May 2018 News Digest – Business Insolvency and Turnaround

01 June 2018

The following are summaries of media stories related to business turnaround and insolvency in Australia during May 2018.


Property and Construction

Failed companies leave Hunter building subcontractors out of pocket

24 May 2018

The Newcastle Herald reports that “another two Hunter building companies have been placed in liquidation leaving dozens of subcontractors out of pocket. According to documents filed with the Australian Securities and Investments Commission, more than 35 unsecured subcontractors and suppliers, many from the Hunter, are believed to be owed more than $500,000.”

Perth subbies, creditors owed $2.4 million from collapsed builder

23 May 2018

WA Today reports that “a collapsed Perth builder owes subcontractors and creditors millions in unpaid debts.

Subiaco-based building contractor ArchiApps Pty Ltd was placed into liquidation last week, and it has since been revealed the company owes $2,456,614 in unpaid debts.”

Construction industry needs to build trust for subcontractors

22 May 2018

Mirage News reports that “a comprehensive review of the security of payment laws in the building and construction industry reveals more protection is needed for subcontractors. The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, says she supports the recommendations in the final report to improve consistency in the legislation and enhance protections. Change is needed to ensure subcontractors get paid on time for work they have done regardless of which state or territory they operate in.”

No impact on tenants, owners as real estate firm liquidated

22 May 2018

The Gladstone Observer reports that “tenants and property owners with Good Real Estate Gladstone have been reassured the company's liquidation last week will not impact them. Jeygar Investments, which trades as Good Real Estate Gladstone, was liquidated on Thursday after entering voluntary administration on April 11. “

Pacific Highway subcontractors owed $7.3 million after Ostwald Brothers company goes into liquidation

21 May 2018

ABC News reports “small business owners subcontracted to upgrade sections of the Pacific Highway in northern NSW say they have been left "emotionally devastated" after they weren't paid for work commissioned by the Government. Ostwald Brothers, the company contracted by the Roads and Maritime Service to upgrade the Ballina to Woolgoolga section of the highway, went into liquidation in late 2017.”

Couple had to uncover dodgy builder on own

16 May 2018

The Australian reports that “the failings of the NSW building regulator have been laid bare in an ombudsman's report after a couple left with a $528,000 repair bill uncovered a builder's dodgy past with a simple internet search.”

New name and new plans for Regetta Waters estate

9 May 2018

The Whitsunday Times reports that “Cannonvale’s overgrown and long-vacant roadside golf driving range will re-open when a national developer invests heavily into the neighbouring housing estate.”

Receivers sell coveted Brisbane mansion for $1.615m

8 May 2018 reports that “a Queensland highflying couple have had their luxury mansion seized by receivers and sold off for an incredible $1.615m.”


Clive Palmer moves to freeze Queensland nickel liquidator sale

14 May 2018

Australian Mining reports that “Clive Palmer, owner of Queensland Nickel’s liquidated Yabulu refinery, is trying to freeze an attempt by liquidators to sell the assets to PwC. The mining magnate believes the liquidator are attempting to avoid his claim (lodged in April) for $1.8 billion in damages.”

Former rich lister Peter Bond's Linc Energy fined $4.5m for environment damage

11 May 2018

The Australian Financial Review reports that “former rich lister Peter Bond's Linc Energy has been fined a record $4.5 million for serious environmental damage at its controversial underground coal gasification plant in the Darling Downs, west of Brisbane, but don't expect the fines to be paid.”

Administrators called in for Cleveland Mining

9 May 2018

Australian Mining reports that “beleaguered gold company Cleveland Mining has called in voluntary administrators due to the company’s financial troubles. The company was voluntarily suspended from ASX trading in October 2016 and has struggled to refinance its debts.”


Not a lot of ‘blue sky’ for Lenard’s Chicken

28 May, 2018

The Australian reports that “as Blue Sky Alternative Investments moves to recover from its share price fallout and profit downgrade of late, one of the businesses it has interests in, which may not face a turnaround any time soon is Lenard’s Chicken. The group has been working with Ferrier Hodgson to improve the business.”

Coast company to rescue after major retailer collapses

24 May 2018

Sunshine Coast Daily reports that “a coast business has come to the rescue of disgruntled Babies R Us customers who were left high and dry after the shock closure of the retail giant this week. Ankalia, a successful Australian owned, designer baby carrier business based on the Coast, are allowing Babies R Us gift card holders to redeem them in their store.”

