Toowong Private Hospital's purchase of artwork off director questioned by administrators
The administrators' report states that at the time of the transaction, the company N.A. KRATZMANN & SONS PTY. LTD., which operates Toowong Private Hospital, "was experiencing financial difficulty" and purchasing the artwork from the director "does not appear to have been to the benefit of the company".
Administrators believe the artwork is still in the director's possession.
It was not clear why the company entered into the transaction with its sole director, Wayne Kratzmann, in June 2024, according to the voluntary administrators' report.
However, administrators said that before the sale "the artwork was valued by a valuer, and the sale amount which was paid to the director was returned to the company and offset against related party debts owed to the company".
The report states there was a long-term loan arrangement between the director and the company, with $1.4 million outstanding.
Preliminary investigations showed the sale may "constitute an unreasonable director related transaction", according to the report.
But administrators said, "further investigations are required to… confirm if the consideration for the transaction was at arm's length, and if so, the artwork into the void can be recovered and realised for the benefit of creditors".
The report said the company had faced "mounting financial pressures due to the increased operating costs in the psychiatric care sector, compounded by impacts of COVID".
Administrators said it appeared to have operated on thin margins historically, experiencing increasing strain over the past five years.
Net losses amounted to $4.7m from FY22 to FY24, and the company was unable to sell the hospital in mid-2024.
The director anticipated in May the company was likely to become insolvent and administrators were appointed.
The hospital was expected to cease all trading on Wednesday, with administrators providing staff with notice about the end of their employment.
Administrators said at this stage they believed it was "in the best interests of the creditors that the company is wound up".
The ABC has made attempts to contact Mr Kratzmann for comment.
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