Claim Central’s unsecured creditors have voted for a deed of company arrangement as an alternative to the group entering liquidation.

At a meeting on Friday, businesses owed money approved the deed proposed by voluntary administrator Olvera.

If it is agreed, unsecured creditors are expected to receive 2.74c to 6.32c in the dollar. The plan cannot go ahead without the consent of bank CBA, a secured creditor.

Claim Central was founded in Sydney in 2000 by Brian Siemsen. The Australian property business, which managed assessment, restoration and repairs, stopped trading and entered voluntary administration last month after holding unsuccessful sale talks. 

Its failure was in part due to the loss of more than $50 million of work from Hollard and Commonwealth Insurance, an Olvera report says.

There was a sharp contraction in repair work volumes as key insurers internalised or consolidated restoration panels.

Rising labour and subcontractor costs could not be fully passed to insurers due to fixed-price and capped-rate arrangements, the report says.

And there were legacy debt and intercompany funding pressures, particularly obligations to Claim Central Consolidated and a CBA facility.

The business posted a loss of more than $2 million in fiscal 2024.

“The directors have advised that the loss of several materially large contracts, including Hollard, Woolworths Insurance and Commonwealth Insurance, contributed to the significant losses during that year,” the report says. “The loss of those contracts was a major contributor to the approximately $20 million reduction in revenue during 2024.”

Claim Central’s liability to unsecured creditors is $4.2 million, and related-party liability to unsecured creditors is $10.38 million.

Plumbers, fencers, painters and carpet companies are listed. Honey Insurance is owed $25,552 and Commonwealth Insurance $92,918. Gallagher Bassett, Flood Restoration Australia, the Tax Office and icare Workers Insurance are also named.

Nesmeis Investment – a related party of Mr Siemsen – is a secured creditor for $7.8 million, according to the report.

The deed proposal is expected to result in staff receiving all the $1.2 million they are owed, and a better return to unsecured creditors than if the business is wound up – but not the best possible amount for CBA, which is owed about $1.5 million.

CBA has two weeks to approve the proposal.