Retail, Innovation and Manufacturing reporter for the NZ Herald

Receivers target Dick Smith management

Receivers for Dick Smith are attempting to recoup money owed from former directors and executives. Photo / Nick Reed
Receivers for Dick Smith are attempting to recoup money owed from former directors and executives. Photo / Nick Reed

Almost a year and a half after electronics retailer Dick Smith collapsed, its executives and directors have been hit with legal action in a last attempt to recoup some of the company's more than $400 million debt.

Receivers for Dick Smith, from the firm Ferrier Hodgson, confirmed they had commenced legal proceedings.

The Australian Financial Review (AFR) reported yesterday that eight former Dick Smith directors and executives have been served notice to appear in the New South Wales Supreme Court over allegations they failed to put in place adequate systems in relation to rebates and inventory management.

A spokesperson for the receivers said the company was seeking to recover amounts equal to the 2015 interim and final dividend which it alleged were wrongly paid out, as well as its losses arising from its inventory management.

The dividend claim has been reported to be about $27 million with losses from the purchase of bad stock estimated to be tens of millions of dollars.

The spokesperson for the receivers said National Australia Bank Limited and HSBC Bank Australia Limited have also made claims against the former chief executive and chief financial officer based on the circumstances under which they agreed to provide finance to the company.

The receivers have also issued legal action against the insurers that provided cover for the directors and executives.

- NZ Herald

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