Credit: Photo 103769618 © Tero Vesalainen | Dreamstime.com
Publicly listed Hills and its related entities have appointed Sule Arnautovic and John Vouris of Hall Chadwick as joint administrators on 2 June.
The joint entities also include Hills Finance, Hills Integrated Solutions, Lan 1, T.V Rentals, New-Tone, Audio Products Group, Hospital Telecommunications and ACN 614 478 090.
In a statement to the Australian Securities Exchange (ASX), Hills said administrators were undertaking a preliminary review and assessment of all the companies' operations with a view to determine the extent to which companies can be restructured or recapitalised by a Deed of Company Arrangement or implementing a going concern sale of business of the companies.
An initial creditors meeting will be held on 15 June and the business is continuing in the ordinary course.
Hills suspended trading on the ASX on 25 May pending a resolution to ongoing settlement negotiations between its subsidiary, Hills Health Solutions and Stellar Vision Operations.
Hills Health Solutions had been in a court battle with Stellar Vision Operations, with the case initially dismissed by the court in February 2022 and costs were awarded in favour of Hills Health.
Stellar later appealed the decision and the judgment of the appeal was found in favour of Stellar to the amount of $5.5 million, exclusive of costs.
Hills and Stellar then entered into a deed to stand still and suspend all rights under the orders and in relation to the judgment, Hills told shareholders on 26 May.
On 25 May, Hills warned shareholders that it had been in negotiations with the parties and other stakeholders, including its financier, which if it wasn’t resolved, would have a significant impact on the company’s financial condition.
In 2013, Hills Health became a 50 per cent joint venture partner in a project with Stellar, and according to court documents last year, Stellar sought a declaration that Hills acted in breach of that trust and was seeking fiduciary duties owed in respect of the contract.
The contract in question was the supply of patient entertainment systems (PES) to hospitals in the Western Sydney Local Health District initially via Questek and Stellar, in 2013. Hills bought Questek in 2014 and at the time agreed to honour the deal. According to Stellar, the two failed demonstrations in 2014 were due to “inadequate hardware by Hills Health Solutions onto which the PES software was loaded on”.
According to court documents, Hills Health Solutions then informed Stellar that it had no alternative but to look for another supplier of PES for the project, with Hills then using the services of a company that it had been communication with since October 2013.
Last year, Hills sold its Security and Information Technology distribution division to Dicker Data as part of a $20 million deal at the time.
