The Worx Group - Case Update

Rob Kirman and Rob Brauer of McGrathNicol, the voluntary administrators of the Worx Group, have revealed what led to the downfall of the companies and whether a rescue has been forthcoming.

Worx Equipment and Worx Equipment Holdings are wholly-owned subsidiaries of Rigel Assets and specialise in the rental of mining and civil heavy earthmoving equipment and the provision of maintenance services in Western Australia. Worx Equipment is the operating and employing entity, while Worx Equipment Holdings is an asset holding entity.

The business held long-term contracts with blue-chip customers, two leased premises and a fleet of over 70 earthmoving machines. The Worx Group appears to have traded profitably in both fiscal 2023 and 2024, but financial performance materially deteriorated in fiscal 2025 due to, amongst other factors, onerous rent to purchase finance contracts, a dispute with one of the Worx Group’s largest debtors which resulted in the non-payment of invoices, as well the termination of Worx Equipment’s largest client contract on short notice.

The companies entered voluntary administration on 18 March. With the support of NAB (the Worx Group’s primary financier), the administrators conducted a sale/recapitalisation process for just over two weeks whilst operating the business. Four non-binding offers were received, but none were commercially viable and/or able to settle within the required timeframe. In the absence of a viable offer and adequate funding, the administrators made the decision to cease operations and commenced an orderly wind-down on 4 April.

At the same time that they were pursuing a sale, the administrators engaged Gordon Brothers to implement an asset realisation strategy in the event the sale process was unsuccessful. Gordon Brothers inspected and relocated the equipment to a secured yard and have prepared a formal valuation and sale proposal.

Interestingly, the administrators have formed the preliminary view that the Worx Group was insolvent since at least 1 July 2024, over eight months before the administrators were appointed. They note that the respondent to any potential insolvent trading claim is the companies’ sole director, Scott Wolfenden, and have undertaken preliminary investigations into his financial capacity to meet a successful claim against him. This review has revealed interests in various other companies as well as a real property in Perth. Mr Wolfenden has not yet provided a statement of his assets and liabilities, income and expenditures, as requested by the administrators. The administrators consider that there may be potential claims against Mr Wolfenden for allegedly breaching his duty of care and diligence, failing to act in good faith and in the best interests of creditors, and insolvent trading. Mr Wolfenden had initially submitted indicative DOCA terms for consideration by the administrators, but ultimately withdrew his intention to submit a DOCA proposal following discussions between the key parties.

First ranking secured creditor NAB is expected to receive a dividend of less than 10c/$ in the liquidation of Worx Equipment and less than 100c/$ in the liquidation of Worx Equipment Holdings. Secured creditors Arrowsmith Assets and Portzane are expected to receive a return of 2.7c/$, at the very most.

Read the administrators’ report HERE.