March news digest
03 April 2017
The following are summaries of media stories related to business turnaround and insolvency in Australia during March 2017.
1 March 2017
The Weekly Times reports that “National Dairy Products owner Tony Esposito has offered to pay dairy farmer creditors in full over 12 months in a last-ditch attempt to fend off liquidation of his failed company. The offer was a “side deal” to a formal deed of company arrangement run through administrators of the company. Mr Esposito offered $200,000 in a DoCA, to be shared between non-dairy farmer creditors owed money.”
1 March 2017
News.com.au reports “he’s worth more than $8 billion, but Uber boss Travis Kalanick is not above arguing with a driver over the fare. The ride-sharing giant’s chief executive and co-founder got into a shouting match with a driver who was angry over dropping prices and lower pay, a dash-cam video of the encounter shows. Driver Fawzi Kamel and Mr Kalanick raged at each other in San Francisco, after Mr Kamel complained that his finances were suffering after the company kept changing its business model and charging less and less for rides. “People are not trusting you anymore. … I lost $US97,000 because of you. I’m bankrupt because of you,” Mr Kamel — whose dashboard camera caught the encounter — told Mr Kalanick after he brought him to his destination on February 5.”
1 March 2017
Dynamic Business reports that “Australian businesses are set to experience an increase in insolvencies this year as a result of another difficult economic year, according to the recently-published Atradius Economic Outlook. The likely 2% increase in insolvencies puts Australia in step with the UK and Canada. The improving trend in the business environment across Australia and other advanced economies is expected to come to a halt this year. Changes in insolvencies predominantly depend on movements in the business cycle.”
1 March 2017
The Bendigo Advertiser reports that “property owners affected by the collapse of Watersun Homes have been advised to check their domestic building insurance policies, as the administrators work to ensure their homes are completed. The Melbourne-based homebuilder went into voluntary administration on Tuesday, affecting central Victorian families and businesses. The company has 300 projects in Victoria, about half of which are in metropolitan Melbourne.”
2 March 2017
The Northern Star reports that “Northern Rivers residents are starting to pay off their debts as new figures revealed less people declared bankruptcy in 2016. The latest figures from the Australian Financial Services Authority showed 35 bankrupt debtors including nine business-related and 26 non-business related insolvencies in the December quarter. Over the whole year 158 people declared bankruptcy compared with 171 in 2015.”
2 March 2017
The Esperance Express reports that “more than 100 employees are in limbo after Shark Lake abattoir went into voluntary administration last week. The local meat processor will close for two weeks, saying the company’s future was in jeopardy, after what it described as the most difficult time in the meat industry in living memory. Administrators were appointed on Friday, February 24.”
3 March 2017
The Chinchilla News reports that “Western Downs businesses have been burned by a long-term contractor for Cameby Downs Mine, after the business went into liquidation owing a total of more than $1.8 million. Dalby's Skyreach Pty Ltd, Chinchilla's MFE Pty Ltd and Miles' Kelly Green Pty Ltd together are owed roughly $300,000 after Conveyor and General Engineering Pty Ltd (CGE) went into liquidation last month. Liquidators say CGE owed unsecured creditors a total of $1,585,000 and a further $180,000 in unpaid employee entitlements. At the time of liquidation, CGE was also involved in a lengthy Supreme Court battle which began in 2013 with Basetec Services, with the latter claiming CGE owed them $1,674,000. That claim is disputed by CGE.”
3 March 2017
News.com.au reports that “a year ago, Peabody Energy's chief executive was presiding over $US2 billion of losses as the world's largest private sector coal miner spiralled into bankruptcy. Now, CEO Glenn Kellow and other top executives stand to reap tens of millions of dollars in stock bonuses under Peabody's bankruptcy exit plan, which sets aside 10 per cent of newly minted shares for employees. The executives would collect a big portion of that stock when the company exits bankruptcy, expected in April. The shares would be worth about $US15 million for Kellow and between $US3 million and $US5 million for each of five other executives, according to a company estimate.”
