July news digest
01 August 2017
The following are summaries of media stories related to business turnaround and insolvency in Australia during July 2017.
AUSTRALIA
PROPERTY AND CONSTRUCTION
Insolvent builder owes 44 Ballarat creditors
26 July 2017
The Ballarat Courier reports that “an insolvent Ballarat builder has gone under owing $340,000 to creditors. CSM Homes went into liquidation on July 3, more than six months after the business ceased trading in January of this year, liquidator Leon Lee said. The insolvency notice issued by Australian Securities and Investments Commission comes after a bad six months in Ballarat’s construction industry with the collapse of Geelong-based builder Watersun Homes in March this year. This follows revelations another Ballarat builder has gone to ground owing tens of thousands to homeowners and tradespeople.”
Insolvency in the Australian Construction Industry
25 July 2017
Sourceable reports that “the construction industry is a large and dynamic field, accounting for 5.7 per cent of Australia’s GDP, according to the HIA Window into Housing. The industry, however, is also ranked second for insolvencies, according to March 2017 ASIC insolvency statistics, and represents 16.72 per cent of Australian business insolvencies. Causes of insolvencies are varied. A 2015 report by the Senate Economics References Committee noted that “Inadequate cash flow or high cash use, poor strategic management of the business and poor financial control, including a lack of record-keeping, accounted for the highest number of business failures.”
Embattled property developer dodges $17m bankruptcy with $180,000 deal
24 July 2017
The Sydney Morning Herald reports that “an embattled developer and fraudster avoided plummeting into bankruptcy after claiming he only had $200 in his bank account and couldn't repay the $17 million he owed to former friends and associates. Despite his cries of crippling financial stress, Lemuel Page, 48, is still spotted driving around the NSW Hunter region in a luxury Mercedes 4WD and Porsche convertible, both worth hundreds of thousands of dollars.”
Tasmanian property developer faces fraud charges over Gold Coast companies
22 July 2017
The Mercury reports that “a Hobart strip club operator has been charged with fraud offences totalling $2.32 million in an alleged Ponzi scam on the Gold Coast. Bradley Keith Silver, 28, of Hobart, was arrested by Australian Federal Police officers at Brisbane Airport on Thursday. The operator behind Hobart’s Men’s Galley and Launceston’s Show Girls faces seven counts of fraud and six counts of dishonestly using his position as a director. The charges come after an investigation by the Australian Securities and Investments Commission.”
Former rich-lister Gore seeking legal aid
21 July 2017
Nine News reports that “bankrupt former property developer Craig Gore is expected to apply for legal aid to fund his fight against fraud charges. Once on the BRW Rich List, Gore is now before Brisbane Magistrates Court over allegations he defrauded superannuation companies of almost $800,000. He was expected to apply to vary his bail at the court on Friday after he was in April banned from returning to his home in Stockholm, Sweden, where his wife Marina is from.”
16 July 2017
News.com.au reports that “eighty people have been living for seven years in a Sydney unit block labelled a death trap since its appallingly inadequate fire safety system was allegedly covered up by false fire safety reports. The 39-unit building in Killara, on Sydney’s north shore, is so dangerous NSW’s top firey has ordered the local council to repair it. The property development company that built the block, where apartments sold for more than $1 million, has claimed it has gone bust. Fire and Rescue NSW became aware of the disaster waiting to happen at the Pacific Hwy property when it was contacted on March 4 this year by a worried resident, who complained of appalling fire safety standards.”
Buyer still wanted for financially stricken Marina Hindmarsh Island which owes at least $2.2 million
13 July 2017
The Advertiser reports that “the family behind the embattled Marina Hindmarsh Island owe at least $2.2 million to creditors — the majority to the State Government — and are still holding out hope that someone will buy the property. A report filed by the marina’s owner, Tom Chapman, with ASIC reveals for the first time the scale of the debt that has triggered the potential sale of the family’s hard-earned development. The Advertiser revealed in March that the Chapmans — who battled for a decade to build a controversial bridge linking Goolwa with an expanded island marina — risked losing the business after the marina’s controlling company, Kebaro Pty Ltd, was placed into receivership.”
MINING
24 July 2017
The Courier Mail reports that “a colourful bean counter who used to work for notorious conman Peter Foster has ended up in a bit of hot water himself. Ipswich accountant Bob Adcock runs an outfit called Admorr Petroleum, which has just been hit with a wind-up application. Retruck Australia launched the legal action in Brisbane Supreme Court last week, alleging that it has been unable to collect almost $170,000 owing since last September. Owner John Campbell told City Beat yesterday that he had refurbished three diesel-hauling vehicles for Admorr and repeatedly been promised payment."
200 workers out as South32's Appin mine axes Delta
21 July 2017
Illawarra Mercury reports that “the entire Appin workforce of major contractor Delta has been stood down after mine owner South32 terminated the contract of the mine services company, which is in administration. CFMEU district vice-president Bob Timbs said about 200 contract workers had been removed from the mine after their jobs were terminated on Thursday. But he and South32 were hopeful most, if not all, of the workers would be re-employed at the mine, which is currently not operating after gas issues caused the regulator to order a shutdown.”
Nathan Tinkler fails to land mining consultancy gig
21 July 2017
The Daily Telegraph reports that “bankrupt former mining magnate Nathan Tinkler’s trip to New York for a job interview in February has backfired. The Saturday Telegraph can reveal the one-time billionaire remains unemployed and residing in Australia after an unsuccessful job application with a mining consultancy in Manhattan. But a lack of income has not stopped him from continuing to travel the globe, with Mr Tinkler recently flying to Hawaii for his son’s birthday.”
