The Administrators of the company formerly known as Soundwave Pty Ltd have recommended the arrangement struck between creditors and the directors be torn up. It's also been revealed that the other AJ Maddah company in the mix – Hounds Of Hell Pty Ltd – was placed into liquidation on 7th January.
Administrators Deloitte have today written to creditors recommending that the Deed Of Company Arrangement (DOCA) which bound Soundwave and its creditors to a deal whereby creditors would receive up to 25c in the dollar from:
• $600.000 from Hounds Of Hell Pty Ltd
• 50% of the net profit from Soundwave 2016, and
• $12,000 licence fees from HOH monthly
be terminated and that the company now be (mercifully) wound up.
In essence, the two major contributors to the Soundwave bailout scheme have evaporated. The first – Soundwave 2016 profits – were known to have disappeared when AJ Maddah announced the cancellation in December, but the second – Hounds Of Hell Pty Ltd's $600,000 – now seems almost certain to amount to zip with that company being placed into liquidation. Today's news all-but-condemns creditors to a total loss realising zero cents in the dollar.
For those keeping score, the adminsitrators won't miss out. To date their remuneration tallies a lazy $228,660 with a further $100,000 being sought for approval at the creditors meeting set down for the 5th February.
Secured creditors, including those with personal guarantees, may not fare much better even if Maddah declares bankruptcy (or someone helps him get there) unless he has some serious assets stashed. The weight of debt is so great that secured creditors may not collectively realise a substantial return. Especially if administrators are appointed and have a feed first.
