A major cosmetic chain known for its fat-freezing treatments, which was on the brink of collapse, has been given a lifeline to allow existing clinics to remain open.
Body Catalyst permanently closed 26 clinics last week after the company went into voluntary administration last month.
The fate of the 16 remaining clinics and 85 staff hung in the balance until this week.
Company director Samantha Barakat Light proposed a Deed of Company Arrangement (DoCA) that would enable the restructured group to continue operations and effectively end voluntary administration.
The proposal was accepted at a meeting on Tuesday by creditors, who are owed $8.5 million.
The move makes it possible to… clinics continue to operate and 85 employees remain employed.
Employees get 100 cents for every dollar owed, while unsecured creditors get 3.2 cents under the DoCA.
Body Catalyst’s 16 clinics will continue to operate following a creditors meeting held this week
Administrators Alan Walker and Glenn Livingstone of WLP Restructuring had recommended that creditors approve the DoCA as it had better results compared to placing the remaining clinics into liquidation.
“Since being appointed as administrators we have focused intensively on restructuring Body Catalyst to preserve jobs, maximize recovery for creditors and ensure the Group remains a going concern,” Mr Walker told in a statement on Tuesday Daily Mail Australia.
“While this process has led to the unfortunate but necessary closure of clinics and associated staff layoffs, today’s vote creates a viable path forward for the Group.”
Ms Barakat Light added: ‘The approval of the DoCA not only allows us to start a new chapter for the company, it is also a vote of confidence in the future of the restructured Group.’
“Throughout this challenging process, I have been humbled by the continued support of our incredible employees, suppliers and customers, and I am beyond grateful.
“We remain committed to our mission and delivering results for customers, and we are excited to continue our journey as industry leaders. We can now continue with what we are good at: shaping bodies and changing lives.’
All staff dismissed during the restructuring process will receive their full rights, with a refund to unsecured creditors.
According to the administrators, the beauty chain owes $5.3 million to unsecured creditors and another $3.2 million to unsecured creditors.
Founder Samantha Barakat Light (left) is hopeful that the clinics will remain open
It is understood that Body Catalyst may have been trading insolvent since June last year due to growing tax debts and lower sales.
Ms. Barakat Light, who stepped down as CEO of the troubled company last May, recently cited the challenging economic landscape for the company but remained committed to its long-term sustainability.
“Despite these challenges, we are determined to emerge stronger and more resilient,” she said in December.
‘As part of our commitment to a better future, we are reorganizing our operations to create a leaner and more efficient business model.
“This restructuring will allow us to refocus on delivering high-quality services to our customers in key locations, while navigating the changing economic environment.
“We appreciate the support of our loyal customers and partners during this transition period, and we look forward to serving you with renewed vigor and dedication in our refined and revitalized business model.”
Approximately 85 existing Body Catalyst employees were evicted by creditors
Founded in 2015, the cosmetics chain operates in NSW, Victoria and Queensland, as well as New Zealand.
The company describes itself on social media as a leader in non-surgical body and skin treatments, with more than 20,600 Instagram followers.
Treatments include fat freezing, cellulite reduction, non-surgical facelifts, Botox, skin rejuvenation, skin tightening, body contouring, pelvic floor strengthening, muscle definition and fat cavitation.
The struggling company remains active on social media with regular posts highlighting its services and customer testimonials.
Body Catalyst (clinic in photo), founded in 2015, bills itself as a leader in non-surgical body and skin treatments