Australian Road Express and Rivet Mining placed in receivership
18 July 2017
Prime Mover magazine reports that “Australian Road Express and Rivet Mining Services – both part of the part of McAleese descendant, Rivet Group – have been placed into receivership. McGrathNicol told CRTNews that following a “request of the directors”, the company’s Rob Kirman, Rob Smith and Anthony Connelly were appointed as receivers and managers, with Andrew Cummins and John Carrello of BRI Ferrier serving as Voluntary Administrators.”
These are tough days for North Queensland explorer Ralph De Lacey
14 July 2017
The Courier Mail reports that “these are tough days for North Queensland explorer Ralph De Lacey, co-founder and boss of Consolidated Tin Mines Limited. His company, which nearly collapsed last year owing more than $50 million and is still suspended from the ASX, will be back in Cairns Magistrates Court on August 1. The Department of Environment and Heritage Protection alleges the firm illegally released two megalitres of contaminated wastewater from the Baal Gammon copper mine in 2015.”
Arrium sale: Creditors formally approve sale to London-based company Liberty House
13 July 2017
ABC News reports that “the sale of Whyalla's steelworks to a British company has been formally approved by its creditors, leaving the path free for foreign investment on South Australian soil. Liberty House, which is part of London-based GFG Alliance, was earlier this month announced the winning bidder for Arrium. Arrium was placed into voluntary administration by its directors in April 2016 and its sale subject to approval by a committee of creditors, which today gave the green light to Liberty House's bid.”
13 July 2017
Australia’s Mining Monthly reports that “Baralaba Coal Company, which rose from the ashes of Cockatoo Coal, has gone into voluntary administration. The company announced yesterday that an administrator had been appointed. An undersubscribed entitlement offer sparked the decision to call in the administrators. Baralaba decided to withdraw an entitlement offer that had hoped to raise $78.3 million but only raised about $39.8 million.”
Ratepayers forced to pay State Government bill
13 July 2017
Caboolture News reports that “CMI Industrial leased a parcel of land from the Queensland Government, racked up a bill, went into liquidation and then handed the land back. CMI took over a 25-year-old mining lease (ML 50067) in 2009 from Southern Cross Machinery, which operated the old Woorim sand mine on state-owned land. The Department of Agriculture and Fisheries is the trustee of the land which is held as a quarry reserve, and the Department of Natural Resources and Mines is the occupant.”
Liquidation possible for CQ coal miner in $4bn debt, owes employees $22m
12 July 2017
The Observer reports that “liquidation is possible for a collapsed central Queensland coal miner, a creditors' report has revealed. Winding up Caledon Coal was recommended by the administrator at the last creditors' meeting. The Cook Colliery mine owner and Wiggins Island Coal Export Terminal part-owner was placed into administration earlier this year with a debt of about $4billion. It owes its employees $22million and WICET more than $24million, according to the report.”
BHP Agitator Challenges Buffett Deal
11 July 2017
ShareCafe reports that “a rare example of a challenge to a big deal from Warren Buffett and his Berkshire Hathaway group has emerged. As suggested on Monday, Elliott Advisers, the US based hedge and vulture fund is trying to force Berkshire Hathaway to pay more for the 80% of Texas power distributor, Oncor Warren Buffett’s company agreed to buy on Friday. Berkshire offered to pay $US9 billion in cash and take on the same amount of debt for the controlling stake in Oncor, which is part of the Energy Futures Holdings (EFH), a bankrupt Texas-based power generation and distribution group that was the biggest private equity buyout in 200. It collapsed several years later under the weight of its huge debts.”
Liquidators target Clive Palmer’s corporate empire
6 July 2017
The Australian reports that “taxpayer-funded liquidators are suing to claw back $67m from Clive Palmer’s Sunshine Coast golf course and dinosaur park, $16m from his flagship company Mineralogy, and $9.2m from his Bora Bora resort.
In the Queensland Supreme Court lawsuit, lodged on Friday, special purpose liquidators PPB Advisory have launched an assault on the former federal MP’s corporate empire, seeking hundreds of millions of dollars for creditors of Mr Palmer’s collapsed Queensland Nickel. Townsville refinery company Queensland Nickel crashed into liquidation under $300m in debts in April last year, after 800 workers lost their jobs.”
Gladstone-based quarry company collapses over tax debt
5 July 2017
The Observer reports that “another business has bitten the dust in the Gladstone region. Although the company is in liquidation, the quarry is still running. The liquidator said Yarwun Quarries Queensland was wound up via an application filed in the Federal Court of Australia by the Deputy Commissioner of Taxation because of its failure to pay its Running Balance Account Deficit Debt to the Australian Tax Office.”
'Bright future': Britain's GFG Alliance to buy Arrium steelworks, beating Korean offer
5 July 2017
The Sydney Morning Herald reports that “Australian steelmaker and mining group Arrium is set to be sold to the London-based GFG Alliance, ending more than a year of uncertainty for the struggling company. In a move expected to secure the jobs of more than 5500 workers, the administrator announced on Wednesday it had signed a binding agreement to sell Arrium to GFG Alliance, which is owned by the Gupta family from Britain. A price has not yet been disclosed.”
RETAIL
Dick Smith class action gets green light
25 July 2017
ARN Net reports that “a class action against Dick Smith Holdings (DSHE) by hundreds of the failed tech retailer’s shareholders has been given the go-ahead by the Supreme Court of NSW. On 24 July, the Supreme Court granted leave to Bannister Law, which is launching the class action on behalf of shareholders in the company, to file proceedings against DSHE Holdings Ltd (Receivers and Managers Appointed) in liquidation. The move comes just over a month after Bannister Law revealed it had commenced legal proceedings against DSHE, the liquidated entity remaining following the retailer’s collapse early last year, which is now under the control of receivers, Ferrier Hodgson.”