3 March 2017
News.com.au reports that “a Victorian builder has left families with half-finished homes and potentially thousands of dollars out of pocket after placing his company into liquidation. Guymer Lynnch Pty Ltd, founded by builder Shane Guymer, was placed into liquidation last month amid claims of shoddy work, long build times and unpaid contractors. Customers in suburbs across Melbourne including Croydon, Bundoora, Thornbury, Bulleen, Box Hill, Cranbourne and Point Cook have been affected. Attempts to contact Mr Guymer by phone and email have been unsuccessful and the firm’s website has been taken down.”
7 March 2017
The Border Watch reports “a sea of high-visibility clothing surrounded two auctioneers as they stood atop a shiny, white utility at SMB Civil's liquidation auction yesterday. The crowd of prospective buyers and onlookers stood among a dozen trucks, utilities and heavy machinery items up for sale at one of the largest liquidating auctions in Mount Gambier's history.”
8 March 2017
ARN reports “networking and collaboration company, Avaya, has entered into an asset purchase agreement with US-based Extreme Networks to sell its networking business after the company filed for bankruptcy in January. As part of the agreement, Extreme Networks will serve as the primary bidder in a section 363 sale under the US Bankruptcy Code to acquire Avaya’s Networking business for a transaction value of approximately US$100 million, subject to adjustments.”
8 March 2017
News.com.au reports that “thousands of students are in limbo and hundreds of teachers jobless as the company that owns Sage Institute's network of colleges has stopped trading in Queensland and NSW and suspended training in Victoria. The Australian Careers Institute, which owns the Sage Institutes of Fitness, Aged Care, Massage, Education and Child Care went into administration in February. But on Wednesday administrators made the decision to shut up shop after a potential buyer pulled out.”
9 March 2017
News.com.au reports that “thousands of students at Sage Institute’s network of colleges have been told they will be given help to find a new college to continue their studies after administrators closed their campuses. The Australian Careers Institute, which owns the Sage Institutes of Fitness, Aged Care, Massage, Education and Child Care went into administration last month, but on Wednesday the Queensland and NSW campuses were shut down. Classes at the Victorian campuses have been suspended for a week as administrators keep discussions open with an interested party. Administrators expect to announce a decision on the Victorian classes within a week.”
9 March 2017
Proprint reports that “award winning marketing service provider Waivestar has gone into liquidation. It is believed Waivestar owes considerable sums of money to a number of print businesses in the Melbourne area. The business has just been taken on by Mercedes Waratah, which was believed to be owed money by Waivestar for work completed. The notification of liquidation was posted on March 8 saying, ‘Notice is given that at a general meeting of the members of the Company held on 07 March 2017, it was resolved that the Company be wound up and that Matthew Terence Gollant and Neil Stewart Mclean be appointed liquidators.’”
10 March 2017
NineNews.com.au reports that “a creditors' meeting for troubled construction company Watersun Homes has heard it has 420 houses on its books in Victoria. Administrators have been seeking expressions of interest to sell the business' assets, including its projects across Melbourne and in regional areas. The first creditors' meeting was held in Melbourne on Friday, where it was revealed the creditors' total is "give or take" $20 million. The company went into voluntary administration on February 28.”
11 March 2017
The Sydney Morning Herald reports “a scroll through the Instagram profile of Australian fashion designer Jessica White reveals a charmed life in sunny Bali, replete with cocktails, waterfront parties and an enviable wardrobe. But back home things aren't so sunny for more than 80 creditors to her company who remain empty-handed since Ms White left Australia potentially owing almost $1 million dollars and facing possible investigation for trading while insolvent.”
11 March 2017
The Marshalltown reports that “the chaos at Toshiba, the Japanese corporate giant, deepened Tuesday, with its chairman resigning and the company saying it would book a $6.3 billion (roughly Rs. 42,164 crores) loss related to its US nuclear business. Analysts are now speculating about the possibility that Toshiba, which employs almost 200,000 people in Japan and has significant investments in the United States, will have to file for bankruptcy.”
