June news digest
03 July 2017
The following are summaries of media stories related to business turnaround and insolvency in Australia during June 2017.
AUSTRALIA
PROPERTY and CONSTRUCTION
Salim Mehajer loses court bid to oust administrators from companies
30 June 2017
The Sydney Morning Herald reports that “Salim Mehajer has lost his urgent court bid to remove administrators appointed to two of his companies, as creditors clamour for almost $100 million from the property developer and former deputy mayor. In a decision delivered on Friday afternoon, Supreme Court Justice Stephen Robb declared administrators were validly appointed to Mr Mehajer's companies Sydney Project Group and S.E.T Services. Justice Robb said he was "not sufficiently persuaded" by evidence given by Mr Mehajer in support of his case. However, he said it was not necessary to make "any direct findings concerning the truthfulness" of the evidence.”
ASIC moves on failed Pilbara property scheme
9 June 2017
The Sydney Morning Herald reports that “Australia's corporate watchdog has moved to shut down 19 companies associated with a failed Pilbara property scheme marketed by get-rich-quick spruiker Jamie McIntyre. The Australian Securities and Investment Commission has applied to the Federal Court of Australia to appointed Liquidation liquidators to 19 companies run by Perth businesswoman Desiree Veronica Macpherson's Macro Realty group.”
Builder Insolvencies and Holes in the Ground
8 June 2017
Sourceable reports that “the Australian high-rise apartment boom is winding down and there are signs that some contractors are winding up. The margins are tight, finance is harder to obtain and work in progress is diminishing. Some seasoned property developers have recently warned of an impending downturn. In the emerging paradigm, there will be more insolvencies, and when builders go into liquidation. the financiers and the property owners are left to ‘carry the can’ with the ‘can’ often taking the shape of a whopping great hole in the ground or a partially completed high-rise. When the property owner is confronted with this debacle, the developer and the developer’s backers have to be very, very careful. If they do not act quickly and prudently, they will take an absolute bath and their own solvency may be tested.”
MINING
Korean consortium emerges as preferred bidder for Arrium
15 June 2017
The Australian reports that “Korean steel giant Posco and private equity firm Newlake have been named as preferred bidders for Arrium, ousting rival consortium Liberty House and Simec. Arrium was placed into voluntary administration last year. Morgan Stanley has been advising on the sale. JB Asset Management is also involved in the bid. On offer has been Arrium’s iron ore mining operations, Whyalla Steelworks in South Australia and its more profitable east coast steel operations. Posco’s partner, Newlake, is run by a group of former executives from the private equity giant Blackstone.”
Clive Palmer property portfolio hits the block
6 June 2017
The Australian reports that “the great property liquidation by embattled mining magnate-turned politician Clive Palmer is well under way. The former Brisbane headquarters of the collapsed Queensland Nickel was finally sold yesterday, with Palmer likely to receive more than $20 million from the sale. The funds are expected to help pay down a high interest loan linked to the site.”
Wongawilli miners down tools as Delta SBD goes into administration
2 June 2017
Australian Mining reports that “operations at Wongawilli colliery have halted after its service provider was placed into voluntary administration, Wollongong Coal has confirmed. Administrators have stood down Delta SBD’s workforce – meaning work at the Illawarra coal mine have stopped temporarily. Delta, which employed more than 300 coal miners across the Illawarra region, has been contracted at Wongawilli colliery since July 2016.”
RETAIL
Pressed Juices owner faces bankruptcy
27 June 2017
The Australian reports that “the founder of posh juice chain Pressed Juices, former toner cartridge king Leo Pegoli, faces bankruptcy at the hands of an unpaid supplier. Frutex Australia, which supplies dried and frozen fruit to food manufacturers, in March asked the Federal Circuit Court to bankrupt Mr Pegoli over a debt of almost $60,000. However, it appears Frutex has had difficulty making contact with the entrepreneur, with the court in May noting that the bankruptcy petition had not been served. In a further twist, The Australian can reveal the corporate regulator has deregistered the company that sits atop the Pressed Juices empire, leaving the business without a shareholder.”
Retail pain spreads up the chain
26 June 2017
The Australian reports that “the carnage running through the nation’s $300 billion retail sector, triggering a wave of clothing chain failures, is now spreading up the supply chain as suppliers are hit by bad debts. A key importer of suits has now collapsed into liquidation. Helder Distributors, which imported and distributed luxury Italian menswear brand D’Urban and handled local sales for Italian clothing brand Paul & Shark, has gone into liquidation. It was dragged under by difficult trading conditions that have resulted in many of its retail customers going out of business. Based in Melbourne, Helder employed nine staff and was well known within the menswear fashion industry as the local importer for a range of upmarket Italian clothing, especially high-end suits, that were sold in independent retail outlets, smaller chains and the national department store David Jones.”
