Claims fraud brought trucking company to its knees
NSW Police have confirmed they are investigating allegations of fraud at Flynn Transport.
The company went into voluntary liquidation yesterday with director Tony Flynn partly blaming the company's demise on the actions of a former employee.
Today it was confirmed that detectives from Richmond Local Area Command have been investigating the fraud allegation for some time.
Forensic accountants have been contracted to conduct analysis of the company's books in a process which could take several months.
Meanwhile, several more Flynn employees have come forward to claim they are owed tens of thousands of dollars in superannuation entitlements from the company.
One man claimed he was owed close to $40,000; another driver said he was owed about $15,000.
Driver Paul Elvyn claimed to be owed an estimated $20,000, and said his pay slips had listed the correct 9.5% super amounts, but the amounts weren't actually paid into his super account.
Flynn Transport owing about $2.5 million
Flynn Transport owes an estimated $2.5 million to unsecured creditors, according to the forensic accountant handling the liquidation of the company.
Morgan Lane, a partner at Insolvency firm Worrells, said three companies which comprised Flynn Transport were being wound up and it was estimated that two of them carried the debts.
One of them, Flynn Transport (NSW) Pty Ltd, owed an estimated $1.5 million, while the other, NSW Employment Company Pty Ltd, owed $1 million.
"At the moment it is in very early stages and we are still trying to work through a lot of the figures," Mr Lane said.
According to the company's own paperwork it could optimistically expect to receive a surplus of $2.3 million from the sale of its assets in the main holding company, Flynn Transport Pty Ltd, which may go a long way towards covering outstanding employee entitlements.
It's unknown how long the liquidation process could take.
60 left out of work as company shuts down
ALSTONVILLE-based Flynn Transport has suddenly shut its gates after 27 years this morning, leaving more than 60 people jobless.
Employees were informed at a staff meeting that the business was struggling with debt problems and director and founder Tony Flynn had opted to liquidate the company's assets.
Mr Flynn told The Northern Star he had made the decision to close the company only last Monday after discovering that the business was unsustainable due to "legacy tax debt".
He said the issue wasn't identified until the company had a "complete overview" of its finances earlier this year.
"We could have kept trading for another six months but there was no point continuing if the business was continuing to rack up debt," Mr Flynn said.
Forensic accountancy firm Worrells has been appointed to liquidate the company and its staff were on-site at the company's Kays Lane headquarters this morning carrying out boxes of paperwork and inspecting trucks.
According to a declaration of solvency filed with the Australian Securities and Investments Commission last Friday, the company has assets worth $9.75 million, and $7.4 million in liabilities, which includes $206,000 owing to unsecured creditors.
That leaves a surplus of $2.3 million, according to the company's paperwork.
However, Mr Flynn said he couldn't guarantee that employees would receive their full redundancy entitlements or outstanding superannuation obligations from the company, but pledged to do "all I can".
That's because Flynn Transport comprises three ASIC-registered companies, not one.
According to Worrells, the two other companies were insolvent: Flynn Transport (NSW) Pty Ltd, the trading entity, and NSW Employment Company Pty Ltd, the employment company.
These companies have been placed into a creditors' voluntary liquidation.
Both have liabilities which outweigh their assets including substantial unsecured creditor debt (which includes employees' entitlements).
Mr Flynn said "part of the reason" for the company's situation was a former employee who was currently under investigation by NSW Police.
The news has devastated the company's loyal workforce of some 50 drivers and 10 office staff, the vast majority whom live locally.
Driver Paul Elvin said he had been with Flynn for six years and was told out of the blue last Wednesday there was no more work.
Mr Elvin took out a fresh mortgage on a Goonellabah home six months ago and will have no income in two weeks.
"I rang the bank and they said I've got two months, otherwise I'll lose the house," he said.
"There's 50 drivers out of work in a small town and we're all fighting for the same jobs."
Mr Elvin said he was angry about not being paid his full entitlements. He estimated he was owed about $20,000 in unpaid superannuation.
Fellow driver Kerry Howe described the news as "gut wrenching".
"I'm on my eighth year (at Flynn)," he said.
"The rug's been pulled out from under us."
Mr Howe said at its peak last year the company had almost 120 staff working 70 trucks and 120 trailers, but had downsized in recent months.
He estimated he was still owed two and a half years' worth of unpaid superannuation.
Darren Goodwin said he'd been at Flynn since 2009, and felt "crushed".
"Everyone I've spoken to feels absolutely empty," he said.