13 March 2017
The Southern Weekly reports “the universe just seemed to have all the answers. That was what Kim Woods, organiser of salvaged Henty 4WD show, had to say after more than 8000 people threw their support behind the pop-up alternative hosted by the Wodonga Turf Club on Saturday. It was revealed last Monday that the company behind the event, Explore Australia Exhibitions, had gone into liquidation owing $297,000. Disgruntled business owners who had paid tens of thousands of dollars ordering stock and booking stalls were rescued the next day thanks to a deal to hold the event in Wodonga.”
13 March 2017
The Sydney Morning Herald reports that “the owner of a car repair business in north-west Tokyo has been digging into his retirement fund to keep his shop going. He's in his mid-60s, he's not making money and he knows he'll eventually have to close down. But for now, he's managing to keep hold of his single remaining mechanic by deferring his loan repayments time after time. The man said the garage was begun by his father after the war and at one time boasted about 20 employees. He asked not to be identified, citing the risk to his reputation if customers knew the state of his business. It's just one of tens of thousands of fading small companies subsisting using easy refinancing terms that have lingered in Japan since the financial crisis.”
13 March 2017
9news.com.au reports that “disgraced wedding dress designer Johanna Johnson is back at work in a new studio across the road from Sydney's glamorous Bondi Beach despite the company registered in her name being in liquidation. It all came crashing down for the designer last year after Johanna Johnson Pty Ltd went into administration, leaving a huge question mark hanging over more than 50 brides who paid thousands of dollars up-front and in full for their wedding gowns. Johnson promised the women they would still receive their dresses, but that seemed like mission impossible when she was locked out of her Alexandria studio by the liquidator.”
14 March 2017
The Gold Coast Bulletin reports that “award-winning Gold Coast caravan manufacturer Paradise Motor Homes has been placed in the hands of receivers, casting doubt over the future of dozens of jobs. Yesterday, the company’s sales yard, which includes workshop premises, was closed and largely empty of caravans.”
14 March 2017
The West Australia reports that “six companies at the heart of an alleged $200 million Pilbara Ponzi scheme have been put into provisional liquidation by the Federal Court. Justice Michael Barker this morning appointed provisional liquidators of six companies associated with would-be Pilbara real estate developer Veronica Macpherson after the Australian Securities and Investments Commission applied for the move as part of its investigation of the alleged Ponzi scheme. ASIC claims the alleged scheme has taken up to $200 million from investors in Australia, Malaysia, Singapore, the UK and beyond.”
14 March 2017
Proprint reports that “the Melbourne print community is in fractious mood over the liquidation and sale of major print buyer Waivestar which went broke last week, and was subsequently bought by various people associated with Mercedes Waratah. Waivestar is rumoured to owe a lot of money to a lot of printers, although the first creditors meeting has yet to be held. It was founded in 2000 and owned by Laurie Clark, former owner of Superior Press which also went broke owing significant amounts of money, and by former Telstra businesswoman of the year finalist Michelle Powell.”
15 March 2017
The Gold Coast Bulletin reports that “the company of former bankrupt developer Larry Matthews was making the decisions about which subbies got paid before the building firm owned by his son collapsed with $6.8 million in debts. Documents and emails to subbies show the Gold Coast businessman’s company played a background role in the period leading up to Bluestone Constructions Pty Ltd having its building licence suspended by the Queensland Building and Construction Commission on February 13.”
16 March 2017
The Australian reports that “Toshiba’s chief executive says he is considering a chapter 11 bankruptcy filing for its troubled US nuclear affiliate Westinghouse Electric as one way to stop the bleeding after losses topping $US6 billion ($7.9bn). It was the first public confirmation by Toshiba that it was considering the idea. Japan’s finance minister previously urged Toshiba to make a decision by the end of March. The statement by Toshiba’s chief executive, Satoshi Tsunakawa, came after further signs of deterioration at the venerable Japanese conglomerate, which has suffered through repeated accounting scandals and management turmoil over the past two years.”