How to survive bankruptcy: 3 crucial lessons I learnt from starting again
16 June 2017
The Australian Financial Review reports “there are a million different ways life taps us, disrupts us and interrupts us. Sometimes the consequences are so dire we wish we could rewrite the history books. These are the black swan moments. My black swan moment came in 2009 and led to my husband, Tim, and I losing our livelihood, our home and access to cash. We had owned a successful retail pet shop in country Victoria and then bought out one of our national suppliers: a seven-figure business with five staff members.”
Creditors to meet in Dubbo after Spectrum Window Fashions goes into liquidation
14 June 2017
The Western Advocate reports that “a business owned by former Bathurst mayor Gary Rush has gone into voluntary liquidation owing money to the Australian Tax Office and some suppliers. Chris Chamberlain of Chamberlain’s SBR has been appointed liquidator for Spectrum Window Fashions Pty Ltd after a general meeting of the company members on June 8 resolved to have the business wound up. Mr Chamberlain said while his investigation was in its early stages, he had not found any evidence so far that there was any money owing to Spectrum customers or employees.”
SumoSalad uses insolvency laws to fight Scentre's Westfield
13 June 2017
The Australian Financial Review reports that “the fight between fast food chain SumoSalad and several Westfield shopping centres over lease payments brings into sharp focus the rising tension between tenants and landlords amid rapidly changing consumer shopping habits. Luke Baylis, the chief executive and co-founder of SumoSalad, on Tuesday took the extraordinary step of putting two of the 20 companies in his group into voluntary administration in order to force several Westfield centres to the negotiating table. After many failed attempts over the past six months to negotiate cuts in leasing charges Baylis put two companies, Sumo Westfield Leasing Pty Ltd and Sumo Leasing Pty Ltd, into voluntary administration.”
Cars towed from ACT to Sydney as insurers drive small smash repairers bankrupt: Motor trades body
9 June 2017
The Canberra Times reports that “insurers are driving small crash repairers out of business with unfair policies, the ACT's peak motor trade body claims. Motor Trades Association ACT president Michael Bourke said many local shops were struggling to stay afloat because insurance companies were unfairly preventing people from choosing their repairers.”
9 June 2017
News.com.au reports that “Jessica White looks just like any young Australian holidaying in Bali. With her blonde hair pulled into a casual top knot and a skimpy white playsuit showing off her deep tan, she appears not to have a worry in the world. But her customers and suppliers claim the fashion designer behind Shakuhachi owes them close to $1 million — and they’re not happy. Ms White jetted off overseas after the company went into liquidation, leaving a trail of debts in her wake.”
Myer a shareholder and creditor to failed Topshop franchisee
6 June 2017
The Australian Financial Review reports that “Myer could lose more than $10 million on its 18-month partnership with British fashion brand Topshop if a rescue package by brand owner Arcadia Group is insufficient to repay creditors. Myer not only owns 20 per cent of the Australian Topshop franchisee, Austradia, it is also an unsecured creditor to the company, which was placed into voluntary administration late last month owing about $36 million to creditors. Sir Philip Green's Arcadia Group, which owns the Topshop and Topman brands, is expected to take control of the Australian business and buy back all the stock and inventory as part of a working capital deal or a deed of company arrangement.”
Topshop administrators focus on cost cuts
5 June 2017
The Australian reports that “administrators of high-profile fashion chain Topshop Australia are continuing to work on cost-cutting measures so they can fashion a deal with the British owners of the brand. Topshop Australia, which is a franchise, was the latest victim of tough local retail conditions, collapsing last month after the appointment of voluntary administrators at Marcs, David Lawrence, Herringbone and Rhodes & Beckett.”
LOGISTICS
Litigation may derail troubled Boart Longyear revamp
8 June 2017
The Sydney Morning Herald reports that “in litigation to be heard on Friday, Mr Maurici is claiming a planned recapitalisation of the troubled mine service company will make it easier for the major shareholder in the company, Centerbridge, to force out minority shareholders, while arguing that parties to the restructuring proposal may be associated due to their links on this and other deals. As a result, he is seeking a delay in a shareholder vote to consider the recapitalisation which will deliver control to private equity investors and see the company's domicile move offshore.”
