Corporate undertakers Ferrier Hodgson and McGrathNicol may serve different masters in managing the demise of distressed retailer Dick Smith, but they have a common goal.
That goal is to preserve as much value in the beleaguered business as possible to extract the top sale price from 45 suitors who've stepped forward to pick over Dick Smith's carcass.
Dick Smith employees 'a significant group of creditors'
Dick Smith administrators address creditors at a meeting in Sydney on Thursday.
The pair have moved swiftly to protect Dick Smith's already savaged reputation, fronting a group of creditors in Sydney's Wesley Centre on Thursday.
"We are supporting the receivers as best we can to make sure they have a stable environment within which to make those offers," voluntary administrator McGrathNicol partner, Joseph Hayes, said.
"It's an iconic brand in which there will be a lot of interest. A sale of the entire network to a well capitalised buyer who wants to properly leverage that brand... would release the most value."
By March, Mr Hayes expects to have a general idea of how much creditors can expect to claw back form the $400 million-plus they are owed.
Some of the offers for Dick Smith may come from opportunistic business owners with their eye on multiple stores, retailers looking to expand their footprint by buying the entire franchise, or companies seeking to snap up the group's existing stock.
Ferrier Hodgson, which is acting on behalf of banks owed $140 million of the overall debt pile, has ordered Dick Smith staff not to speak to media in an official letter. It has also directed them not to discuss Dick Smith's financial perils with customers.
Dick Smith has 1750 permanent and 1550 casual staff, who are owed $15 million in employee wages, annual and long service leave.
Receivers sacked 12 staff in the group's support office on Thursday, across a variety of departments, following a 10-day examination of its trading position and structure.
In a letter to staff seen by Fairfax Media, Ferrier Hodgson receivers James Stewart, Jim Sarantinos and Ryan Eagle said: "The decision regarding which employees to make redundant was based on the predicted ongoing needs of the Dick Smith Group in the restructured environment.
"It is not in any way a reflection of the employees' performance or work ethic."
Dick Smith also owes $140 million in secured debt to its lenders, National Australia Bank and HSBC, and employee wages, taking the total amount to over $400 million.
McGrathNicol were appointed as advisers to Dick Smith's management team two days before Christmas, but the information was not disclosed to the public who were busy shopping for presents – including Dick Smith gift cards that are no longer honoured at the stores.
Mr Hayes said it was not unusual for companies under financial pressure to appoint advisers, and declined to comment whether the appointment should have been disclosed to the market.
The administrator acknowledged the lost deposits and gift cards that are no longer redeemable by customers, noting they were "the legal reality facing creditors".
Despite Dick Smith's high profile fall from grace, not a single question was asked of McGrathNicol at the first meeting.
More than 100 interested parties representing 350-plus unsecured creditors, owed about $250 million, including trade creditors, landlords and some 3300 employees, showed up at the meeting.
Dick Smith also owes $140 million in secured debt to its lenders, National Australia Bank and HSBC, and employee wages – taking the total amount to over $400 million.
McGrathNicol created a 12-member creditors advisory committee as part of the proceedings on Thursday, including representatives from Westfield, Macquarie Bank, QBE Insurance Group, technology distributor Ingram Micro Australia and unions.
The administrators will apply to delay the crucial second creditors meeting for six months to properly assess complex sale transactions.
"It's our expectation that the meeting period will be extended by the consent of the court," Mr Hayes said.
He said such an application was "reasonably routine".
McGrathNicol also warned that more claims could arise as the Dick Smith saga unfolds.
The creditors meeting comes four days after former chief executive Nick Abboud stepped down from the helm of the group.
Retail veteran Don Grover was appointed by receiver Ferrier Hodgson to become the company's interim chief executive. The 30-year retail guru was formerly in charge of footwear chains Diana Ferrari, Williams, Mathers and Colorado as Fusion Retail Brand's CEO and managing director.
He also headed up bookseller Dymocks, and held roles in David Jones.
Mr Abboud took the reins at Dick Smith when private equity firm Anchorage Capital Partners bought the company from Woolworths in November 2012 for $115 million.
He helped turn around the Dick Smith business, which was publicly listed for $520 million just over a year later.
Of the 12 subsidiaries in the Dick Smith Group, 11 are in administration and nine are in receivership.
But Apple reseller, Mac 1, is not in receivership. A separate creditors' meeting was held on Thursday morning in relation to Mac 1.