Rhodes & Beckett and Herringbone rescued by HK-backed management buyout
25 July 2017
The Australian reports that “collapsed up-market fashion chains Rhodes & Beckett and Herringbone has been sold as part of a management buyout backed by a Hong Kong-based private equity firm called AO Capital, in the first bit of good news for the struggling retail sector that has seen a spate of retailer failures in the fashion, clothing, footwear and apparel sector. The administrators to the twin failed menswear stores has announced this afternoon that both brands will survive, as will jobs, with the buyer of the group being Black Bear Holdings, headed by current brand director Michel Boutin and supported by private equity firm AO Capital.”
SumoSalad wins lower rents from Westfield
18 July 2017
The Australian Financial Review reports that “SumoSalad's groundbreaking use of the insolvency laws to force Westfield shopping centres to negotiate lower rents for its fast food franchisees has proved successful. The two parties are on the brink of agreeing a mutually favourable commercial outcome, with the final details to be sorted out by early next week. The deal will be closely watched by the thousands of retailers operating in large shopping centres because it will show that it is possible to tip the balance of power from landlords back to tenants. SumoSalad's co-founder Luke Baylis said on Tuesday he was negotiating better rental terms at Westfield centres which would put his franchise owners on sounder financial footings.”
Move fails to reinvigorate hobby business
16 July 2017
News Mail reports that “a Bundaberg retailer has been forced to close after a move to a new prime CBD location failed to boost flagging sales. J & A Davis Pty Ltd, trading as Bundy Hobbies and Toys, went into voluntary administration last month after receiving a statutory demand from the company's major supplier, which it was unable to pay. John and Joy Davis are listed as directors of the company, which has been operating since 2012 at Maryborough St before its recent move. The hobby shop catered for a wide range of interests, from model trains to remote control cars, planes, boats, helicopters, plastic kits, slot cars, rockets, kites and hobby accessories.”
Gold medal-winning $6 Geelong wine goes gangbusters at Coles
14 July 2017
The NT News reports that “cheap wine and incredible sales growth — a Moorabool-produced $6 bottle of plonk has sold out within 24 hours of winning a best red prize. Liquor stores throughout the Geelong region ran dry of St Andrews Cabernet Sauvignon 2016 after the private label won a “double gold” at the Melbourne International Wine Competition (MIWC) this week. The red, produced by Idyll Wines in Moorabool, went into receivership less than two years ago and is now controlled by Costa Asset Management. The MIWC judging panel was unanimous in rating the St Andrews Cabernet Sauvignon 2016 as worthy of a gold medal — a rare consensus on quality that is marked by the award of “double gold” status.”
Mias bakery in administration as owner claims low price of bread partly to blame
13 July 2017
ABC Local News reports that “West Australian bakery Mias has been placed into voluntary administration. The family-owned bakery, which has been trading since 1950, employs about 150 staff. Mias chief executive Conrad Mias said the low bread price was one of a number of factors leading to the company's financial problems. He said the introduction of Aldi into the market had led to less demand from other major supermarket chains. "Obviously with Aldi moving into WA over a year ago, our market's been shrinking since their introduction," he said.”
Myer 'erases' Topshop concessions from stores as negotiations continue
13 July 2017
The Sydney Morning Herald reports that “Myer has closed its 17 Topshop concessions as negotiations continue to save the Australian arm of the UK fast-fashion business from total collapse. Visitors to Myer stores hoping to pick up a Topshop garment this week would have likely been met with scant signage and zero trace of the brand on the shop floor.”
Jeans brand True Religion files for bankruptcy protection
6 July 2017
The Sydney Morning Herald reports that ”upscale jeans maker True Religion Apparel Inc. has filed for bankruptcy reorganisation, the Los Angeles apparel firm said on Wednesday. But True Religion said that in tandem with filing under US bankruptcy law, its owner, TowerBrook Capital Partners, a private equity firm, reached a proposed deal with lenders to slash True Religion's debt by about three-quarters as it continues operating.”
Bakers Delight at Corio goes into liquidation
3 July 2017
The Geelong Advertiser reports that “Bakers Delight in the Corio shopping centre has told staff it has would be closing its doors for good. A liquidation notice was filed for the business on the Australian Securities and Investments Commission website on Thursday, and social media reports revealed staff were told the sad news on the same day.”
LOGISTICS
Receivers begin ‘wind down’ of Australian Road Express
27 July 2017
ATN reports that “all employees are to be made redundant as part of the process receivers begin ‘wind down’ of Australian Road Express. The move only affects ARX Group entities. Receivers were appointed last week after the collapse of Australian Road Express Pty Ltd and its subsidiaries including Jolly’s Transport Services and Jetstyle Express – collectively referred to as the ARX Group. Having received "no going concern offers" since the start of the business appraisal, the administrators began the "wind down process" of the business late last week.”
180 jobs lost in collapse of Mark Rowsthorn's salvaged McAleese business
26 July 2017
The Sydney Morning Herald reports that “this time it was meant to be different. McAleese, the logistics group, collapsed last August - less than three years after investors paid $166 million to list the business led by Melbourne businessman, Mark Rowsthorn. It was seen as a personal victory when he managed to salvage most of the group - the viable part of the business - from administration in February this year.”