TOURISM and HOSPITALITY
Ferrier Hodgson: F&B pubs should not neglect revenue mix
29 June 2017
The Shout reports that “Hospitality Insights 2017 has been released by Ferrier Hodgson, providing analysis of the last year for the industry and what the outlook, new opportunities and causes for concern are in the next 12 months. The report notes the active year for the pub industry for 2016, with the gap between demand and supply driving a more active market in regional areas; and highlights major movements such as the expansion of Dixon Hospitality, and the receivership of Keystone Group - which Ferrier Hodgson handled. Looking ahead the report identifies opportunities for growth and optimal pub operations, including social media, hotel booking websites where accommodation is offered, and the use of third party apps such as UberEats.”
Viva La Vida in Darwin CBD going into voluntary administration
27 June 2017
NT News reports that “the demise of Viva La Vida Wine and Tapas Bar in Smith St in the city reinforces the importance of revitalising the Darwin Mall and the CBD, the Chamber of Commerce NT says. Viva La Vida staff say they were told on Sunday night that the business would be going into voluntary administration the next day. Yesterday, its doors were shut and despite the fact people were inside tidying up, phone calls were left to ring out and go to Viva La Vida’s answering machine, which made no mention of the closure.”
Shooters Gold Coast nightclub spokesman hits out in Supreme Court over equipment sale
26 June 2017
The Gold Coast Bulletin reports that “the right-hand man for the owner of a Coast nightclub institution is accusing a rival bar boss who bought all its equipment of commercial sabotage. Trevor Park — director of a company that is the new majority owner of Shooters club — makes the claim in an affidavit in Brisbane’s Supreme Court, which is denied by rival nightspot general manager Tim Martin. Mr Martin’s company Zaks Sky Pty Ltd has snapped up “anything not bolted down” at Shooters. The deal was inked last year with the Surfers Paradise nightclub’s former operating company Shooters JV Pty Ltd which went into liquidation.”
22 June 2017
In Daily reports that “the embattled Adelaide entrepreneurs behind the Royal Croquet Club have been given until tomorrow to confirm their intentions for Victoria Square as Renewal SA scrambles to resurrect a winter-themed festival for the CBD. The Social Creative (TSC), which runs Adelaide Fringe Festival hub the Royal Croquet Club among other popular events, fell into voluntary administration last week. As InDaily revealed yesterday, two major winter-themed city festivals next month are in serious doubt.”
Outback Trust investors face uncertainty
20 June 2017
Business News WA reports that “Perth entrepreneur Craig Mitchell and property fund manager Angelo Del Borrello are facing off over the future of four large roadhouses in northern WA, with the outcome having a big bearing on investors who pumped $22.5 million into four related property trusts. The dispute between Mr Del Borello’s Acure Asset Management and Mr Mitchell’s Outback Travel Centres, which has paid up capital of $15.4 million, has come to light after OTC was placed into administration. OTC operated four modern roadhouses at Karratha, Newman, Port Hedland and Karratha, on properties part-owned by the four unit trusts. The directors of OTC and a related entity, Outback Fuel Distributors, appointed voluntary administrators last Thursday, on the basis the business was likely to become insolvent.”
Brides snap with VCAT action as wedding photographer goes bankrupt
3 June 2017
The Herald Sun reports that “a wedding photography company has gone bust, leaving hundreds of desperate brides in the lurch — some just hours before their weddings. The Melbourne-based firm has also been widely criticised for, while still trading, taking money from brides and then not providing them with the quality and number of photos promised. Two angry brides-to-be who now have to find new photographers have lodged claims with Victorian Civil and Administrative Tribunal demanding refunds from the company that has gone under.”
Han’s Cafe operator fined nearly $40,000 for underpaying workers, company enters liquidation
1 June 2017
The Midland Reporter reports that “the operator of a Perth restaurant chain has been fined nearly $40,000 for underpaying the foreign workers she employed. The operator and franchise owner of several well-known Han’s Cafe restaurants, Tram Hoang Han, and several companies she was a sole director of, have been fined a total of $37,500 in the Federal Court of Australia. Han’s management company has entered liquidation, and the three restaurants owned by Ms Han and her company have reportedly collapsed. Twelve franchised restaurants continue to operate.”
COMMUNICATIONS
Geelong viewers watching streaming services in higher numbers
24 June 2017
The Geelong Advertiser reports that “our lounge room screens are bigger than ever before but it appears Geelong viewers — and audiences nationally — are picking up the smart phone or tablet in record numbers. New figures from the Bureau of Statistics show the total income of internet subscription services was $5.3 billion last financial year, exceeding the combined cash take of commercial networks— $3.9 billion — for the first time. Geelong retailers say subscription services such as Foxtel Play, Netflix and Stan continue to grow in popularity as viewers demand greater choice over when they watch programs.”
