October 2018 Business Restructuring, Turnaround and Insolvency News Digest
01 November 2018
The following are summaries of media stories related to business restructuring, turnaround and insolvency in Australia during October 2018.
Australia
Property and Construction
Prestige property agent charged with $3.6 million fraud
28 October 2018
The Sydney Morning Herald reports that “a real estate agent specialising in luxury properties with high-profile owners, including fashion designer Collette Dinnigan, has been charged with 15 fraud offences after she allegedly misused $3.69 million which was placed into her agency's trust account by various clients over the course of two years.”
Building watchdog contributes to Cullen Group investigation
26 October 2018
The Australian reports that “Queensland’s building watchdog today announced a significant monetary contribution to the investigation into the collapse of two construction companies that left over 500 creditors owed more than $18 million.”
Federal court orders liquidation of SA home builder
25 October 2018
In Daily reports that “a South Australian home builder will be liquidated by court order after losing its construction licence and failing to pay concrete and steel contractors.”
Perth Children’s Hospital subcontractor highlights unfair contracts
24 October 2018
The West Australian reports that “one of the Perth Children’s Hospital subcontractors who went into liquidation has highlighted how unfair contracts contribute to exploitation of subcontractors.”
REVEALED: JMK cashflow concerns months before collapse
23 October 2018
The Queensland Times reports that “JM Kelly Group, one of the region's biggest building firms, announced on Wednesday, October 17 it would go into voluntary administration.”
Subcontractors pay price for Main Roads ‘savings’
20 October 2018
The West Australian reports that “subcontractors WA chairwoman Louise Stewart has blasted Main Roads WA’s “savings” on multimillion-dollar infrastructure projects, saying taxpayers are picking up the tab, plus the extra cost of collapses, job losses, unpaid bills and anguish.”
Hundreds of jobs lost as major central Queensland building company JM Kelly collapses
17 October 2018
ABC News reports that “devastated workers have lost their jobs and a building site has been abandoned after a major central Queensland building company went into administration. Administrators have confirmed that JM Kelly Group has gone into voluntary administration and eight of its sub-companies are being liquidated.”
WA woman banned from financial services
17 October 2018
Nine News reports that “a former finance manager who stole almost $1.15 million from a Perth construction company to fund her lavish lifestyle has been permanently banned from providing financial services and credit activities.”
Mining
No laughs, just more of that old sinking feeling
16 October 2018
The Australian reports that “if anyone else had appointed a fugitive from justice to rebuild the Titanic, it would rightly be viewed as an enormous joke. But there is nothing remotely funny about Clive Palmer and his latest jape — just as there is nothing amusing about leaving taxpayers and 800 Queensland Nickel workers in the lurch for more than $200 million.”
NSW coal mine collapses into insolvency as Trevor St Baker circles
4 October 2018
The Australian Financial Review reports that “NSW coal mine Chain Valley Colliery, a key supplier to the Vales Point power station, has collapsed into administration, with Vales owner Delta Electricity immediately emerging as a prime candidate to buy the troubled operation to safeguard its cut-price deliveries of coal.”
Retail
Topshop owner named despite gag in harassment case
26 October 2018
The Australian reports that “a British politician used parliamentary privilege to identify Topshop owner Philip Green as the businessman accused of sexual harassment who had secured a court order barring the media from revealing his identity.”
Max Brenner sale could go ahead despite receivers appointment
22 October 2018
The Sydney Morning Herald reports that “a sale of the surviving Max Brenner stores could still go ahead despite the appointment of receivers late last week. “The liquidators are in control of the business and we have a watching brief really,” said Ferrier Hodgson’s Peter Gothard.”
'Marked down to clear': Roger David collapses into administration
18 October 2018
The Sydney Morning Herald reports that “menswear chain Roger David will embark on an immediate national closing down sale after being placed in voluntary administration.”
