The ATO took a second mortgage over a factory owned by a 75-year-old family company six months before it collapsed. Now administrators are asking why.
The ATO took a second mortgage over a factory owned by a 75-year-old family company six months before it collapsed. Now administrators are asking why.

Family company in $7m collapse as ATO move takes its toll

THE role of the Australian Taxation Office in the $7 million collapse of a 75-year-old Brisbane building products firm is being questioned by the company's administrators.

Directors of Wacol-based Sharp Plywood, which had worked on some of the state's most iconic public buildings, called in administrators in May after a fellow director launched a winding up action in the Supreme Court seeking a compulsory acquisition of her shares in the business.

Founded by Jack Sharp in 1945, the family business owns a substantial amount of property around its factory in the city's southern industrial heartland. But in recent years it had struggled against a rising tide of Chinese imports.

Gavin Morton, of insolvency firm Morton & Lee, has told creditors that the ATO registered a second mortgage over the company's premises in December, elevating it from an unsecured creditor to a secured one. Secured creditors get the first bite of the cherry in any wind-up of a company.

Morton says if Sharp is eventually wound up that transaction may be overturned given the ATO potentially knew the company was insolvent and it occurred within six months of the administrators being called in.

If that occurs the pool of funds available to unsecured creditors, including tradespeople and subbies, would be boosted by $1 million.

Sharp, which employed about 17 people manufacturing veneers and panels for kitchens, furniture, commercial fit outs, panels and doors, had worked on wood panelling for the Brisbane Supreme and District Court complex and the Abedian School of Architecture at Bond University.

Mr Morton says separate entity was continuing to operate the business from the Wacol site under a licensing agreement. He said this could allow the business to continue to operate after the end of the administration and creditors were paid.

Originally published as Family company in $7m collapse as Chinese imports take toll


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