Bunbury case to have input into inquiry

A former Bunbury businessman whose profitable hotel was put into receivership in 2011 will form part of the recently announced Insolvency Practices Inquiry.

In October the Australian Small Business and Family Enterprise Ombudsman launched the inquiry to consider how small business owners were treated during the insolvency period.

According to the Ombudsman, a former inquiry into small business loans identified a lack of transparency for small business owners when creditors commenced debt recovery.

In 2003 Sean Butler bought the Lighthouse Beach Resort in Bunbury, rebuilt it and got it up and running again.

In 2011 Mr Butler and his then business partner decided to wind up the relationship and the property was put up for sale.

His business partner attempted to purchase the property but did not meet the settlement date and Bankwest subsequently put it into receivership.

Mr Butler said at that stage the business was recording record profits and he could have continued paying back the loan.

The move sparked an increase on his interest rates from 7 per cent to 18 per cent and a call for him to pay a $200,000 fee to extend his loan for another five months.

Trying to save his profitable business, he attempted to buy out the property with an investment partner who was willing to refinance it, but it was eventually sold for less than its market value.

“If this hadn’t have happened I would still own half of the hotel and still be going. I lost the business I’ve built,” Mr Butler said.

He has been lobbying for several years for a more open and transparent process.

During a Senate estimates hearing in October this year, One Nation leader Pauline Hanson questioned whether multinational companies such as US firm FTI Consulting would be investigated in the Ombudsman’s inquiry.

She said FTI Consulting had bought up Australian liquidators before the mediation processes and left companies like Mr Butler’s high and dry.