The failed company offloaded its assets to allegedly reduce redundancy payments.
Former Bruck Textile executives charged over $3.5m in staff entitlements
Three former executives of Bruck Textile Technologies have been charged with preventing recovery of employee entitlements following an ASIC investigation.
Philip Bart and Ronald Johnson, the former chair and chief financial officer of Bruck Textile Technologies respectively, appeared in Wangaratta Magistrates Court charged with one count each of preventing the recovery of employee entitlements.
Former chief executive Geoffrey Parker appeared on the same charge on 21 March 2022.
The ASIC investigation into Bruck Textile’s activities, conducted under the Serious Financial Crime Taskforce (SFCT), alleged that Mr Bart, Mr Johnson and Mr Parker entered into a transaction on or about 10 July 2014 to sell the assets of Bruck Textile to a related entity, Australian Textile Mills.
After the sale, Bruck Textile was considered insolvent and placed into liquidation on 11 July 2014, resulting in 58 employees losing their employment and access to entitlements, such as redundancy payments.
“It is alleged that Mr Parker, Mr Bart and Mr Johnson entered into the transaction to sell the assets of Bruck Textile to prevent or significantly reduce the amount of redundancy entitlements given to employees, estimated at over $3.48 million, in contravention of section 596AB of the Corporations Act 2001,” ASIC said.
Bruck Textile’s former employees applied under the Commonwealth Fair Entitlements Guarantee scheme for payment of their entitlements after Bruck Textile’s liquidators found that the company did not have sufficient assets to pay them.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
The charges against Mr Bart, Mr Johnson and Mr Parker will be listed for a committal mention hearing on a date to be confirmed.
Bruck Textile Technologies, incorporated on 29 May 1996, was a company based in Wangaratta that was engaged in textile manufacture.
At the time of the alleged offending, the maximum penalty for a breach of section 596AB of the Corporations Act was $170,000 or imprisonment for 10 years, or both.
ASIC’s investigation was assisted by the receipt of a comprehensive report prepared by Bruck Textile’s liquidators.
ASIC assisted the liquidators to investigate and report their findings by providing funding from the Assetless Administration Fund.
The investigation was conducted with the SFCT, which is an ATO-led joint agency taskforce that brings together the knowledge, resources and experience of relevant law enforcement and regulatory agencies to identify and address the most serious and complex forms of financial crime.
Since its establishment on 1 July 2015, the SFCT has raised more than $1.49 billion in liabilities, convicted and sentenced 15 people and collected more than $575 million as part of its operations.