
The administrators stated it would be in creditors’ interest to execute a deed of company arrangement proposed by Ezibuy Holdings Ltd, a multi-channel apparel and homewares retailer that started as a mail order business in New Zealand nearly 40 years ago.
It is the second deed of company arrangement presented to creditors since Surfstitch went into voluntary administration last year. Non-executive director Abigail Cheadle submitted a proposal before the first creditors’ meeting in September.
Cheadle’s proposal, which was contingent on the settlement of the $20 million Crown Financial Group litigation and class actions, would have paid back major creditors by swapping debt for equity.
According to the AFR, however, the administrators abandoned the proposal, as well as separate reverse listing proposals from online retailers The Iconic and General Pants, late last year because they were considered “unworkable”.
The Crown legal action has since by settled, but Surfstitch still faces a $100 million class action filed on behalf of shareholders by Quinn Emanuel Urquhart & Sullivan.
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