Despite improved operational performance in the last 6 – 8 months, the Diocesan Car Fund Trust has been placed in voluntary administration.
In a letter to members of the trust, the Diocesan Car Fund Chairman, Br Pat Lynch, told its members that the Trust is no longer a going concern, and it does not have sufficient value with its cars to meet full repayment of the loans members have in the Trust.
Br Lynch said the shortfall is approximately $625,000 and the managed informal wind up is effective from 24 July.
Michael Curtis of Curtis McLean has been appointed administrator, and a contracted administrator is now managing the day to day work.
Acknowledging the Trust has suffered from a number of long term internal structural problems and that it may be in breach of some requirements of the Securities and the Reserve Bank Acts, the Trustees unanimously supported the option of the managed wind up.
The Trustees are working to put an equitable solution in place enabling ownership of the vehicles to be transferred to the Trusts’ members, if they so wish.
In a statement to CathNews, Br Lynch said he is keen to avoid a “fire sale” of cars which he says could depress the vehicles’ saleable value and which would be to the detriment of everyone. He said the Trust sought legal advice which recommended that a voluntary informal wind up is the best way forward.
Successive returns submitted to the Charities Commission record annual losses of $177,930 in 2010 and $76,364 in 2011 prompting auditors WHK to sound a warning to the Trustees.
In 2011 WHK also said they could not determine whether the Trust would be able to continue as a going concern and pay all its liabilities. WHK said they could not find sufficient appropriate independent evidence to support the $5.4m carrying value of the Trust’s fleet when compared to the Trust’s 31 March 2011 $51,060 net asset net value.
Br Lynch said it is sad to see it end.
“The Diocesan Car Fund has served its Members including clergy, religious and Church staff for many years, however the changes to the pieces of legislation that govern it and falling members have meant that it has outlived its purpose in its current structure.”
“The Church will of course continue on and arrangements are likely to be put in place to ensure clergy, religious and staff have their transport needs met in order to continue in their various roles serving the community,” said Br Lynch.
There are currently 260 members in the Diocesan Car Fund, compared to its peak, when General Manager Ray Lindsay said the Car Fund had 500 members.