Creditors of discount department store Harris Scarfe have voted to sell the business to Spotlight Group through a deed of company arrangement.
The DOCA will result in unsecured creditors losing money while the firm’s sole secured creditor, Allegro Funds, will be paid in full.
“The Administrators have conducted extensive investigations into the security held by the secured creditor (Allegro), [and] the security was found to be valid and enforceable,” Administrator BDO said in a statement to Inside Retail.
According to a report by the AFR, Allegro will be paid $70 million through the DOCA, while unsecured creditors will receive between 1.3 and 20.5 cents in the dollar.
Unsecured creditors are owed between $146 million and $236 million.
The deal will see the business continue to trade under new ownership and will result in ongoing employment and supplier relations continuing, according to BDO.
However, in anticipation of its sale to Spotlight Group the retailer made 59 of its staff redundant as part of a wider restructuring. A spokesperson for receiver Deloitte said the decision wasn’t easy, but that all affected employees were paid entitlements in full.
These redundancies were made on top of the more than 450 staff let go during Harris Scarfe’s voluntary administration when 21 stores were shuttered.