Flynn Transport in voluntary liquidation
5 July 2017
Trailer Magazine reports “NSW company, Flynn Transport, has gone into voluntary liquidation on Monday, with all assets to be sold in efforts to settle debts to creditors. According to Worrells Solvency & Forensic Accountants, which is handling the process, Flynn Transport is made up of three separate entities. The first is Flynn Transport Pty Ltd, which the company owner reportedly believes is solvent, owns the assets, including vehicles and buildings. Meanwhile, Flynn Transport (NSW) Pty Ltd, which was responsible for running the business, has been placed into a creditors voluntary liquidation due to its insolvency.”
Claims fraud brought trucking company to its knees
3 July 2017
The Northern Star reports that “NSW Police have confirmed they are investigating allegations of fraud at Flynn Transport. The company went into voluntary liquidation yesterday with director Tony Flynn partly blaming the company's demise on the actions of a former employee. Today it was confirmed that detectives from Richmond Local Area Command have been investigating the fraud allegation for some time. Forensic accountants have been contracted to conduct analysis of the company's books in a process which could take several months.”
TOURISM and HOSPITALITY
24 July 2017
The West Australian reports that “with a clutch of appointments into the sector in recent months, insolvency firm McGrathNicol is cautioning about growing stress in WA’s hospitality industry. The combination of WA’s softer post-resources boom economy, cautious consumers and stay-at-home drinkers tapping the local bottle shop for cheaper liquor means some pubs, bars and nightclubs are finding it tougher to turn a profit.”
Off The Record: Royal Croquet Club goes through hoops
22 July 2017
The Advertiser reports that “the future of the embattled Royal Croquet Club is in doubt but what is certain is the team behind the festival favourite have racked up a bar tab of head-thumping proportions. Off the Record can reveal the debt left behind by the RCC directors and darlings of Adelaide’s social scene Tom Skipper and Stuart Duckworth – and it’s enough to make you cry into your beer, wine and cider.”
Fun starts for Grant Fenn as Spotless takeover marathon ends
19 July 2017
The Australian reports that “four months after formally unveiling a “get out of jail free” $1.2 billion bid for Spotless, Downer EDI’s Grant Fenn finally took board control yesterday and won support for his bid. But it still remains to be seen whether he can mop up the remaining 33 per cent of the target and achieve the full benefits of the offer. In March, when the bid was launched, the local institutional response was one of relief that Spotless was going to be taken out of its hands, and disbelief that Fenn would offer as much as $1.15 for the contract services company. Since refloating in 2014, Spotless has been friendless among local fund managers but enjoyed strong overseas support and a loyal retail base, in part through Evans & Partners, which is run by David Evans, the son of one of the founders, the late Ron Evans.”
State RSL could lose charitable status over "non-compliances"
17 July 2017
IN Daily reports that “the besieged South Australian branch of the Returned and Services League faces the prospect of having its charitable status revoked, after an investigation by the national charities regulator found “several” governance breaches. The state’s RSL went into voluntary administration in April amid a cash-flow crisis – details of which were first revealed by InDaily – and an independent audit by the Australian Charities and Not-for-profits Commission, which oversees all charities and not-for-profit organisations in the country.”
Matisse goes into administration amid Scarborough works
11 July 2017
The West Australian reports that “Matisse, the beach club which tried to add some glamour to Scarborough, has gone into voluntary administration. The beachfront venue’s sole director, Sean Reid, called in administrators on Friday. They declined to comment yesterday but it is believed the interruption to the business caused by the Metropolitan Redevelopment Authority’s $100 million development of the Scarborough beachfront was a factor in Matisse’s demise.”
COMMUNICATIONS
Liquidators investigate EON Sports Radio
24 July 2017
Mumbrella reports that “EON Sports Radio is being investigated on whether it continued to trade while insolvent by its liquidation administrators, following the station’s abrupt axing last year. According to the AFR, the digital radio station – which was axed abruptly in May – “may have been insolvent since April 2017”, after funds from the previous two months had been exhausted.”
Network Bosses Want End To Kids’ Content Quota They Claim No One Watches
21 July 2017
B&T News reports that “the bosses of Seven, Nine and Ten have again argued their case for less government regulation in their beleaguered networks, this time calling for the children’s content quota to be culled. Seven’s Tim Worner, Nine’s Hugh Marks and Ten’s Paul Anderson all appeared at a parliamentary inquiry into the sustainability of the film and television industry in Sydney yesterday and all were singing from the same hymn sheet. Each of the networks are required to make 130 hours of original kid’s content each year, or about 2.5 hours a week. Each network is also required to make 32 hours of local drama per year.”
Amber Harrison may be left bankrupt, but the boys' club is always all right in the end
18 July 2017
The Sydney Morning Herald reports that “Seven West Media's campaign against Amber Harrison is drawing to a close, with the Supreme Court this week ordering the former executive assistant to pay the media conglomerate's legal costs.
Harrison's affair with Seven West Media boss, Tim Worner, led first to her dismissal and then to a costly legal battle after she broke a confidentiality agreement brokered with the media company.”
Lachlan Murdoch runs the ruler over collapsed EON Sports Radio
16 July 2017
The Financial Review reports that “Lachlan Murdoch is believed to have run the numbers on collapsed digital radio network EON Sports Radio. Sources said Mr Murdoch, likely via representatives, looked at buying the digital sports radio network as a complimentary business to Fox Sports, which is owned by News Corporation, where he is co-chair. However, they stressed a deal may not materialise. EON Sports Radio went into voluntary administration in June after it ran out of money to stay on air.”
Channel Nine snaps up ARIA Awards 2017 from Network Ten despite falling viewership
14 July 2017
The Sydney Morning Herald reports that “Channel Nine has snapped up the television broadcast of the ARIA Awards despite poor ratings and slim chances of making a profit. On Thursday, Nine announced it will broadcast the music industry's night of nights for the first time in four years. The awards have been broadcast on Channel Ten since 2002, except in 2009 when they aired on Nine and between 2011 and 2013 when they were relegated to the television wilderness on sister channel GO!.”
