ASIC has exercised its wind up powers appointing liquidators to 13 abandoned companies to assist employees gain access to the Fair Entitlements Guarantee scheme (FEG).

The appointment of liquidators also facilitates a full and proper investigation into the reasons why the companies failed and allows recovery of any voidable or unreasonable director-related transactions.

The 13 abandoned companies owe at least 27 employees a total in excess of $556,000 in employee entitlements. The following companies were wound up between 11 April to 7 July 2016:

Background

The FEG is a legislative safety net scheme funded by the Australian Government. It is designed to assist employees recover unpaid employee entitlements because of their employer company’s liquidation or bankruptcy. In addition, the Department of Employment operates the 'Fair Entitlements Guarantee Recovery Programme'; a programme designed to strengthen recovery activity of amounts advanced under the FEG Scheme. More information about the scheme is available here.

Some employees owed entitlements cannot access FEG because the companies’ directors are either unable to discharge their duties or abandoned their insolvent companies without putting them into liquidation. ASIC’s appointment of liquidators facilitates access to FEG for these employees. ASIC first used its powers in 2013 (refer: 13-233MR) and to date has wound up  84 companies that owed a total of 258 employees more than $4.4 million in entitlements.