The Nardell Coal Corporation Pty Limited began operations in March 2001 with a very optimistic view of the future. However, less than two years after it commenced production it was placed in administration. While the major equity and debt holder (Macquarie Bank) reported losses on their investment in the mine, the security that it holds over Nardell's assets will help it recoup a very significant part of their investment. In contrast, at the time of writing this paper, it appears that the majority of unsecured creditors (estimated at $12 million)will be repaid at 35 cents in the dollar. This paper comments on several issues relating to the timing and manner in which Nardell was placed in administration and receivership. Questions remain as to why and how a company can cease operation very shortly after the issue of positive statements about its future.
Accounting Research Journal Vol. 17, Issue 1, p. 24-31