NBN, Vodafone contractor Daly International owing millions spared from liquidations
12 July 2017
CRN Net reports that “former NBN contractor Daly International has been spared liquidation after its director Peter Daly agreed to pay the troubled company’s creditors the proceeds of sales of company assets and guarantee a cash payment for an additional $900,000. The two payments are the key financial terms of a company deed that Daly successfully put to creditors last Friday. Under the terms of the deed, Daly International will be released from all claims by creditors apart from those by excluded creditors, and Daly will resume control and management of the company — albeit without powers to act as a company officer.”
ADMA looks to inject new life into AIMIA with rebrand
7 July 2017
CMO reports that “the Australian Interactive Media Industry Association (AIMIA) has been rebranded to the Digital + Technology Collective nearly 18 months after being brought under the wing of ADMA and 25 years after its foundation. The new-look association will now be headquartered in Melbourne, and has been realigned around five key pillars outlined by PricewaterhouseCoopers as being the main ingredients of innovation. The rebranding is a sign of ADMA’s efforts to inject new life into AIMIA, which it acquired from administrators back in February 2016, when the association fell into voluntary administration due to commercial woes.”
Liquidators chase SoleNet, Sure Telecom for $2 million debt
6 July 2017
CRN reports that “a group of companies run by the owner of SoleNet and Sure Telecom have been wound up as liquidators chase up a potential $2 million debt owed to creditors. The telecommunications companies owned by James Harrison were placed in liquidation in November 2014. These companies include Telco Service Holdings and Sure Telecom. Liquidators from Deloitte conducted an investigation into the companies, which found that the company was insolvent before the transactions. At the time, the business was valued at $820,000. The liquidators alleged that unlawful phoenixing activity took place when customers were traded between companies from 2013 and 2014 to avoid regulatory sanctions and debts.”
EDUCATION
Malek Fahd Islamic School on brink of closure but board hopes court case can win a reprieve
3 July 2017
The Daily Telegraph reports that “in a desperate attempt to remain open, Malek Fahd Islamic School has lodged a further court appeal, seeking the release of almost $5 million of Federal Government funding which has been withheld. The Federal Court appeal will be heard tomorrow and requests that the Government provide four months’ worth of funding — about $4.8 million. It wants the money so it can continue to operate while awaiting the outcome of a court hearing appealing an Administrative Appeals Tribunal decision upholding the Government’s decision to withhold $19 million of annual funding.”
INVESTMENT
Dragoman's John Fast's parting shot
24 July 2017
The Australian Financial Review reports that “John Fast, one of the founding partners of Clayton's lobbying outfit Dragoman Global, has delivered a scathing parting shot to his erstwhile colleague Tom Harley, explaining he decided to put the company into liquidation following a "a total breakdown of the relationship" between the two. In an email to clients sent on Monday afternoon, Fast made no secret of the massive falling out between the two former BHP colleagues, which has been widely covered in this column. Fast said he'd decided to liquidate the "viable and profitable" firm due to a "total breakdown in the relationship between me and my co joint managing director, Tom Harley", with whom he could "not continue in a common enterprise".
19 July 2017
Business News WA reports that “PSC Insurance Group has bought National Franchise Insurance Brokers and two related entities in a deal worth up to $1.2 million, two months after the Subiaco-based firm was placed into administration. Melbourne-based PSC told the ASX today that it has agreed to make an initial payment of $200,000 to NFIB with deferred quarterly payments over the coming year based on revenue received.”
ASIC to take former Banksia Boss to Federal Court in August
13 July 2017
The Border Mail reports that “the founder of the failed Banksia finance company will face the Federal Court in August after the Australian Securities and Investments Commission commenced civil penalty proceedings last month. Former Banksia managing director Patrick John Godfrey will front court in Melbourne after ASIC alleged that Banksia’s financial reports for financial years ending Jun 30 2011 and June 30 2012 and the half-year financial report ending on December 31 2011 did not comply with relevant accounting standards. ASIC also alleged Mr Godfrey did not have, or failed to obtain, the proper understanding of the relevant accounting standard.“
Gerry Harvey only winner as Nathan Tinkler's thoroughbred empire is sold
14 July 2017
The Sydney Morning Herald reports that “the last patch of Nathan Tinkler's thoroughbred racing empire has now been sold, but it is not clear whether there will be any beneficiaries other than retail billionaire Gerry Harvey. The liquidators of Patinack Farm reported on Thursday that the last three properties, including the stud farm Sandy Hollow in Muswellbrook, and the aptly named Broke – near Cessnock – have been sold for a total return of $15 million.”
Warren Buffett’s Berkshire Hathaway spends $23bn on power play
8 July 2017
The Australian reports that “Warren Buffett’s Berkshire Hathaway struck a deal to buy one of the US’s biggest power-transmission companies, cementing electricity as one of the conglomerate’s largest businesses. Berkshire said it will buy bankrupt Energy Future Holdings for $US9 billion ($12bn) in cash, giving Mr Buffett its Texas-based Oncor. Including debt, the deal has an enterprise value of about $US18bn. The acquisition is one of Berkshire’s largest ever and its biggest since the $US32bn purchase of Precision Castparts in 2016.”
Sports scientist Stephen Dank faces bankruptcy bid by bank
6 July 2017
The Australian reports that “sports scientist Stephen Dank could be bankrupt by the middle of next month after the Bendigo Bank launched legal action over an unpaid debt of almost $100,000 related to a failed forestry scheme.
