See text below.
EXCERPTS
The extent of the debt being carried by ABC Learning has emerged, with the company owing $1.6 billion, or $16,000 for each child in its care.
And now dozens more childcare centres are facing closure after the domino-like collapse of a rival company.
CFK Childcare Centres, which runs 43 creches in NSW caring for 4000 children, fell into voluntary administration yesterday, blaming its collapse on the failure of an $8.5 million deal to sell its centres to ABC Learning.
...
ABC Learning's administrator, Ferrier Hodgson partner Greg Moloney, revealed the scale of ABC's liabilities yesterday, and warned that key stakeholders were preparing to sue the company for alleged misleading and deceptive conduct.
Mr Molone told a creditors' meeting in Brisbane that 2,243 creditors were chasing $1.66 billion from ABC, which fell into receivership two weeks ago. Banks are owed $955million in secured debt, and 16,000 childcare staff are owed $31 million in holiday and long service leave - excluding any redundancy payments should they be necessary.
Unsecured creditors are also claiming $600 million in convertible notes, and $80 million in other debts.
Mr Moloney revealed that ABC also faced possible legal action by key shareholder Morgan Stanley for alleged misleading and deceptive conduct.
Morgan Stanley owns a 12.9per cent chunk of ABC, which it bailed out in March with a $780 million payment for 60per cent of ABC's US division.
...
ABC Learning's receiver begged parents not to pull their children out of ABC centres.
...
Responding to a report in The Australian yesterday that ABC was using clerical and management workers to plug staff shortages, Mr Honey insisted that all centres were complying with state licensing regulations.
Deputy Prime Minister Julia Gillard yesterday urged parents to contact the federal Government's childcare hotline (18002003) if they suspected any centre was understaffed.
Ms Gillard criticised 123 Careers boss Don Jones for frightening parents by threatening to shut down the 15 ABC-badged centres he owns. She said no childcare centre could close without giving 30 days' notice.
- reprinted from The Australian