Smilestyler Solutions - Case Update

Robert Smith and Shaun Fraser of McGrath Nicol have provided a report to creditors on their administration of Smilestyler Solutions, a Victoria manufacturer of dental aligners.

The company entered voluntary administration on 5 December after suffering from decreased sales during and after the pandemic. The company was unprofitable and heavily reliant on funding from associated entities, including one that has entered liquidation, and significant capital raisings.

Since being appointed, the joint administrators’ investigations have identified several potential claims which may be available to a liquidator, including a potential $9.1 million insolvent trading claim and a potential uncommercial transaction claim relating to the granting of an ALLPAP security to the Matthew W Bailey Family Trust in March 2022.

The administrators have received a DOCA proposal from Paul Docherty and Mark Dinnison which is conditional on financing being obtained. The DOCA provides for a payment of 100 cents in the dollar to priority creditors and an estimated 8.4 cents in the dollar to unsecured creditors. The administrators have recommended that creditors enter into the proposed DOCA, assuming the $250,000 deposit is paid prior to the second meeting of creditors on 19 January.

Read the report here.