Mr Dank was in November banned for life from being involved in sport over his involvement in the Essendon doping saga after failing to turn up to an AFL appeal hearing. He was key to a program of injecting supplements at Essendon that threw the club into turmoil, sparked years of litigation and cost 34 players a two-year ban. Mr Dank owes the Bendigo $98,500 after borrowing money to invest in a forestry scheme run by timber company Great Southern in 2006. Great Southern collapsed in 2009 but this did not cancel the debt.”
LEGAL
Widow battles for share of family fortune
26 July 2017
The West Australian reports that “a wealthy WA family is enmeshed in a legal battle over their fortune, with lawyer and socialite Mae Cardaci suing for a cut of the business empire left by her late husband Marc Cardaci. Ms Cardaci’s legal team went to the Supreme Court yesterday claiming she had been forced to sell her Scarborough home in the wake of her brother-in-law Phil Cardaci declaring her late husband’s estate bankrupt. Before he died of cancer in November 2015, Marc Cardaci had steered the growth of the family’s CFC Group into a $1 billion business with Australia-wide interests in property, storage, transport, equipment supply and mining services.”
ASIC, ATO use 'disruption' tactics to stop phoenixes rising from corporate ashes
23 July 2017
The Australian Financial Review reports that “rogue advisers who seek out struggling companies and help 'phoenix' them out of tax and other financial obligations are being targeted in a multi-agency crackdown on the $3 billion lost every year from company rebirthing. The Australian Taxation Office and ASIC are leading the effort to put rogue 'pre-insolvency advisers' out of business by disrupting their attempts to recruit clients to phoenix. The regulators' new tactics, called an 'in-flight phoenix', rely on analysis of intelligence generated by a multi-agency tax, wages and work conditions' investigative taskforce and industry whistleblowers.”
Insolvencies jump as rising number of Australians go for broke
22 July 2017
The Herald Sun reports that “more than 30,000 Australians went broke in the past year as the number of personal insolvencies jumped 2.1 per cent, led by a surge in new-style debt agreements. The Australian Financial Security Authority said bankruptcies were becoming a less popular form of insolvency — down 5 per cent during the year to June. The number of debt agreements increased almost 12 per cent over the same period. Bankruptcies, however, still accounted for 54 per cent of total personal insolvencies, while 45 per cent were debt agreements. “Debt agreements in 2016-17 were the highest level on record in all states and territories, except Tasmania,” the AFSA said.”
Growing list of long-standing Queensland businesses that have been forced to close
20 July 2017
The Courier Mail reports that “the demise of iconic local fishing equipment brand Alvey Reels after almost 100 years of servicing Australian anglers is just the next in a long line of major Queensland retailers to bite the dust in the digital age. In the past decade, several well-known local brands and shops have been forced to close their doors or go into liquidation. Whether it’s simply because of tough economic times or that consumers are spoilt for choice on the web is really neither here nor there – it’s always disappointing to see a local Queensland brand or long-time retailer go under.”
Cindy Prior, staffer in QUT racial smear lawsuit, has one week to avoid bankruptcy
19 July 2017
The Courier Mail reports that “a university staffer who ran a doomed racial smear lawsuit against three Brisbane students has one more week to avoid bankruptcy. Lawyers for Cindy Prior were in the Federal Circuit in Brisbane on Wednesday morning, where they were successful in their bid to stall the move to bankrupt her over $10,780 in court costs Prior owes former students Jackson Powell and Callum Thwaites. Prior sued the students for $250,000 in damages over Facebook posts they made, claiming she was unable to continue working face-to-face with white people.”
ASIC: Korda’s Ten role raises conflict of interest issues
18 July 2017
The Australian reports that “the corporate regulator says that almost $1 million of work done by insolvency firm KordaMentha before it was appointed administrator of stricken media group Ten raises concerns of a perception of conflict of interest. Leon Zwier, representing KordaMentha partner Mark Korda, who is leading the administration, yesterday told the Federal Court that both the Australian Securities & Investments Commission and insolvency industry body the Australian Restructuring Insolvency and Turnaround Association “have concerns about an apprehended lack of independence” relating to the payments. Mr Zwier told the court neither body contended “there will be an actual conflict of interest”.”
Engineering firm Ozcon may have been 'trading insolvent'
14 July 2017
Chinchilla News reports that “liquidators believe Ozcon Industries could have been trading while insolvent for at least 18 months before the Dalby company's collapse in January this year. The Dalby Herald has obtained a copy of a creditors report compiled by liquidators DuncanPowell, outlining the circumstances around the company's demise. The report said Ozcon Industries went bust owing more than $9.6 million, including $1.8 million to former employees. That figure includes $284,206 worth of unpaid superannuation, which will be covered by the Australian Taxation Office.”
Phoenix tactics: Insolvency firm Jirsch Sutherland warns of dodgy business activity in Geelong
14 July 2017
The Herald Sun reports that “insolvency experts have called on business watchdogs to better regulate operators amid a rise in illegal “phoenix” tactics, with at least three companies subject to the activity in Geelong over the past 12 months. Phoenix schemes involve failing companies being stripped of their assets, which are then placed into a new company so the former business doesn’t have enough money available for creditors. University of Melbourne Phoenix Research Team leader Helen Anderson said the tactic meant “there’s little money available for the liquidators to investigate whether there’s been any improper action”. The name comes from the fiery bird of Ancient Greek mythology, which was said to die in a burst of flames and be reborn from the ashes.”