15 March 2017
The Courier reports “Thirteen international circus performers are stranded, cashless in Ballarat after the Great Moscow Circus went into liquidation this week. The circus was booked to perform at Ballarat Showgrounds for four nights, from Wednesday through to Saturday. Staff and contractors were told on Tuesday the company was going into voluntary administration, general manager Shane Lennon said. Mr Lennon, who has been contracted by the Great Moscow Circus, said international performers were given paperwork to fill out for their entitlements and told to go to their consulate for the rest.”
17 March 2017
The Gold Coast Bulletin reports that “the State Government is to consider a crackdown on ex-bankrupt developers becoming involved on major construction jobs after another building company collapsed on the Gold Coast. The Gold Coast Bulletin can reveal Larry Matthews, who previously faced insolvency issues, was a “permanently excluded individual” by the Queensland construction industry watchdog. Mr Matthews filed for bankruptcy in 2012 when his biggest lender asked him to pay back $60 million and only became solvent in November 2015.”
17 March 2017
ABC News reports that “a major creditor of the beleaguered whisky company Nant Distilling has plunged the Tasmanian spirit maker into receivership, as it moves to protect its estimated $2.5 million in assets. Finance company Eclipx Commercial Pty Ltd — which specialises in equipment leasing and financing — has appointed receivers of Nant Distilling Pty Ltd. The receivers have now begun the long and complicated task of determining who owns what, including determining what happens to the whisky stills and barrels.”
17 March 2017
The Hawkesbury Gazette reports that “iconic Windsor pub The Fitzroy Hotel has closed its doors, eight months after owners Jennie and Philip Young purchased the lease from previous long-term owners Rebecca and Troy Mifsud. The Youngs, who live in Beecroft, ceased trading on Monday, and placed their business, Mesh Hotels Pty Limited, into voluntary liquidation following insolvency. Mrs Young blames a lack of people coming to Windsor, and told the Gazette she thought Hawkesbury Council should take charge of the problem.”
17 March 2017
The Coffs Coast Advocate reports that “a worker employed on the Pacific Hwy upgrade near Macksville has come forward after it was announced company KNF Construction is going into administration. "I was working on the local Macksville highway upgrade constructions. I woke up this morning to a phone call explaining that the company that promised me 8 month’s full-time work was going into liquidation and they have flown back to Ireland," the worker said. "There's 100 local workers without work and money because we were meant to be paid today."
18 March 2017
The Gold Coast Bulletin reports that “embattled developer Larry Matthews has vowed to pay back Gold Coast subbies owed more than $6.8 million on a project developed by his son’s company. Breaking his silence after the collapse of Bluestone Constructions Pty Ltd, Mr Matthews said: “It is my intention to pay creditors, this will come from the sale and settlement of assets within the Matthews Property Group”. Bluestone’s Waterford North and South project involved 255 units in a 4-stage development with 68 units built and completed in the first stage and the remaining 187 units later.”
20 March 2017
ARN reports that “Dick Smith receivers, have gone after eight former directors and executives of the collapsed electronics retailer with a damages claim worth millions, according to reports. The details of the legal action, which was laid out in a statement of claim lodged in the Supreme Court of NSW on 17 March, include allegations that the former Dick Smith directors and executives breached their duties by failing to implement “adequate system” related to rebates and inventory management, Fairfax Media reported on 19 March.”
20 March 2017
SBS reports that “restructuring expert John Spark, is the new chairman of dairy cooperative Murray Goulburn. Mr Spark will take over at the end of March from current chairman Philip Tracy, who flagged his retirement at Murray Goulburn's annual general meeting in October 2016. Mr Tracy said in October that he was ultimately responsible for Murray Goulburn's performance and he was deeply sorry for the impact that the April 2016 cut to the farmgate milk price had had on dairy farmers.”
20 March 2017
The Ragtrader reports that “Herringbone Australia owes two secured creditors $22.7 million and has an unsecured creditor toll of $1 million. In minutes from the first meeting of creditors, it was revealed the debt owed to one secured creditor will increase and is not included in the $22.7 million.”
