Huon boss is quizzed on Empire collapse

Former Huon corporation managing director John Davide Schulz endured about four hours of examination on the first day of a civil court proceeding brought by the Liquidators SimsPartners against the failed company.

A court ban on the publication of details of the examination was imposed yesterday, but The Advertiser believes SimsPartners is using the legal challenge as one avenue to recoup a gap between money made from the sale of Huon's assets, including the Bendigo East plant, and workers full entitlements.

But hopes of sourcing outstanding funds directly from Mr Schulz may be limited, given he declared himself bankrupt in June this year and presently lists himself as unemployed.

SimsPartners has realised about $13.5 million from the sale of Huon's three plants including the sale two months ago of Empire to Motherson Sumi in May, a figure that will bring about 270 redundant workers 60 to 70 per cent of their entitlements.

The total amount owed to creditors including the workers entitlements is about $20 million.

Also of interest to the investigations are potentially uncommercial payments highlighted in a creditor's report of September 2006 when Sims was recommending the liquidation of the company.

These include more than $1 million paid to consultants and advisers to John Schulz, $285,437 paid to EPax Pty Ltd, which he controlled, and a potentially unreasonable payment to Schulz of $246,594.

Another potential source of revenue in the long running demise of the failed company and possibly requiring further legal action is a $7 million insurance claim made by Huon Corporation with New Zealand insurer Contractors Bonding Limited to insure workers entitlements in the case of financial collapse.

The New Zealand firm is refusing to honour the transaction and a $650,000 premium paid by the company remains in trust.

The civil hearing continues today in Melbourne.