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Kleenmaid creditors in face off with administ -

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Kleenmaid creditors in face off with administrators

The World Today - Thursday, 23 April , 2009 12:46:00

Reporter: Annie Guest

PETER CAVE: Creditors from the Kleenmaid appliance business are squaring off with the company's
administrators today. The Sunshine Coas- based company collapsed earlier this month owing
$76-million to employees, customers, banks and others. One woman says she had to cut short her
maternity leave after paying $5,000 for goods that never arrived.

The media was shut out of today's meeting but our reporter Annie Guest spoke outside to some of
those affected. Annie, what have they been saying?

ANNIE GUEST: Yes Peter, the meeting is still ongoing but some people are coming out who are leaving
early and they say that they're angry and disappointed and that the meeting has been quite fiery.

And they're particularly concerned to learn that the hole left behind is much bigger than they'd
anticipated. They're learning that the company collapsed owing $76-million when it went into
administration a fortnight ago.

Among those unsecured creditors are 4,000 customers, many of whom either paid deposits or some who
paid in full for appliances like ovens and fridges that never arrived. I spoke to one of those and
she's Brisbane resident Vanessa McPhee.

VANESSA MCPHEE: I'd paid for the item six months in advance which they hounded me for the money.
And we've just built a new home so I've got holes where a fridge should be and no range hood.

ANNIE GUEST: I can see you've got a small baby here. What sort of affect has it had on your family
to lose $5,000?

VANESSA MCPHEE: It's had a big impact. It's meant that I have to go back to work earlier than
anticipated. I'm currently on maternity leave. So obviously $5,000 out of a family income is quite
significant.

PETER CAVE: That was Kleenmaid customer Vanessa McPhee outside the meeting. Has any sense emerged
of how Kleenmaid managed to dig itself into this hole?

ANNIE GUEST: Well it's not yet clear Peter but some people are blaming the flow-on effects from the
global financial crisis for the woes that hit the Sunshine Coast-based company that had grown to
have up to 30 outlets around the country.

Some creditors are questioning whether Kleenmaid had been trading while insolvent. One of the 15 or
so owners of a franchise that actually traded in Kleenmaid's name told me outside the meeting that
he'd had trouble getting stock for a couple of months.

PETER CAVE: What's expected to be the final outcome? What's the best creditors can hope for?

ANNIE GUEST: Well today's meeting is the first of the creditors' meetings and it's actually to
elect a committee of creditors. They'll be representatives from the banks, customers, employees,
etc. But it's not looking good. The secured creditors are the banks, owed $28-million; customers
$27-million. And all up it's $63-million.

Those employees, 150 employees have lost their jobs. They're not looking likely to be paid their
entitlements.

The company has about $2.9-million worth of stock left and there's a claim over that for
$2.1-million so it's not a lot of money to cover those $76-million in debt.

PETER CAVE: Annie Guest live on the phone there from outside that creditors' meeting.