NXT hopes a stalemate over media reforms will be ‘resolved’ after winter break
23 June 2017
The Australian reports that “the Nick Xenophon Team was last night preparing to use the six-week winter break to try to resolve a stalemate over the government’s troubled media reform package as the industry calls for action “as soon as possible”. Communications Minister Mitch Fifield was keen to seize on momentum for change following the Ten Network’s voluntary administration and put the bills to a vote in the Senate this week. The Australian was told debate on the broadcasting bills would commence during a gap in proceedings on the Gonski 2.0 schools funding package, however passing the reforms through parliament looked highly unlikely. “Whether a vote occurs will depend on ongoing discussions with the crossbench,” government sources said. At time of publication the government had been unable to gain the necessary support for the legislation in its current form, which includes abolishing broadcast licence fees for radio and TV and repealing media ownership laws known as the 75 per cent reach rule and two-out-of-three rule.”
Channel 10 shares placed in trading halt as the network grapples with funding crisis
13 June 2017
News.com.au reports that “Channel 10’s future hangs in the balance as the embattled broadcaster struggles to repay its debts. Ten Network Holdings’ shares have placed into a trading halt this morning, amid speculation the network may announce a voluntary administration after three key backers decided not to support a new funding deal to refinance a $200 million loan. The Australian reported today Ten shareholders Lachlan Murdoch, Bruce Gordon and James Packer have decided against guaranteeing a new $250 million loan to replace the existing $200 million overdraft, which needs to be repaid to Commonwealth Bank in December. The network’s board is weighing its options while the trading halt remains in force, a process that could take several days.”
NEWS Moko Social Media goes into administration
9 June 2017
Mumbrella reports that “the once promising Australian online media company Moko Social Media which promised to take on Google and Facebook has been placed in voluntary administration. In recent years the company focused on developing mobile products aimed at the US high school and college student markets having shifted away from being a social media and digital content creator.”
EDUCATION
Thousands ripped off by education firm Get Qualified, rules Federal Court
29 June 2017
Choice reports that “thousands of customers who paid up to $8500 for education courses were subjected to misleading and unconscionable conduct by Get Qualified Australia, the Federal Court has ruled. The verdict comes as Get Qualified – a company that had a yearly turnover of $14 million and employed 50 staff at its peak – is being sold off in parts by liquidators. The Federal Court case was brought against the education firm by the Australian Competition and Consumer Commission (ACCC) after 5000 customers who paid between $500 and $8500 to enrol in a course did not receive a qualification. Get Qualified advertised that students would be entitled to a "100% money back guarantee" if they were unsuccessful in gaining a qualification, but almost always refused requests for a refund.”
Islamic College of South Australia placed into liquidation
20 June 2017
The Australian reports that “the insolvent Islamic College of South Australia has been placed into liquidation with the 400-student school to reopen under new management as the Australian Islamic College (Adelaide) on Thursday. Registration would be fast-tracked with the South Australian education department and reinstatement of federal funds was expected, said Australian Islamic College chief executive officer Abdullah Khan. Perth-based AIC, which has been negotiating since May with the school board, federal and state departments to take over the beleaguered Adelaide school, hopes to reinstate principal Kadir Emniyet, reported to have been sacked by rogue board members via a text message last week, when emotions boiled over between school management and parents.”
Bankruptcy action in QUT racism case
7 June 2017
7 News reports that “two students trying to recoup legal costs against a Queensland University of Technology staffer who unsuccessfully tried to sue them over what she claimed were racist social media posts have been unable to serve her with a bankruptcy notice. Barrister Tony Morris, who is representing the students, on Wednesday said efforts to serve the notice on Cindy Prior in person had so far failed. "People at her house kept saying she wasn't there," Mr Morris said outside the Federal Court in Brisbane. The students, Calum Thwaites and Jackson Powell, are trying to claw back $10,780 in legal costs awarded to them after Ms Prior's racial discrimination lawsuit was thrown out last year.”
INVESTMENT
ASIC investigates Australian music streaming start-up Guvera's missing millions
26 June 2017
ABC News reports that “the corporate watchdog is investigating failed Australian start-up Guvera after it left 3,000 investors wondering what happened to more than $180 million they ploughed into the company. The music streaming app stopped operating last month, less than a year after its long-awaited listing on the share market was blocked by the Australian Securities Exchange.”
Fight for bankrupt Peter Drake’s palatial Fiji property
17 June 2017
The Gold Coast Bulletin reports that “a bankruptcy trustee is fighting to take control of the sprawling Fiji holiday home of the founder of the failed LM funds management group, Peter Drake. Jason Bettles has revealed he is facing obstacles, including claims on the property from Mr Drake, his ex-wife, and daughter. He alleges Mr Drake is potentially breaching the Bankruptcy Act and his automatic discharge from bankruptcy might be opposed.”
