PGP Group - Case Update

An issue pertaining to employee entitlements has arisen in the administration of PGP Group, a Waterfall, New South Wales-based provider of seasonal labour services for horticulture, cotton and general farming.

Daniel Walley, Adam Colley and Mahala Hazell of PwC were appointed joint administrators of the company on 30 October after the impact of the COVID-19 pandemic, including costs related to quarantining employees, PPE and accommodation and transportation costs to adhere to social distancing requirements, increased the company’s cost base. In addition, according to the joint administrators, the company lacked proper control of its employees’ payroll accounts and applied a historical approach to accounting on a cash rather than accrual basis, which resulted in a lack of visibility into the company’s true financial position.

Shortly before the holidays, the company’s creditors voted to accept a DOCA, which provides for control of the company and the business to be returned to its directors and pre-appointment unsecured claims to be transferred to a creditors’ trust to be administered by Alan Walker and Glenn Livingstone of WLP Restructuring. The company’s managing director said employee entitlements would be paid in full through the trust. However, given the issues with the company’s financial controls, the joint administrators have raised concerns as to the accuracy of the company’s accounts and the amounts owed to employees, stating they may be understated.

The joint administrators’ reports to creditors can be accessed here.