Failed Caravan Company Australian Off Road Accused of Trading While Insolvent for Three Years

A Queensland caravan manufacturer that collapsed in September may have been trading while insolvent for over three years, according to administrators. Australian Off Road (AOR) owes creditors $14 million and nearly 50 customers face losing $2.25 million after making progress payments toward caravans that were not built.

Administrators DVT McLeods detailed fresh allegations against directors Russell Evans and Steve Budden in a report to creditors, saying AOR may have been insolvent since at least June 30, 2023. Potential offences identified include insolvent trading, reckless or intentional dishonesty, failure to act in good faith, and improper use of position to gain advantage.

"We have a preliminary view that the company traded whilst insolvent from at least 30 June 2023," the report stated.

Sandra Muller from NSW Southern Highlands stands to lose $101,000 after paying $101,000 towards her caravan, which was not built. The administrators said further investigations were required and that the results would be reported to the corporate regulator.

Director Russell Evans is one of two parties offering to purchase the company out of administration, pitching to investors seeking $2 million to resurrect AOR. His proposal offered 20 cents in the dollar for the company's assets, while existing debts would not carry across. The pitch pledged to "recognise customers who paid deposits" and "investigate practical solutions for affected customers" but did not clarify whether all progress payments would be honoured.

"to establish a new, financially disciplined premium off-road caravan manufacturing business"

Mr. Evans said the new business would have "a clean financial structure" and "a clear pathway to sustainable profitability and growth".

AOR made a loss in three of the past four financial years and had a negative asset position of $3 million when it collapsed. The administrators recommended creditors vote to delay the next meeting to allow time to sell the business.

"If the company was placed into liquidation, it is unlikely that there would be a distribution to the unsecured creditors [including customers]," the report said. Administrators are claiming $283,000 for their services, more than 10 times their initial estimate.