Bankrupt whisky baron Keith Batt has run in to a bit of strife over his Angus herd investment scheme
12 June 2017
The Courier Mail reports that “bankrupt former whisky baron Keith Batt has run in to a bit of strife over his Angus herd investment scheme. It seems he didn’t notify the authorities in November when he moved the beasts around in western Queensland. Following a police probe, the one-time Nant Estate boss fronted Brisbane Magistrates Court last week, where he pleaded guilty to a single charge of failing to provide “prescribed information’’. He was released on the proviso that he maintain good behaviour for 12 months or cop an $800 fine. No conviction was recorded.”
LEGAL
Alex Malley has been asked to get dressed, now CPA Australia must clean house
26 June 2017
The Australian Financial Review reports that “the charismatic Alex Malley's eight-year reign at the helm of the beleaguered professional accounting body, CPA Australia is over. It ended with a depleted board of directors announcing his contract being terminated, a $4.9 million payout and a somewhat hollow: thank you. During Malley's tenure, CPA Australia's strategy shifted away from the core activities of the organisation – education, training, technical support and advocacy – to branding and building Malley's "big life" as the Naked CEO. Naïve members thought the board was looking after their interests, only to realise the primary attribute for board membership was to be a supporter of Malley's vision for the organisation: with his persona on centre stage and the core membership activities funding it.”
Sydney synagogue may have to close after court rules it can't sack rabbi
25 June 2017
The Sydney Morning Herald reports that “a Sydney synagogue may have to close because it is unable to sack its rabbi, the synagogue's president says. For 32 years, Benzion Milecki has served as the chief rabbi of the South Head and district synagogue, an orthodox congregation on Old South Head Road, Rose Bay. But this year, the synagogue attempted to bring that relationship to an end. Facing mounting financial difficulties, the synagogue's management appointed administrators on April 26. A day later, those administrators wrote to Rabbi Milecki to tell him he had been made redundant.”
IT part of rife illegal phoenixing in Australia
22 June 2017
CRN reports that “it’s not unusual for channel companies to collapse, especially when that business finds itself unable to meet its obligations to creditors. It’s also not entirely unusual to see other businesses springing up to take their place.
Where things start to get odd however is when those new businesses are eerily similar to the ones they are replacing, using similar assets and often being run by the same directors. Almost identical businesses, but with one key difference – the successor is unencumbered by the debt burden or other liabilities that sent its predecessor to the wall. There is a special and appropriate name for a business that rises from the ashes of its predecessor – a phoenix business. And it is a practice is getting a lot more attention from the Australian government.”
What happens when you go bankrupt?
21 June 2017
RiotAct.com reports that “according to statistics from the Australian Financial Security Authority, the number of debtors who entered a personal insolvency in the ACT rose 26.9% in the March quarter (compared to the December quarter 2016). The main contributor to the increase was Belconnen, with the biggest rise in new debtors, followed closely by Gungahlin. The number of debtors who entered a business related personal insolvency in the ACT rose 84.6% in the March quarter, compared to the December quarter 2016. Again, the biggest contributors were Belconnen and Gungahlin. Bankruptcy is a scary proposition for many people, and from the moment we’re old enough to understand how money works, we’re warned about the dire consequences of failing to pay bills or run a profitable business.”
Attacker’s bankruptcy means assault victim Andrew Kent unlikely to see more than $800,000 in damages
18 June 2017
The Adelaide Advertiser reports that “a building supervisor who was assaulted at the Queen Elizabeth Hospital by an employee has been awarded more than $800,000 in damages, but is unlikely to see any money because his attacker is bankrupt. District Court Judge Rauf Soulio awarded former gyprocker and building supervisor Andrew Kent $815,624 in compensation for past, current and future losses after he was punched in the face by Shane Redhead in January 2012.
Mr Redhead, who is now bankrupt, called his boss and said he was on his way to the construction site and wanted to meet him.”
Corporate bankruptcy numbers lowest in four years
15 June 2017
The Daily Telegraph reports that “despite numerous high-profile collapses recently, including retailer Topshop/Topman and broadcaster Network Ten, the number of companies falling into voluntary administration has dropped this year, according to research by restructuring firm FTI Consulting. FTI senior managing director Quentin Olde said the level of corporate failures in 2017 was at its lowest level in four years and was continuing to decline.”