21 March 2017
The Advertiser reports that “the family at the centre of the Hindmarsh Island bridge saga is fighting to keep control of the marina that sparked one of the state’s most divisive public conflicts. The Chapmans, who battled for about a decade to build a bridge linking Goolwa with an expanded island marina, risk losing the business after its parent company, Kebaro Pty Ltd, was placed into receivership earlier this month. The move paves the way for the potential sale of The Marina Hindmarsh Island’s extensive assets to recoup debts owed to Westpac.”
22 March 2017
Splash Magazine reports that “following financial difficulties, swimming pool equipment supplier Emaux Water Technology (Australia) has gone into liquidation. The liquidation only applies to the Perth-based supplier Emaux Water Technology (Australia) and does not affect the Emaux China manufacturing operation in Hong Kong, which is itself owed monies by the Australian operation. At the time of writing, Emaux China had not registered as a creditor although it had been given notice by the liquidators. While Emaux Water Technology (Australia) has a supplier contract with Emaux China, there are no common ownerships.”
22 March 2017
The Geelong Advertiser reports that “a Queenscliff dive operator owing more than $1.5 million to creditors has run a charter days after his business was put into liquidation. Dive Victoria director Jason Salter told the Geelong Advertiser on Tuesday the Port Phillip Heads charter on March 19 was run by Wetsports Pty Ltd. Mr Salter on Tuesday denied being the Wetsports owner, but corporate watchdog records show the company is registered to the same Queenscliff address as Dive Victoria. Mr Salter is listed as a former Wetsports managing director on professional networking site LinkedIn.”
22 March 2017
Money Management reports that “the Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services licence (AFSL) of Aquaint Capital Limited, which is in liquidation. Aquaint is the responsible entity for Aquaint Income Fund (the scheme). It was placed into liquidation on 1 September 2016 following a creditors’ resolution that it should be wound up due to being insolvent. The liquidators began the winding up process on 14 September 2016.”
23 March 2017
The Sydney Morning Herald reports that “the CEO of a failed education company says its demise is "the doing of two government agencies", who ultimately wear responsibility for the 2000 students left without the certificates they paid for, or a refund. Get Qualified Australia (GQA) was an education consultant that assisted job seekers in obtaining qualifications in industries, such as beauty, construction and business. However last Friday the company was declared "unable to pay its debts" and would be voluntarily wound-up.”
23 March 2017
The West Australian reports that “farmers in the Esperance area are coming to terms with the closure of the Shark Lake Food Group’s Myrup abattoir. The Shark Lake Food Group facility is an export-licensed works, capable of processing beef, sheep, goats and offal. It is also a major employer in the Esperance area, with more than 100 employees involved in the work’s operation. Administrators were appointed on February 24.”
24 March 2017
News.com.au reports that “the receivers of failed children’s clothing retailer Pumpkin Patch have confirmed that the company’s brand and intellectual property have been sold to Australian online retailer Catch Group. No price was disclosed for the sale in the statement from administrators. In January, the receivers said they had failed to find a buyer for the chain and its stores would be progressively closed. The company was tipped into receivership by its lenders in October and appointed voluntary administrators after failing to reinvent itself in the face of shrinking sales and too much debt. The receivers wanted to sell the business as a going concern, but couldn’t shake out any buyers. Pumpkin Patch owed its lender ANZ Bank New Zealand $56.6 million as of the date of receivership.”
27 March 2017
SBS.com.au reports that “an arrest warrant has been issued for Clive Palmer's nephew who has again dodged a Federal Court grilling over the collapse of Queensland Nickel. The sole registered director of the company when it went belly up last year, with debts of $300 million and the loss of almost 800 jobs, Clive Mensink has been travelling overseas since well before court proceedings began last September. His latest no-show in the Federal Court on Monday will result in a charge of contempt of court brought against the elusive globetrotter.”
27 March 2017
The Courier Mail reports that “problems are heaping on a self-styled investment guru, with his former lawyers seeking to bankrupt the Gold Coast man over an alleged outstanding debt. A lawsuit filed in the Federal Circuit Court in Brisbane claims former investment manager Roger Munro owes $17,680.71 to Gold Coast-based HW Litigation. It marks another hurdle for Dr Munro, who was also charged with five counts of fraud this month following an Australian Securities and Investments Commission investigation.”
