“I still have massive respect for what the Derrimut team has built and wish them nothing but success in the future.”
In a show of force on Friday, lawyers for nine different creditors to the business appeared at the Federal Court hearing on the company’s liquidation, arguing Derrimut should provide more documents to prove refinancing its debt is possible.
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Two new businesses — power company Origin and finance company Equity Trustees — joined on Thursday to support the ATO’s Federal Court fight, putting the total being claimed by listed creditors at more than $2 million.
The Tax Office is seeking to appoint liquidators to Derrimut’s primary entity to claw back $12.5 million in tax debts, including unpaid superannuation and penalties.
ATO lawyer Seraphina Smith sought a further adjournment of four weeks, after reaching an agreement with Derrimut to allow them time to “take steps to address the debts owed to all creditors”.
The adjournment was opposed by a number of major supporting creditors, including energy provider AGL, Derrimut’s former landlord Bourke Street Properties, and gym equipment company Life Fitness. They are a fraction of the businesses chasing late payments from Derrimut.
The creditors were seeking a shorter adjournment time from the Federal Court and more documents detailing whether the business could be solvent in the future.
The Derrimut gym in Oakleigh East.Credit: Joe Armao
Solicitor Matthew Hicks, representing Life Fitness, told the hearing he was “really in the dark” as to what financing needed a further four weeks to organise, considering three similar previous adjournments.
“There’s simply no evidence that we’re aware of and certainly nothing that’s been filed to demonstrate the solvency of the defendant, to demonstrate what … refinance is being sought,” he said.
The case was adjourned to November 28.
Solomos had been publicly upbeat about his company’s future after he and Portelli announced a possible deal with a highly produced social media video last month.
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The Tax Office is also separately seeking to wind up a now-dormant company owned by Solomos with a claim of another $2.9 million in unpaid taxes.
Finance sources have estimated that to settle his tax debts, Solomos will require about $15 million, and at least another $15 million to clear tardy debts owed to hundreds of creditors.
Derrimut’s sprawling gym sites in Thomastown and Ravenhall, which have thousands of members between them, are set to be vacated and sold by an insolvency firm, along with the company’s corporate office in the suburb of Derrimut.
Sale documents show the outer-suburban properties are being offered vacant to prospective buyers, with expressions of interest due by December 4. They are being rushed to market under the instruction of receivers, Rodger Reidy, who were appointed in September by debt-chasing lenders.
A source with knowledge of the sale, who was not authorised to comment publicly, said the properties were expected to fetch a total of $30 million.
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However, it’s unlikely that earnings from the sale would meaningfully assist Derrimut in repaying its spiralling debts. All three properties are encumbered by loans with business lenders including N1, Vance Finance and Bizcap.
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