Safe harbours for directors would see more business set sail
14 June 2017
The Australian Financial Review reports that “our insolvency laws are widely recognised as being among the harshest in the world. Unlike comparable countries, such as the UK and Singapore, where the law focuses on what directors are doing to try to turn a company around, Australia's laws focus solely on the tipping point where a company cannot pay its debts at the point in time when they fall due. Due to the personal liability implications for directors, the perverse result of this is that the Australian system pushes directors down the route of administration, irrespective of the longer-term viability of the company. This stifles innovation and potentially causes businesses to prematurely close their doors.”
Plutus calls in administrators over ‘$130m scam’
13 June 2017
The Australian reports that “the payroll company at the centre of an alleged $130 million Australian Taxation Office fraud has appointed voluntary administrators to “protect the interests of creditors and stakeholders” impacted by the unprecedented white-collar crime. David Iannuzzi and Vincent Pirina, from insolvency firm Veritas Advisory, have been tasked with investigating the financial affairs of Plutus Payroll. The Sydney-based payroll administration company paid more than 6000 contractors’ wages and superannuation each month and was allegedly used to siphon off an estimated $130m in PAYG tax via an intricate network of secondary companies and straw directors.”
Tougher company director ID requirements under spotlight
11 June 2017
The Sydney Morning Herald reports that “the introduction of company director identification numbers to help prevent the deliberate liquidation of companies to avoid paying workers' entitlements and tax is being considered by the federal government. A Federal Treasury spokeswoman told Fairfax Media the introduction of a director identification number had been recommended by a Productivity Commission inquiry and a Senate economics committee inquiry into insolvency in the construction industry and was being considered.”
Administrators move in on company accused of ATO tax scam
9 June 2017
9 News reports that “administrators have been appointed to oversee the company at the centre of an unprecedented payroll fraud linked to a senior tax office bureaucrat and his children. "The administrators' intention at this point is to act swiftly to protect the interests of the Plutus' creditors and other stakeholders," Veritas said in a statement on Thursday evening. Plutus ceased trading completely since it was revealed last month the company was at the centre of a $130 million scandal which involved a complex web of co-conspirators, companies, straw directors and bank accounts.”
Fair Work Ombudsman secures near-record fines over 'phoenix' scheme
7 June 2017
The Australian Financial Review reports that “a Sydney labour hire firm has been ordered to pay more than $670,000 over its use of a sophisticated phoenixing operation to underpay foreign workers and treat them like "slaves". The Federal Court on Wednesday ordered Grouped Property Services, which provides cleaning services, to pay near-record penalties of $447,300 and backpay of $223,244 to 49 employees after a three-year Fair Work Ombudsman investigation exposed the scheme. Former GPS director Rosario Pucci, an undischarged bankrupt whom Justice Anna Katzmann found was "intimately involved" in the exploitation, set up a second-tier shell company which engaged cleaners under ABNs to avoid paying minimum wages and entitlements.”
Lawyer Robert Hession disqualified from practice
6 June 2017
The Herald Sun reports that “a disgraced lawyer who once managed AFL star Tony Lockett is now bankrupt and living in his car, with receivers investigating claims that more than $1.5 million went missing from clients at his practice.
The Victorian Civil and Administrative Tribunal has recommended Robert Hession be permanently struck out from the legal profession after being found guilty on 13 charges of professional misconduct, forging documents to access money for work he had not performed. He has already been disqualified from practising for five years and is an undischarged bankrupt.”
Bankrupt Bryan Byrt bosses get support from family and friends
1 June 2017
The Courier Mail reports that “the bankrupt directors of collapsed car dealer Bryan Byrt have been living in homes supported by a parent, children or friends, a court has heard. The boss had been living in an apartment renting at $1000 a week. Some people supporting the directors had been tied to businesses that did hundreds of thousands of dollars in controversial work at Bryan Byrt. The detail was revealed at the bankruptcy hearings of Brendon Crowley, who headed the business, and his father John Crowley, who sold a 51 per cent stake in the dealership to Brendon in 2007. They were directors at Bryan Byrt, which traded vehicles from Fords to Volkswagens at seven Queensland sites but collapsed owing almost $70 million to creditors in November 2014.”
TECHNOLOGY
Technology and media platform Tapit Media enters voluntary administration
28 June 2017
Mumbrella reports that “Australian technology and media company Tapit Media, which aimed to complete the connection between digital content providers, brands and consumers through their mobile devices, has been placed into voluntary administration. Administrators are seeking a buyer for some or all of the assets of the business or a saviour to recapitalise. Tapit was launched in 2011 offering NFC, beacon and QR marketing campaign tag management and Airmarket, a location-based software program allowing advertising to push messages to nearby devices.”