Myer Amps Up Leadership Team With UK Hire

24 May 2018

Channel News reports that “with Myer’s new CEO taking the reins early June, the department store has been shuffling its executive positions with a new chief merchandising officer, Allan Winstanley. Winstanley has worked with Myer’s new CEO John King at UK retailer House of Fraser between 2006 and 2014 with Myer stating they were both ‘part of the store’s successful turnaround’.”

Fair Trading NSW provides options for Toys R Us customers

24 May 2018

The Daily Telegraph reports that “Toys R Us customers with valid gift cards, or goods held under deposit, are being updated on their options after the company was placed into administration.”

More consolidation on the way, as NSW shoe retailer Shoe Box collapses into liquidation

24 May 2018

SmartCompany reports that “heightened online competition and “a retail sector verging on recession” have caused a chain of shoe stores to collapse into liquidation, as the sector braces for even more consolidation.

NSW-based Shoe Box operated five stores across Sydney and employed 14 staff members, who will all be paid their entitlements, according to liquidator Paul Gidley.”

Former Pie Face franchisee left with nothing following business collapse

23 May 2018 reports that “a former Pie Face franchisee who lost everything has delivered an emotional testimony at the banking royal commission. Marion Messih on Tuesday told the commission she had bought a Pie Face franchise with her brother and sister-in-law in Werribee in Victoria for $330,000 in 2013.”

The Daily Edited co-founder Alyce Tran on what it’s like when your investor collapses

21 May 2018

SmartCompany reports that “in March 2017, leather goods brand The Daily Edited (TDE) sold a 30% stake to embattled handbag retailer Oroton for $4.5 million. Earlier this month, the founders bought that stake back for $2.21 million. On paper, it looks like founders Alyce Tran and Tania Liu have managed to secure a very good financial outcome for their business.”

Online sales squeeze retail margins, Citi warns

17 May 2018

The Australian reports that “retailers would be better served by focusing on bricks-and-mortar stores instead of chasing online sales that crimp their margins, Citi research shows. Online sales tend to cannibalise in-store transactions rather than add revenue for the ­retailer, Citi warns in a note titled “The trouble with e-commerce”.”

Aussie Farmers Direct customer database bought by YourGrocer

14 May 2018

Canstar Blue reports that “the Aussie Farmers Direct brand looks set to live on, despite the company going into voluntary administration and closing down two months ago. The online grocery store ceased operation in March, citing fierce competition from supermarket rivals Coles and Woolworths as a contributing factor.”

How Aussie furniture icon Matt Blatt nearly went bankrupt

14 May 2018 reports that “in the year 2000, furniture company Matt Blatt was seriously struggling. Today, the brand is an Aussie icon — but at the turn of the century, it was a very different story. At the time, owners Adam and Deborah Drexler were manufacturing pieces, but failing to compete with similar Chinese products on the market.”

The Daily Edited buys back 30pc stake from Oroton for $2.3m profit

11 May 2018

The Sydney Morning Herald reports that “Alyce Tran, co-founder of accessories brand The Daily Edited, said buying back the 30 per cent stake her brand sold to Oroton a year ago feels "bittersweet". "We have a lot of respect for the Oroton brand," Tran said on Friday. "We had a very educational year with them. They added a layer of governance to our business we didn't have before."”

'The model is flawed': Endota Spa franchisee left bankrupt

11 May 2018

The Sydney Morning Herald reports that “Fran Forde owned and operated two Endota Spa franchises in the coastal town of Torquay, but her life fell apart when her franchises were terminated. “I am now bankrupt, I had to sell my house, a business loan of $250,000 had to be paid out, I had to pull my kids out of their school,” she told Fairfax Media.”

Australian fashion brand Metalicus enters voluntary administration

10 May 2018

SmartCompany reports that “Australian fashion brand Metalicus has entered voluntary administration and will today begin a major sale across all of its outlets. In an email to customers on Wednesday evening, the company acknowledged the “difficult period for our staff and customers”, as it explained plans to launch a sale event at all of its flagship stores, Myer concession outlets and online, starting Friday.”

Dirty birds: Red Rooster, Oporto franchisees on 'verge of bankruptcy'

3 May 2018

The Sydney Morning Herald reports that “many Red Rooster, Oporto and Chicken Treats store owners claim they are being pushed to the verge of bankruptcy as high costs and operating restrictions are forced on them by the company which controls the chains.”

