MOWBRAY College administrator James Downey has recommended the debt-ridden school be wound up.
The recommendation is made in a report released to the Weekly.
The independent school, which had two campuses in Caroline Springs and one in Melton, closed to students last month after collapsing under more than $18million debt.
Mr Downey said he believed the school should not be returned to the control of its directors. Rather, it would be placed into liquidation after a creditors’ meeting tomorrow. ‘‘The company is insolvent and no longer trading,’’ he said.
Mr Downey said issues that needed to be attended to included the school’s involvement with the Hua Mao Multicultural Education Academy in China.
He said it was too early to form a view as to the causes of the 30-year-old school’s collapse.
But he said it was likely to be a combination of high borrowings to fund capital expenditure, particularly at Caroline Springs; high operating costs; declining enrolments; slow payment of fees; high turnover of directors and key staff; and governance issues.
‘‘In the course of my investigations to date, I have not become aware of any offences by directors or officers. It will be for the liquidator to investigate the affairs of the company generally and report any breaches to ASIC [Australian Securities and Investments Commission],’’ he said.
Under the Corporations Act, a director who fails to prevent a company from incurring a debt when insolvent can be held liable.
Mr Downey said it appeared likely that the school had been insolvent for some time.
He said despite several parties suggesting the college could be rescued in time for the start of the third term this month, this was ‘‘a practical impossibility’’.
Mr Downey said many parents and staff had already made arrangements to relocate, ‘‘which would make a rescued school less viable in any event’’.
He said he had been approached with a proposal to re-open the kindergarten at the Brookside campus from next term. This arrangement could provide a small amount of rental income, be of assistance to the community and ‘‘possibly be attractive to a potential buyer’’.
A receiver or agent will be appointed this week by National Australia Bank to take control of the sale of real estate, buildings, contents and intellectual property assets at the three campuses.
‘‘I have already had expressions of interest from over 23 parties and I will be passing on their contact details to the bank’s agents, once they are appointed,’’ Mr Downey said.
Mowbray College representatives could not be reached for comment.
