Absolutely gutting: Bay business liquidation a tough call
"ABSOLUTELY gutting" is how a director of the Cooloola Waters Retirement Resort labelled the decision to push the business into liquidation, despite it still running in the black.
Rodney Lohse, who ran Cooloola Retirement Villages with his mother Lorraine Gay Lohse, said the village had not only been a Tin Can Bay fixture for 30 years but was on financially stable footing.
MORE GYMPIE NEWS
"We're not in the red, there was no loss, there's no debt owing," Mr Lohse said.
"I'd say we're one of the most solvent villages in the state."
What tipped it over were changes to state legislation, which he said left them like "lab rats in a maze with no exit".
"My family's been in business in Gympie for 70 years," Mr Lohse said.
"We are not quitters.
"My mum and I have been banging our heads against the wall trying to solve this."
The Lohses ultimately moved into liquidation to get ahead of a looming problem and avoid any risk of insolvent trading; doing so carries potential criminal charges and leaves directors' assets at risk.
Under the State legislation, which requires retirement village operators to buy back properties unsold after 18 months, he was expecting to have to pay for 14 homes in the 18 months.
This left the company facing liabilities of $1.8-$2 million "depending on the valuation".
He said banks were reluctant to lend against a village's assets, particularly when the village residents would be listed as the first creditors if things went sideways.
This left the only possible solution to "pour $2 million of our own money in and borrow against our houses".
"But why would you do that?" Mr Lohse said.
He said the state's new laws left operators "like lab rats in a maze that has no exit".
The village's residents should be able stay at their homes, Mr Lohse said. But he believed those in homes across the state were "worse off" as a result of how this played out.