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ISCOVER
After two months in administration Refund Home Loans could be sold as early as next week.
Speaking to The Adviser, Refund administrator SV Partner's David Stimpson said he was confident of completing a sale before Christmas.
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"We are currently in negotiations with half a dozen interested buyers," Mr Stimpson said.
"I am anticipating that between now and the end of next week, we will have executed a contract."
While Mr Stimpson said he was originally hopeful that the contract would be settled upon before Christmas, it now looks likely that the sale will be officially finalised and settled in the New Year.
When that happens, Mr Stimpson said Refund franchisees can expect to receive all outstanding commissions.
"Since my appointment, all commissions on loans have been paid. However, there are still some brokers that have not been paid their commissions from prior to my appointment. These will be paid upon settlement of the sale," he said.
But the promise of honouring commission payment upon sale of the business will be of little consolation to many Refund franchisees especially with Christmas now just around the corner.
The damage to Refund may also have a material impact on the value of the brokerage group with franchisees reportedly departing in droves.
Speaking to The Adviser, a Refund franchisee, who wished to remain anonymous, said brokers were so disgruntled that they were terminating their contract.
According to SV Partners, almost 20 per cent of all the franchisees have now terminated or are in the process of terminating their contracts.
"Whilst termination does strictly forgo the right to ongoing trail under the franchise agreements, there are claims in place with the administrator for amounts owed, including the value of the trail book for each franchisee, unexpired portion of the franchise fee, advertising levies that have been misappropriated, and unpaid up-front and trail commissions," the franchisee said.
"Every franchisee that I have communicated with who has issued notices of termination are not prepared to withdraw them. Some have finalised their termination in the last week or so, mine formally takes place between Christmas and New Year – and frankly I can't wait for the day to come around because it will be a relief!"
But Mr Stimpson said it was not in the franchisees best interest to terminate their contracts.
"I know it has been difficult, but all going well, I expect to settle the sale early in the New year, at which time all brokers will be paid any outstanding commissions."
