The trustee appointed to oversee the collapse of Toronto-based Ritchies Auctioneers has presented a damning portrait of the company’s operations.
A preliminary report presented by the trustee in bankruptcy at the Toronto Office of the Superintendent of Bankruptcy Canada on November 17 criticises – in particular – Ritchies’ record keeping.
No financial statements were prepared by the company after June 2008 and its electronic database was not maintained, with the result that the company’s records do not include an accurate listing of the inventory or its owners.
According to the report, the money Ritchies collected from auction sales was not put in a separate trust account for consignors. “Instead all funds were commingled in the general accounts.” By late October, the company’s bank accounts were “either overdrawn or had minimal balances”.
The report states that the company has assets of just under $1.8m but liabilities of $8.53m. Of these, close to $8m is owed to “general consignors”.
By Roland Arkell