Power costs claim Adelaide business
27 June 2017
News.com.au reports that “a plastics recycling company has blamed South Australia's soaring electricity prices for its closure, with the loss of 35 jobs. Plastic Granulating Services has gone into liquidation after its electricity bills soared from $80,000 a month to $180,000 a month over the past year and a half. Managing director Stephen Scherer says the price hikes simply couldn't be absorbed and were the "final straw" for the company founded by his father 38 years ago. "I am absolutely devastated," Mr Scherer said on Tuesday. "I literally kept a close daily monitor on electricity prices and at the end of the day we were simply unable to wear the extra expense as we attempted to maintain an appropriate (profit) margin across the business.”
Administrators investigate potential breaches from Novo IT directors
27 June 2017
CRN reports that “preliminary investigations by the administrators of Novo IT have suggested there may have been offences and voidable transactions, according to a Deloitte report to creditors obtained by CRN. The administrators understood that prior to the appointment of administrators, Novo IT's business operations stopped trading and a new entity, Novo IT Australia, began operating under a direct service agreement. Shares valued at $250,000 were provided to Novo IT as part of the agreement. However, this transfer of business did not receive the Australian Taxation Office's approval, according to the report. "In our opinion, this transfer represents an uncommercial transaction and would be voidable as to a liquidator if so appointed. As such, we have included the transaction as recoverable in all liquidation scenarios," the administrators said.”
22 June 2017
Smart Company reports that “Brisbane-founded recruitment start-up iRecruit made its Shark Tank debut on Tuesday night, but a lot has happened at the company since the television episode was filmed last year. IRecruit attracted $500,000 in pre-launch seed funding in August 2016, but by the time Tuesday’s Shark Tank episode went to air, both of the company’s co-founders had stepped down from their roles and the start-up had been placed in liquidation. The startup was billed as a cloud-based platform for job seekers and employers, which would use behavioural science to match these groups together. Co-founders Todd Pierce and Aleksandar Svetski bootstrapped the platform with $100,000 and then secured external funding from angel investors in August last year. However, within months, iRecruit Australia Pty Ltd was placed into voluntary administration.”
Another mailing house into liquidation
14 June 2017
Print21 reports that “Melbourne-based mailing house and marketing agency Digital Logic has gone into liquidation and a creditors meeting is expected to be announced shortly. The Supreme Court of New South Wales posted a Notice to Liquidator of Appointment that says Digital Logic Asia Pacific (known as DLAP) of 477 Warrigal Road, Moorabbin, VIC has been wound up by order of the court’s equity division. The application for the winding up was filed on 31 March by plaintiff Talent Growth Solutions.”
Defunct Perth reseller Base IT accused of trading insolvent
14 June 2017
CRN reports that “investigations into Perth-based Corporate Computers IT, which traded as Base IT Australia and fell into liquidation in March 2016, have found evidence the company may have traded while insolvent for years before its collapse. Corporate Computers IT was liquidated last March with debts of $1.4 million to the Australian Taxation Office.”
Brisbane MSP Tech Project in administration after growing too quickly
5 June 2017
CRN Net reports that “Brisbane-based IT provider Tech Project has entered voluntary administration after rapid growth squeezed its cash flow. The managed services provider, founded in 2012, offers IT services focused on small to medium businesses. Its chief executive, Jarrod Case, claimed on LinkedIn that the company services clients nationally with a staff count of about 120 following growth of more than 300 percent year-on-year. The MSP lists Microsoft, Dell, APC, Brocade, CheckPoint, Nimble Storage and NextDC as just a few of its vendor partners on its website.”
Wollongong IT solution provider Novo IT calls in the administrators
1 June 2017
CRN Net reports that “managed services provider Novo IT, formerly known as AVC, has entered into voluntary administration after 28 years in business. A first meeting of creditors is scheduled for 2 June. "The directors have indicated they intend to propose a Deed of Company Arrangement to creditors ahead of the second meeting of creditors, which will take place in July," according to the administrator.”
PRIMARY INDUSTRY
Queensland's third largest egg producer has gone into administration
9 June 2017
Business Insider reports that “Queensland’s third largest egg producer, Darling Downs Fresh Eggs, has been placed in voluntary administration. The administrators said it was too early to understand why they had been called in, but there had been problems with egg production. “It appears that the business has suffered from a number of serious events that have affected its capacity to produce eggs. In addition, efforts to rebuild the bird stock to a critical mass have not materialised in time to prevent the necessity for the voluntary administration.””
ENTERTAINMENT
Boris Becker declared bankrupt for failing to pay longstanding debt
22 June 2017
News.com.au reports that “Boris Becker has been declared bankrupt by a British court after the former tennis player failed to pay a longstanding debt. A lawyer for the six-time Grand Slam champion pleaded with a Bankruptcy Court registrar in London for a last chance to pay a debt that Becker has owed to private bankers Arbuthnot Latham & Co. since 2015.”