Cash king for tax-dodging colleagues, disgraced lawyer tells court
14 July 2017
The Australian reports that “a month after being sacked from his law firm, high-profile lawyer Tim Meehan walked into the Crime and Corruption Commission and pulled the pin on a grenade that has blown up within Brisbane’s legal fraternity. The Supreme Court of Queensland heard yesterday that Meehan, 41, told investigators about how he and two others at his law firm were getting clients to pay in cash, to avoid tax and bankruptcy obligations for two of them.”
Slater and Gordon settles class action against itself
11 July 2017
The Sydney Morning Herald reports that “shareholders in Slater and Gordon have reached a $36.5 million settlement with the beleaguered law firm, a move that will pave the way for the group's restructure. However, it is unclear whether this is the end of the litigation process, with the firm leading one of the class actions Maurice Blackburn previously saying it was considering suing against Slater and Gordon's advisers.”
TECHNOLOGY
Salesforce burned in $150m Careers Australia collapse
17 July 2017
CRN Net reports that “enterprise cloud giant Salesforce.com has been caught in the collapse of private training provider Careers Australia Group and potentially more technology suppliers, big and small, might be wandering in the debris field.
Careers Australia entered voluntary administration in May shortly after it was stripped of accreditation for federal funding support. Administrator PPB has so far uncovered total debts of over $150 million. Salesforce.com was one of Careers Australia's top three unsecured creditors with outstanding invoices totalling $440,000, according to voluntary administrator PPB’s latest creditor’s report. Salesforce declined to comment on the situation citing company policy preventing it from discussing individual customers and ongoing legal matters.”
13 July 2017
CRN Net reports that “Brisbane IT solution provider Tech Project has pulled itself out of administration after creditors approved the director's deed of company arrangement (DOCA). Creditors have accepted an arrangement where the directors will pay back $375,000, which works out to be 11-15 cents in the dollar, according to a report to creditors. Tech Project's claimed debts amounted to $2.8 million, including $1 million owed to the Australian Taxation Office. The company was placed in voluntary administration in May citing cash flow problems.”
App development company Buzinga collapses into liquidation after expanding
11 July 2017
SmartCompany reports that “mobile application and software developer Buzinga has entered liquidation, with some clients allegedly left with incomplete projects. It’s understood that some businesses working with Buzinga to develop software have been “left out in the cold” midway through projects, with no indication if they will be resumed. Buzinga Pty Ltd entered liquidation on July 3, with a notice filed to ASIC detailing it was resolved at a “general meeting of members of the company”.”
Australian Bitcoin figure’s supercomputing company enters liquidation
7 July 2017
ARN Net reports that “a supercomputing research and development company once led by controversial Australian Bitcoin figure, Craig Wright, has been placed into liquidation. Cloudcroft Pty. Ltd., which had been branded as a specialist in the development and research of supercomputers and hyper density storage systems, was part of the DeMorgan group of companies – of which Craig Wright was founder and CEO.”
7 July 2017
Channel News reports that “following several years of legal skirmishes with Fitbit and several high-profile departures from the company, Jawbone is reported to have entered liquidation proceedings. The news comes through an article at The Information, which says that “the company has begun liquidation proceedings, after years of financial pressures, according to a person close to Jawbone.” Insolvency proceedings for the company are said to have begun from June 19th.”
PRIMARY INDUSTRY
16 July 2017
The Port Lincoln Times reports that “Cummins Milling Company, the flour producing business located at the Cummins Mill, went into liquidation last week following a number of weeks without trading. In late 2014 the flour business was a South Australian Food Industry consumer award finalist with the Sauturaga Family Trust taking ownership in 2015, saving it from potential closure. However, on July 12, the Federal Court of Australia ordered the winding up of Sinuma Pty Ltd as trustee of the Sauturaga Family Trust trading as Cummins Milling Company. Cummins Mill owner Bill Butterfield said the community could be reassured the closure of the flour business was separate to the other mill operations.”
Bellamy’s Organic’s factory purchase under scrutiny
12 July 2017
The Weekly Times reports that “Bellamy’s Organic’s purchase of a Melbourne dairy processing factory will come under the scrutiny of the administrator of the company that sold the plant. The vendor, Camperdown Dairy International, was placed in administration last Wednesday, two days after it sold its factory in Braeside to Bellamy’s Organic for $28.5 million. The administrator told The Weekly Times that the sale of the plant to Bellamy’s Organic was “something we will look at” to ensure fair value was achieved for the creditors of Camperdown Dairy International. “It appears on face value there has been valuable consideration paid.””
ENTERTAINMENT
Taipans chief executive Mark Beecroft has been taking care of business
22 July 2017
The Cairns Post reports that “on February 14, 2009, the struggling Cairns Taipans were beaten on the buzzer by eventual NBL champions South Dragons in front of 4100 fans at the Convention Centre. Despite the two-point defeat, it was viewed as a watershed moment for the Cairns franchise, which only months before had entered voluntary administration. The Snakes had been thumped by the New Zealand Breakers two days earlier. But, somewhat ironically, it was after this inspired performance against the Dragons that then Taipans head coach Mark Beecroft knew his true calling lay in taking his beloved club forward in an administrative role.”
Frankston Dolphins Football Club cracks 1100 members as it fights to rejoin VFL
13 July 2017
Leader Community News reports that “Frankston Dolphins Football Club has cracked the 1,100 member mark as it goes all out in its bid to rejoin the VFL. Frankston Dolphins in action against the Box Hill Hawks before they were booted from the VFL last year. Picture: Yuri Kouzmin Board member Peter Geddes said public support for the club’s “Bring Back The Dolphins’’ campaign was exceptional, particularly as it had only had 186 members the previous year. Mr Geddes told the Leader he was confident the club could be resurrected as key officials made a final submission to AFL Victoria on July 24 to regain a VFL licence.”
