Brisbane IT solution provider Tech Project has pulled itself out of administration after creditors approved the director's deed of company arrangement (DOCA).
Creditors have accepted an arrangement where the directors will pay back $375,000, which works out to be 11-15 cents in the dollar, according to a report to creditors. Tech Project's claimed debts amounted to $2.8 million, including $1 million owed to the Australian Taxation Office.
The company was placed in voluntary administration in May citing cash flow problems. Last month, administrator Darren Vardy told CRN that Tech Project's rapid growth led to constrained liquidity, compounded with pressure from creditors.
There is also a claim from a related entity, Tech Project Holdings, to the tune of $1.6 million. However, the administrators said that records showed the amount is only $81,000, and further investigation is required.
“The company has grown significantly over the past four years since its foundation, having a sizable client footprint in Brisbane, Queensland as a managed services provider,” Vardy said previously.
“The company’s rapid growth has led to constrained liquidity and as a result of creditor pressure, the company entered into voluntary administration by resolution of its directors to complete a restructure."
A DOCA was agreed upon by creditors in order to keep the business running and increase the likelihood of a return to creditors.
Under the arrangement, control of Tech Project will be handed back to its directors, who will make monthly payments of $25,000 to the sum of $300,000. They will pay an additional $75,000 on top of that to cover the trading losses incurred during the administration.
If payments aren't made on time, creditors can vote on whether to vary or terminate the arrangement. The directors are also barred from winding up the company, and must take steps to avoid doing so.
Tech Project was founded in 2012 and offers IT services to SMB customers including managed services and cloud.