Creditors of web reseller E-store voted to place the company into liquidation at a creditors meeting in Sydney on Wednesday.
Ian Purchas, from administrator Star Dean Wilcocks, said creditors resolved to terminate the company's deed of company arrangement and put the company up for sale.
E-store closed its doors last week after failing to comply with the terms of the deed of company arrangement which was established in October 2001. It failed to make deed payments for the months of March and April.
Purchas said the administrator would place advertisements in The Sydney Morning Herald and The Australian Financial Review for the sale of the business as a going concern. He added that it was too early to tell how much creditors would receive from the sale of the business.
Recently, Purchas suggested to current E-store boss Gerard Farley that he consider not trading prior to the creditor's meeting due to the likelihood that the company would become insolvent.
Earlier this week, E-Store's original founder and current head of web reseller PC Advantage, Steve Spilly, said the demise of E-store was sad. "I think the writing was on the wall, a lot of good people left and it was just a matter of time. It was in no way a shock," Spilly said. He said the operation was a victim of its own success and it couldn't anticipate or build the infrastructure fast enough to support it.
Still, he said he looked at the E-store experience as an achievement, adding that PC Advantage is at a similar stage to E-store in its early days but "without any of the growing pains."
Over the past few months, The NSW Department of Fair Trading had been receiving customer complaints in relation to E-store over a backlog of unfulfilled orders. Christian Fanker, a spokesperson for the department, said the liquidation of E-store would "undoubtedly make it harder" for customers to get their money back. He said the department had been advising consumers, based on information received by E-store, that they should contact their credit card companies to reverse transactions placed with the e-tailer. He added that because the department doesn't regulate the retail industry "we're limited in what we can do."
"There isn't unfortunately much more we can do," he said.
The department had an arrangement in place with an E-store executive – which he declined to name – that has seen the executive liase with the department and try to resolve customer's problem with unfulfilled orders. He said over the past month "most complaints" under this arrangement had been satisfactorily resolved.