NOT FOR PROFIT
Children's charity Guardian Youth Care in administration
30 June 2017
The Sydney Morning Herald reports that “a children's care charity part-run by former Wallaby Glen Ella has been placed in administration after borrowing hundreds of thousands of dollars from companies with links to criminals. The board of Guardian Youth Care appointed the firm BRI Ferrier as administrator as the charity faced a funding cut-off and questions about its solvency. The charity's spending is under investigation by the Department of Family and Community Services, Fairfax Media revealed on Sunday. Directors of BRI Ferrier have indicated they would seek disputed funds from FACS to allow the charity to care for children in the short-term and to pay out several hundred thousand dollars in staff costs.”
ASIA
MANUFACTURING
Japan airbag giant Takata files for bankruptcy protection
26 June 2017
The Australian reports that “Takata has filed for bankruptcy protection in Japan and the US and said it would sell most of its operations to a rival, capping the steep decline of an 84-year-old Japanese company nearly nine years after it began a global recall of rupture-prone automotive airbags. At least 16 deaths and more than 180 injuries have been linked to the defect, which causes the airbags to explode with too much force and spray shrapnel into vehicle cabins. What began as a limited recall in some parts of the US in late 2008 expanded globally and would eventually grow to cover millions of vehicles. The recall of 42 million vehicles in the US is the largest ever.”
THE AMERICAS
GOVERNMENT
Trump administration banking plan signals regulation easing
14 June 2017
The Australian Financial Review reports that “the Trump administration’s new plan for bank oversight is raising industry expectations that a post-crisis era of heightened regulation is over. A report from the Treasury Department, released this week, contains dozens of specific recommendations that can be executed by financial regulators. Bankers and analysts said they expected the proposal would be a catalyst for changes to the Wall Street rule book once President Donald Trump’s banking-oversight nominees are confirmed.”
BUSINESS
'Soup Nazi' company files for bankruptcy
14 June 2017
News.com.au reports that “Soupman Inc, the company that licensed the name and recipes of the chef who inspired the tyrannical "Soup Nazi" character on the television comedy Seinfeld, has filed for bankruptcy. Last month Soupman's former chief financial officer, Robert Bertrand, was indicted for tax evasion after being charged with 20 counts of failing to pay Medicare, Social Security and federal income taxes. Based in Staten Island, New York, Soupman sells products under the Original SoupMan brand.”
EUROPE
BANKING
Italy is spending €17 billion to wind up 2 failing banks
26 June 2017
Business Insider reports that “the Italian government has set aside as much as €17 billion ($A25.1 billion) to help with the winding down of two collapsed regional lenders, Popolare di Vicenza and Veneto Banca. The two banks collapsed following numerous years of mismanagement and bad choices regarding lending, leaving the future of billions of euros worth of assets up in the air. However, after the government stepped in, the bank’s good assets will be transferred to the nation’s biggest retail bank, Intesa Sanpaolo. Italy’s government will pay €5.2 billion to Intesa, and give it guarantees of up to €12 billion so that it will take over the remains of Popolare di Vicenza and Veneto Banca, preventing a run on the banks. That figure is close to three times the expected rescue deal.”
GOVERNMENT
Greece strikes deal with creditors to avoid bankruptcy trauma
16 June 2017
ABC News reports that “Greece has avoided another potential brush with bankruptcy after striking a deal with European creditors to tide it over for the rest of the year. The country gained assurances that its repayment burden would be eased when it finally can stand on its own after almost a decade on financial life support. After months of haggling that raised fears of another escalation in Greece's near eight-year debt crisis, the 19-country eurozone agreed late Thursday (local time) to clear the release of a further 8.5 billion euros ($12.5 billion) after the Greek Government delivered on an array of reforms. Getting the money was becoming increasingly urgent as Greece has a big repayment hump next month.”
German ‘maritime royalty’ dethroned as Rickmers founders
5 June 2017
The Australian reports that “Germany’s third-largest shipping firm filed for insolvency on Friday after it was cut loose by one of the country’s biggest shipping lenders, a sign that Germany’s long-simmering shipping crisis has reached a boiling point. Rickmers Holding said lender HSH Nordbank backtracked on an understanding that it would restructure the company’s debt, forcing it to file for insolvency. HSH Nordbank said its board examined the Rickmers plans carefully before deciding they weren’t viable. Rickmers bondholders said they expected the firm’s owner, Bertram RC Rickmers, to “gut” the company’s assets.”