Tourism and Hospitality

Port Hinchinbrook Resort's future back in limbo as legal challenge looms

16 May 2018

ABC News reports that “the future of the troubled Port Hinchinbrook Resort in north Queensland has been thrown back into uncertainty with Oakland Investment Group flagging it will lodge an appeal against a court decision giving ownership to a rival creditor.”

Cessnock Golf Club goes into voluntary administration with debts of more than $10m

14 May 2018

The Newcastle Herald reports that “a voluntary administrator has been called in to take control of the financially troubled Cessnock Golf Club as it struggles under the weight of more than $11 million debt.”


NBN Co details 2019 business satellite service launch

22 May 2018

ARN reports that “NBN Co has revealed the details of its new wholesale business-grade satellite service for remote and rural Australia, set to be launched in the first half of 2019. According to the company behind the rollout of Australia’s National Broadband Network (NBN), the new service will be available in areas where coverage may have been limited or non-existent and there was no option of a fixed line service.”


Software supplier to Jetstar, Tigerair goes bust owing $2.6m

28 May 2018

CRN reports that “the directors of failed Australian travel software vendor Matchbyte are hoping to revive the company after the loss of key customers pushed it over the edge.”

Fantasy sports platform PlayUp to acquire fourth gaming business

15 May 2018

Finfeed reports that “Australian online gaming and DFS firm PlayUp is racking up the acquisitions prior to its dual listing on the NASDAQ and the ASX via a reverse takeover of Mission NewEnergy Limited (ASX:MBT | OTC:MNELF). The company plans to raise $US40 million ($51.5 million) through the reverse listing on the ASX and deliver “the world’s first fully-integrated, blockchain enabled global fantasy sports, online sports betting & gaming ecosystem”.”

Videology bankruptcy won't impact Australia

11 May 2018

AdNews reports that “ad tech business Videology has filed for chapter 11 bankruptcy protection, with Singtel-owned Amobee set to buy the business. Despite the moves, local MD of Videology Chris Mooney says the filing won't impact the Australian business and the services it provides to clients and partners.”

Australian tablet publishing pioneer Mogeneration goes into liquidation

11 May 2018

Mumbrella reports that “early Australian leader in tablet development, Mogeneration, has gone into liquidation, Mumbrella has learned. The company, which once counted ACP Magazines, The Australian, PwC and Mumbrella among its clients was founded in 2008 by former News Corporations employees Keith Ahern and Tom Adams.”

Regional telco Field Solutions Holdings steps up Queensland wireless play

9 May 2018

ARN reports that “The contract for the new infrastructure is worth around $850,000 of revenue over three years. Rural and regional telecommunications carrier Field Solutions Holdings (ASX:FSG) is boosting its Queensland footprint with the construction of new infrastructure in the state’s central region.”

Cambridge Analytica: Scepticism over data firm's claim it is bankrupt, shutting down

3 May 2018

ABC News reports that “the head of the British parliamentary committee investigating Cambridge Analytica has expressed scepticism at the data-mining company's claim that it is shutting down.”


Date set for Calliope medical centre re-opening

9 May 2018

The Observer reports that “the Calliope Medical Centre will re-open its doors next Monday, as a branch of the Gladstone GP Superclinic.”


Big Un investors turn dark after 'life changing' losses

23 May 2018

The Australian Financial Review reports that “"Think Big" was the catch-cry of the legion of individual shareholders – from inner city Melbourne to the suburbs of Perth – who logged on to online forums to enthuse about the bright future of their favourite stock: Big Un Limited.”

Is Australian Retail Doomed?

5 May 2018

Markets & Money reports that “everything is down, down, down in Australian retail.  It’s 50% off here, closing down sale there. And the news seems to be filled with company statements to the tune of ‘we just couldn’t hack it here’. Overall, the retail landscape has never looked bleaker.”

Will Tesla Be Bankrupt In 18 Months?

10 May 2018

Money Morning reports that “it’s with great sadness we report that Tesla Inc. is no longer a going concern. After reviewing their books, it’s clear there’s no money. Even after selling off the immense physical assets there’s just not enough to pay back the debt.”

The ‘bizarre’ conference call with Elon Musk that just cost Tesla $2.6b

4 May 2018

The West Australian reports that “Elon Musk’s quirky behaviour has long been chalked up to that of a misunderstood genius. But never have his actions caused so much angst on Wall Street.”

