Liquidators for the collapsed medicinal cannabis company Creso Pharma have secured a crucial legal victory, obtaining court approval to investigate the firm's former contract packagers. This move is a key step in their pursuit of more than $20 million owed to creditors.
Court Greenlights Investigative Powers
The Supreme Court of New South Wales has granted orders allowing the liquidators from Worrells Solvency & Forensic Accountants to formally examine the entities that handled packaging for Creso Pharma. The primary target is Mirabela Packing Services Pty Ltd, which operated from a facility in Dandenong South, Victoria.
According to court documents, the investigation will also extend to associated companies and individuals, including Mirabela Nicotra Pty Ltd and company director Tony Lew. The court's authorisation empowers the liquidators to demand books, records, and other critical documents related to the packing agreements and financial dealings with Creso Pharma.
Unravelling a Multi-Million Dollar Collapse
Creso Pharma, which was once listed on the Australian Securities Exchange (ASX: CPH) and later on the Canadian Securities Exchange (CSE: CPH), entered voluntary administration in April 2023 before being placed into liquidation in August of the same year. The company's failure left a significant shortfall for those it owed money to.
The liquidators' report to creditors reveals a stark picture. While they have identified total claims of approximately $33.9 million, the estimated deficiency—the gap between debts and realisable assets—stands at a staggering $20.6 million. Unsecured creditors are facing the prospect of receiving zero cents on the dollar for their claims.
The pursuit of the packing companies is central to the liquidators' efforts to recover funds. Their initial investigations suggest that significant transactions flowed between Creso Pharma and the Mirabela entities in the lead-up to the company's collapse. The court-approved probe is designed to uncover whether any unfair preferences, uncommercial transactions, or other recoverable payments were made.
The Path Forward for Creditors
With the court orders in hand, the liquidators can now proceed with a formal evidence-gathering process. This will involve issuing notices to produce documents and potentially conducting examinations under oath. The goal is to piece together the final months of Creso Pharma's operations and determine if any assets can be clawed back for the benefit of all creditors.
The case underscores the extensive powers available to liquidators under Australian corporate law when investigating the affairs of a failed company. For the creditors owed millions, this legal step represents a glimmer of hope in an otherwise bleak recovery process. The outcome of the investigation could dictate whether any funds are ultimately available for distribution.
All eyes will now be on the findings from the packagers, as the liquidators work to fulfil their duty to maximise returns from the remnants of the Creso Pharma collapse.
