The meeting was told an investigation was ongoing into whether the business had traded while insolvent – meaning the business continued operating despite being unable to pay its debts. If proven, Kellock could be personally liable for some of the unpaid debts.

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“[Which means] the parties could pursue them [the directors], and if they can’t pay, they could potentially be made bankrupt,” Gammel said.

The company owes at least $391,000 to employees and a total of more than $2.9 million to unsecured creditors. About $382,000 of that is debt from related-party loans.

Gammel confirmed that employees would only be paid after BizCap – a secured creditor that had loaned money to the business.

“We’re working on trying to get some sort of surplus to be able to pay something to the employees. But at this stage, we can’t give you any certainty around that because we haven’t finalised the sale,” he told the meeting.

Gammel said former directors – including Kellock – could still be involved in any future sale of the businesses assets including the brand, a prospect that raised concerns among some creditors.

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