Charges connected to the alleged corporate wrongdoing at the time 58 Bruck Textiles employees were made redundant in July 2014 have been dropped against two executives.

The charges, relating to the payment of employee entitlements, were discontinued against Philip James Bart and Ronald George Johnson, the former chair and chief financial officer of Bruck Textile Technologies Pty Ltd (Bruck Textile) respectively this month.

Both men had previously been committed to stand trial on one charge each of preventing the recovery of employee entitlements.

The Office of the Director of Public Prosecutions filed a Notice of Discontinuance on 29 August this year and announced that charges have been dropped at a Victorian County Court mention on 1 September.

“The decision to discontinue the proceedings follows the Victorian Court of Appeal’s case stated judgment on questions of law in relation to the interpretation of the offence legislation,” an Australian Securities and Investments Commission (ASIC) spokesperson said.

“Former Bruck Textile CEO Geoffrey Thomas Parker had also been committed to stand trial on one charge of preventing the recovery of employee entitlements contrary to sections 596AB and 1311 of the Corporations Act.”

On 3 April, 2024, in the Victorian County Court, Mr Parker pleaded guilty to the charge on indictment and was sentenced to two years and six months imprisonment, with immediate release.

In a statement Philip Bart said “the directors are pleased that commonsense has finally prevailed, with the charges being dropped”.

“It’s important to understand that we (the directors) saved the business, a business that has been operating in Wangaratta, Victoria for over 80 years, and saved around 120 jobs,” Mr Bart said.

“The business continues to operate successfully, and is effectively one of the last men standing in textiles production in Australia.

“The directors have suffered significant financial and reputational damage as a result of the long drawn out matter.

“We are pleased to see a press announcement from ASIC, highlighting the discontinuance of the matter, and the withdrawal of the charges.”

On 23 May, 2022, Mr Bart and Mr Johnson, the former chair and chief financial officer of Bruck Textile Technologies respectively, appeared in Wangaratta Magistrates’ Court charged with one count each of preventing the recovery of employee entitlements.

Mr Parker also previously appeared on the same charge on 21 March, 2022.

Following an ASIC investigation conducted under the Serious Financial Crime Taskforce (SFCT) into Bruck Textiles’ activities, it was alleged that Mr Bart, Mr Johnson and Mr Parker entered into a transaction on or about 10 July, 2014 to sell the assets of Bruck Textile to a related entity, Australian Textile Mills Pty Ltd.

After the sale, Bruck Textile was considered insolvent and placed into liquidation on 11 July, 2014, resulting in 58 employees losing their employment and access to entitlements, such as redundancy payments.

It was alleged that Mr Parker, Mr Bart and Mr Johnson entered into the transaction to sell the assets of Bruck Textile to prevent or significantly reduce the amount of redundancy entitlements given to employees, estimated at over $3.48 million, in an alleged contravention of section 596AB of the Corporations Act 2001.

Bruck Textile's former employees applied under the Commonwealth Fair Entitlements Guarantee scheme for payment of their entitlements after Bruck Textile’s liquidators found that the company did not have sufficient assets to pay them.

The charges followed an ASIC investigation conducted under the Serious Financial Crime Taskforce (SFCT) into the activities of Bruck Textile.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.