27 March 2017
News.com.au reports that “shares in Toshiba have plummeted in Tokyo after Japanese media reported the company's troubled nuclear power unit is preparing for a bankruptcy filing in the US this week. Shares in Toshiba closed down 2.1 per cent. Earlier in the day, they had been down by as much as 6.5 per cent. The US unit Westinghouse Electric could file for bankruptcy as early as Tuesday, the Nikkei business daily reported, without citing any sources.”
28 March 2017
Business Insider Australia reports that “Revalu8, a self-described “Uber of real estate” launched in July last year, has sunk into liquidation. Creditors decided to wind up the Queensland start-up and appoint a liquidator at a meeting last week, with a software development company owed more than $486,000 out of total debts of $687,938. The Revalu8 service launched last June backed by $1.5 million of seed funding, with a mission to connect buyers and vendors of residential real estate. The site provided comparison tools for potential buyers, as well as promising complete transparency on transactions and negotiations between the buyer and the vendor.”
28 March 2017
SBS.com.au reports that “the Turnbull government wants to introduce new insolvency laws to provide breathing room for directors in hard times to enable them to try and turn around their business. Releasing draft legislation for discussion on Tuesday, Revenue and Financial Services Minister Kelly O'Dwyer says the aim is to create a 'safe harbour' from personal liability for company directors during a formal insolvency process and help reduce the stigma associated with a failed business.”
28 March 2017
The Ballarat Courier reports that “builders have been secured to complete half of the more than 400 properties affected by the collapse of Watersun Homes. Mega Homes, VM Builders and Ric Jelfs Custom Homes will finish the builds, which administrators said were in various pre-contract or contract stages. “These owners have been advised of the sale by our office and the builders will now contact the owners to agree terms for the completion of their homes,” administrators said. The remaining 200 property owners had either terminated their contracts, or the administrators were unable to secure interested parties to complete their homes.”
28 March 2017
Business News WA reports that “the Federal Government has introduced draft insolvency reforms designed to offer more protection for company directors and make it easier to restructure faltering businesses.”
29 March 2017
The Advertiser reports that “Toshiba's troubled US nuclear unit, Westinghouse Electric, has filed for Chapter 11 bankruptcy protection as its Japanese parent seeks to limit losses that have plunged it into crisis. The filing will allow Pittsburgh-based Westinghouse, whose nuclear plant projects have been dogged by delays and cost overruns, to renegotiate or break its construction contracts, although the utilities that own the projects would likely seek damages.”
29 March 2017
The Illawarra Mercury reports that “Indian mining mogul Arun Jagatramka, who left Wollongong after his company spluttered and was taken over, has filed for insolvency protection in his homeland. Gujarat NRE Coke, former parent company of what is now Wollongong Coal, has applied for insolvency resolution, the firm told the Bombay Stock Exchange (BSE). True to form, Mr Jagatramka has assured shareholders it is just a minor bump in the road and the future looks bright for the company.”
30 March 2017
NT News reports that “the Territory Government has been told that more than 50 local businesses could be forced to fold after indigenous focused mining services company ICRG North went into voluntary administration. A meeting of creditors in Darwin on Wednesday was told the company owed $2.5m to unrelated creditors and $1.5m to related creditors. Those at Wednesday’s meeting expressed anger and despair and called on the government to take action to save their businesses. Some told of facing financial ruin.”
31 March 2017
SmartCompany reports that “the chief executive of training organisation Republica Education says Australia needs to rethink how private colleges, TAFEs and universities deliver higher education after government policy contributed to Republica entering liquidation this week. The company’s chief executive Ryan Trainor told SmartCompany the liquidation of Republica Education Pty Ltd, which until recently had five specialist training schools in the area of beauty and design under its umbrella, is part of a restructure and “pivot” on his part away from accredited education.”
31 March 2017
ARN reports that “a new report by the companies’ administrators, reveals the major contributing factors behind the group’s demise, and a fresh glimmer of hope for some creditors, in the form of a multimillion-dollar cash injection by owner, Skidmore Retail Group.”