Barmy Army faces bankruptcy if Ashes cancelled, co-founder Dave Peacock says
10 July 2017
The Sydney Morning Herald reports that “one of the co-founders of England's Barmy Army has pleaded for the two sides in Australia's cricket war to resolve their corrosive pay dispute amid fears that the famous supporters' group could be bankrupted if the Ashes Test series is cancelled. "We could go bust if this isn't sorted out," Dave Peacock said.”
NOT FOR PROFIT
RSL SA creditors back sale of assets to pay off debt and avoid liquidation
28 July 2017
ABC News reports that “the RSL's South Australian branch has been spared from liquidation after a majority of creditors voted to sell-off assets, a pathway at odds with the wishes of the national board. The Returned and Services League SA went into voluntary administration in April. A meeting in Adelaide today saw creditors back a sale of assets to pay off debt, but national board representatives at the meeting voted against it. RSL-SA president Bronson Horan said the national board's view came as a shock.”
Liquidation won’t tear South Head apart
27 July 2017
The Australian Jewish News reports that “South Head Synagogue officially went into liquidation last Friday and all employees have lost their jobs, but members of the congregation feel they still have a future. Over the past month, a large section of the community has been praying at Moriah College’s Dover Road campus, known as Hamakom. Neill Miller, who is due to mark his 30th anniversary as a member of the shule next month, said Hamakom is vibrant, energetic and a sign that South Head will survive.”
Glen Ella kids' charity 'misappropriated $20 million', says NSW government
22 July 2017
The Sydney Morning Herald reports that “the NSW government has accused a children's care charity run by former Wallaby Glen Ella of misappropriating $20 million. The money was paid in subcontracts to companies linked to criminals.
Guardian Youth Care received millions of dollars in public money to provide full-time care for children from dysfunctional families in Sydney before it slid into administration.”
GOVERNMENT
Will Pauline Hanson’s Sister Replace Senator Malcolm Roberts if he is Disqualified?
31 July 2017
ABC News reports that “with it looking increasingly likely that One Nation’s Malcolm Roberts could have his qualifications to sit in the Senate referred to the High Court, the question of who would replace him if disqualified has attracted attention. Senator Roberts’ problem is that he overlooked the fact he had British citizenship. Shortly before the election he tried to renounce that citizenship. The British government did not formally act on that request until December 2016, after he was elected to the Senate.”
Commonwealth Bank and small business advocate Kate Carnell go to war
20 July 2017
The Australian Financial Review reports that “the Commonwealth Bank of Australia has launched a blistering attack on Kate Carnell, the Coalition government's new small business ombudsman, accusing her of ignoring facts, breaching its confidentiality and denying it procedural fairness. In a letter sent by the bank's top lawyer, Anna Lenahan, last Friday, Australia's largest bank savaged Ms Carnell over her appearance on a 60 Minutes program that accused the bank of driving a Queensland construction company into liquidation.”
Millions rorted from government R&D scheme
3 July 2017
The Brisbane Times reports that “millions of dollars have been rorted from a federal government scheme introduced to encourage Australian companies to invest in research and development, including claims from bankrupts, a property spruiker and a disgraced businessman. The Research and Development (R&D) Tax Incentive program is the government's largest industry innovation package, providing about $3 billion in tax offsets to businesses each year. But serious concerns have been raised about compliance and enforcement.“
Mayor told Rocky 'would be bankrupt in two years'
2 July 2017
The Morning Bulletin reports that “what a difference a few short years have made. Three years ago, Rockhampton Regional Council was told that we would be bankrupt in two years. For those who weren't here at the time, when Livingstone Shire de-amalgamated and went back to their original status, the remaining Council was still an amalgamation.”
How the National Debt Helpline is stopping bullies and giving hope
2 July 2017
The Sydney Morning Herald reports that “as a journalist, I've had my share of vicarious experience of the shadowy side of life: sign up for a courts round covering criminal cases and you soon realise how lucky you are. Not that you need this exposure to be aware of how many people are doing it hard: just read the papers, watch the news, or see the people with their cardboard signs sitting despondently outside railway stations. But if I ever needed a reminder, spending time on the National Debt Helpline forcefully brought home that fact.”
EUROPE
GOVERNMENT
Ex-business partner demands massive payment from Becker
5 July 2017
7 News reports that “a former business partner of German tennis star Boris Becker, who was last month declared bankrupt, is demanding the payment of 36.5 million euros ($54.4 million) which he claims he is owned by the former world no.1.”
TECHNOLOGY
Securitas boss bankrupted after ID theft
14 July 2017
IT News reports that “the chief executive officer of global security services provider Securitas has been declared bankrupt after falling victim to identity theft. Alf Göransson, who is also the president of Securitas, discovered in April that a falsified loan application had been made in his name the month before, and reported the matter to the police.
The loan application led to the Securitas chief executive being declared bankrupt by a district court in Stockholm, Sweden.”
14 July 2017
Smart Company reports that “luxury smartphone manufacturer Vertu is reportedly shutting down its UK manufacturing arm and is facing liquidation after plans to save the exclusive phone brand failed, leaving the company with a reported £128 million ($AU214 million) accounting deficit. The Telegraph reports nearly 200 jobs will be lost as a result of the shutdown of the UK manufacturing arm, with owner Murat Hakan Uzan initially seeking to buy the company out of administration for £1.9 million ($AU3.18 million).”
Bowens International in liquidation
21 July 2017
Photo Review reports that “several European sources confirm that Bowens International Ltd., the English manufacturer of studio flash units, has gone into liquidation.”