Gold explorer Bounty takes on a new identity for $18m IPO

3 May 2018

Stockhead reports that “former gold explorer Bounty Mining is reinventing itself as a coking coal explorer — and is working on an $18 million plan to rejoin the ASX. Then known as Ausmet, the company listed on the ASX in 2004 as a gold, nickel and copper explorer in Western Australia and the Northern Territory.”

Small Business

Picton calls in administrators

24 May 2018

ProPrint reports that “Perth based Picton Press has entered voluntary administration, owing $1.3m to the ATO and an estimated further $700,000 to $800,000 to trade creditors. The ATO sought a winding up order against the business.”

Chameleon sinks, new company rises

22 May 2018

ProPrint reports that “Krico, parent company of Queensland print outfit Chameleon Group is in liquidation, but a new company Chameleon Group Australia Pty Ltd is now trading. The sole owner of the new company is Emma Van Der Pluym, the long-term partner of Chameleon Group CEO and banned company director Chris Krieger, who is the son of the owner of Krico, Kevin Krieger.”

MYOB and BPAY join forces to speed up small business payments

15 May 2018

Mozo reports that “running your own cafe, florist, butcher or boutique fashion store can be stressful enough without having to worry about being paid on-time. So, to take the stress out of small business, MYOB and BPAY have today announced a partnership that will speed up your payments.”

Accountancy firm liquidated due to $255k ATO debt

9 May 2018

The Gladstone Observer reports that “Gladstone accounting firm Corporate Accountants has been wound up because it owes a quarter of a million dollars to the Australian Taxation Office.”


Bank crushes family business by doubling repayments

23 May 2018

The New Daily reports that “the Bank of Queensland doubled the monthly repayments on a business loan without telling a franchisee couple, forcing their business into liquidation, the financial services royal commission has heard.”

Fair Work Ombudsman action sees underpaying boss sentenced to 12 months' jail

13 May 2018

The Australian Financial Review reports that “the director of a Queensland tour company that underpaid visa workers has been jailed in a landmark contempt of court case brought by the Fair Work Ombudsman. The Federal Circuit Court on Thursday sentenced Trek North Tours owner operator, Leigh Alan Jorgensen, to 12 months' prison and fined him $84,956 after finding he breached freezing orders by transferring company funds into a trust before back paying workers.”

McKinsey sued over ‘conflicts of interest’ in bankruptcy work

10 May 2018

The Australian Financial Review reports that “strategy consulting firm McKinsey is being pursued for more than $US100 million ($134 million) in damages by a prominent US corporate restructuring specialist who has accused the consulting giant of failing to disclose conflicts of interest when competing for bankruptcy clients.”

Not For Profit

Historic Royal Queensland Aero Club returns to Hinkler-era history

18 May 2018

The Australian reports that “when one of the world’s oldest aero clubs, the Royal Queensland Aero Club, went into voluntary administration in 2016, it sent ripples through aviation enthusiasts. This was the club whose members included early aviator Queenslanders “Australian lone eagle” Bert Hinkler and Charles Kingsford Smith.”

Primary Industry

Pending US forced liquidation a headache for Australian beef

10 May 2018

Queensland Country Life reports that “the premium which United States beef is currently commanding over imported Australian lean trim could well cause some big headaches to both countries as the year progresses.”

Herb farm Freshzest goes into administration putting jobs in limbo

3 May 2018

ABC News reports that “a herb farm which supplies and packs herbs for major supermarkets has gone into voluntary administration. Freshzest and affiliated company Spicezest were placed into administration by director and owner Robert Hayes last month, putting 60 jobs at risk and leaving more than 100 other creditors out of pocket.”


Banking Royal Commission told Bankwest 'cash grab' sent Hobart businessman bankrupt

29 May 2018

ABC News reports that “Tasmanian hotel developer Michael Doherty has told the banking royal commission crippling fees charged by Bankwest helped bring down his business. In 2009, Mr Doherty borrowed heavily from Bankwest for a $67 million redevelopment of the historic Hadley’s Hotel in Hobart and an adjoining development.”

