Liquidation is now the only option for the 27-bed facility which is $11.1m in the red.
Creditors have voted to liquidate the only private mental hospital in a large swathe of regional southern Queensland after it was placed in administration with $11.1 million of debt on its books.
A creditors’ meeting on 6 June decided to wind up The Toowoomba Clinic, a 27-bed adult mental health clinic established in September 2020 for $9 million, leaving a few hospital staff to clean, scan documents and finalise the payroll.
The private hospital went into external administration on May 1, with Anne Meagher of SV Partners appointed to investigate its finances. That showed the company had been trading insolvent for almost three years, from June 30, 2021.
The Pechey Street building will be sold to recover some of the debt.
The 6 June meeting was attended by nine creditors and proxies, who are owed a total of $8.05 million.
About $593,000 is owed to employees, $1.3 million to the Australian Taxation Office, $6.4 million to Westpac Bank, and $2.6 million to Heal All Pty Ltd, which owns the building.
A lawyer for Heal All advised the meeting that there are Federal Court proceedings between The Toowoomba Clinic and Heal All “related to disputes between shareholders and former directors that were due to go to mediation on 21 June”, according to the Toowoomba Chronicle.
The dispute was related to the sale of assets. He further advised that he was instructed to write a letter of complaint to the Australian Securities and Exchange Commission following allegations in an earlier creditors’ report that The Toowoomba Clinic was trading insolvent.
If proven, the directors will be exposed to prosecution and could have their personal assets seized to pay down debts.