The rug pulled out from under you’: How CBA dissected Bankwest's business loans

29 May 2018

The Sydney Morning Herald reports that “Brendan Stanford was overcome by emotion when asked to describe to the royal commission the impact of Bankwest putting the pub he owned with his brother into receivership. "It takes its toll," he said. "To see all the work that you have done in that period, to just have the rug pulled out from under you". Mr Stanford and his brother had bought the pub for $1.6 million but in the end, it was sold for $525,000 when their loan was reassessed by the Commonwealth Bank after it bought Bankwest.”

Discharged bankrupt and former Nationals candidate to be given millions to develop plan for rail link

21 May 2018

The Australian reports that “businessman to be given millions in taxpayer funds to help him realise his dream for a fast-rail link between Melbourne and Sydney is a discharged bankrupt and former Nationals candidate, Senate Estimates has heard.”


Bankrupt education providers fail students

22 May 2018

Liverpool City Champion reports that “NSW Labor leader Luke Foley and Labor candidate for Holsworthy Charishma Kaliyanda met with students at Miller TAFE two weeks ago to discuss the impact of undertaking private vocational education programs which they were never able to complete.”

Sports training academy offering 'rip-off' courses collapses owing $5 million

17 May 2018

WA Today reports that “a sports training academy has collapsed with debts of more than $5 million after running courses costing up to $23,000 that qualified its students "for nothing". FC 11, which billed itself as “Australia’s leading sports education provider” and had links to some of the nation's biggest sporting clubs, also faces claims it traded while insolvent.”


RCM Touring facing liquidation following non-payment to Big Deal Touring

24 May 2018

The Industry Observer reports that “an application for liquidation has been lodged to the Federal Court of Australia by Sydney touring company Big Deal Touring, who allege that Melbourne’s RCM Touring have failed to pay them on numerous occasions.”

Big Review TV calls in administrators

23 May 2018

The Australian Financial Review reports that “video and TV platform Big Review TV has plunged into administration, capping off a huge fall from grace for one of 2017’s hottest technology stocks. The ASX-listed Big Un announced yesterday that its wholly owned subsidiary Big Review TV had been placed into voluntary administration, with its CEO Richard Evertz stepping down, effective immediately.”

Perth’s Fringe World to take legal action over unpaid artists

3 May 2018

The Australian reports that “Perth’s Fringe World says it will take legal action to try and claw back funds for artists left unpaid by an event management company that presented shows under the banner of 2018 Fringe World earlier this year.”

A-League applauded for keeping its word to regional Australia

2 May 2018

The Newcastle Herald reports that “who would’ve thought regional Australia would be hanging a gold medal around the figurative neck of the A-League? It wasn’t that long ago – in 2015 – that football’s governing body terminated the Jets' A-League licence after owner Nathan Tinkler put the club in voluntary administration. That’s low.“

North America


Iconic guitar maker Gibson files for bankruptcy protection

2 May 2018

ABC News reports that “the maker of the Gibson guitar is filing for bankruptcy protection after wrestling for years with debt. The company, founded in 1894 and based in Nashville, Tennessee, has been esteemed by generations of guitar legends including Chuck Berry and BB King.”


Avaya wants to “energise” partner ecosystem post-bankruptcy

29 May 2018

ARN reports that “Avaya is looking to “energise” its existing partner ecosystem while establishing at least some new relationships to plug potential gaps in its existing footprint, according to the company’s vice president for channels Fadi Moubarak.”


Judge awards investors $3.2bn in Lehman Brothers claim

9 May 2018

The Australian reports that “Lehman Brothers caused $US2.4 billion ($3.2bn) in damages to investors holding securities backed by shaky home mortgages, a New York bankruptcy judge has ruled, ending one of the last remaining disputes in the defunct bank’s nearly decade-long liquidation.”



Norske Skog finally gets a new owner

4 May 2018

News in English reports that “after years of debt crisis, bankruptcy and a four-month-long bidding process, a London-based hedge fund has finally emerged as the new owner of the Oslo-based forest products firm Norske Skog. The hedge fund Oceanwood promises to protect and nurture the company’s profitable operations, while an unsuccessful Norwegian bidder was wishing them good luck.”


When Will Loss-Maker Duro Felguera SA. (BME:MDF) Need More Cash?

14 May 2018

Simply Wall Street reports that “trailing twelve-month data shows us that Duro Felguera SA.’s (BME:MDF) earnings loss has accumulated to -€254.50M. Although some investors expected this, their belief in the path to profitability for Duro Felguera may be wavering. The single most important question to ask when you’re investing in a loss-making company is – will they need to raise cash again, and if so, when?”