Why Sears bankruptcy will be bad for J.C. Penney
17 October 2018
Yahoo Finance reports that “struggling J.C. Penney (JCP) best brace for an avalanche that has been set in motion by the death of longtime foe Sears.”
‘In danger of the same fate’: What Myer can learn from Sears going bankrupt
16 October 2018
The New Daily reports that “bankrupt US retail giant Sears’ downward profit spiral has been likened to that of Myer department stores, with retail experts claiming the Australian chain should learn from Sears to avoid the same mistakes. Department store chain Sears announced on Tuesday it has filed for bankruptcy and will be closing 142 unprofitable or underperforming stores.”
14 October 2018
The Daily Telegraph reports that “on the floor of the boutique owned by her grandma, Sophie Holt was struck by the fashion bug. “I remember the early days in the workroom as a really small child,” she tells Stellar. “My grandmother [Dame Zara Holt] started the fashion brand Magg in the 1950s, and the shop became this Melbourne institution.”
12 October 2018
Business Insider reports that “a massive toy store is set to open in Bankstown, in Sydney’s west, in a former Toys ‘R’ Us location, just months after the company went into liquidation and closed all 44 Australian stores.”
Dick Smith liquidators accuse Synnex of preferential payments
11 October 2018
CRN reports that “Synnex has been dragged back into the seemingly never-ending fallout around failed electronics retailer Dick Smith's collapse in 2016.”
Costco abandons plan to purchase piece of former Pasminco lead smelter site for Lake Macquarie store
10 October 2018
The Newcastle Herald reports that “retail giant Costco has scrapped plans for a store at the former Pasminco site. Sources with knowledge of Costco’s plan to buy land from administrator Ferrier Hodgson told the Newcastle Herald on Tuesday the bulk retailer had walked away from the trading table.”
Farmer Feld's calls for community support
10 October 2018
Goulburn Post reports that “well-known Goulburn business Farmer Feld’s has entered into voluntary administration this week. For over eight years the business has been selling quality fruit, meat and vegetables to local customers.”
After almost 70 years, Lygon Food Store goes into administration
9 October 2018
The Age reports that “in its heyday, crowds lining up at the bustling Lygon Food Store would spill out onto the street each Saturday morning. But 66 years after the Carlton institution opened its doors, rising costs, increased competition and dwindling sales are believed to have led to its demise.”
8 October 2018
SmartCompany reports that “award-winning pastry chef Pierrick Boyer has been forced to place his recently opened Melbourne cafe into voluntary administration, blaming adjacent construction work for the downfall of his business.”
Is Toys ‘R’ Us Staging a Comeback?
4 October 2018
Power Retail reports that “following in the footsteps of its American and UK counterparts, Toys ‘R’ Us fell into voluntary administration in May this year. After failing to find a buyer for its Australian operations, the company’s local online store went offline, followed by the closure of its 44 toys and baby goods stores across the country.”
Tourism and Hospitality
Another Perth restaurant bites the dust as Butcher's Arms calls last drinks
24 October 2018
The Sydney Morning Herald reports that “The Butcher's Arms on St George's Terrace closed its doors on Monday, with owner Scott Taylor saying it was time to "humbly and quietly bow out".”
Venture Far, previously Venture Holidays, has gone into liquidation after 39 years in the industry
23 October 2018
Travel World reports that “in a statement, the company cited the “costs and challenges” of running the business as the reason for ceasing operations.”
Foodora had an 'interest' in delivery riders promoting company logo
10 October 2018
The Sydney Morning Herald reports that “a former senior manager for Foodora has conceded the company had an interest in promoting its brand through the use of the company logo on T-shirts and bags used by food delivery riders.”
Community Club to be placed on market
2 October 2018
The Border Watch reports that “the embattled Millicent and District Community Club precinct is set to go on the market next month.”
Mosman Rowers club given a new lease of life by RMS
1 October 2018
The Daily Telegraph reports that “Mosman Rowers is on the brink of resurrection after a breakthrough in talks with the Roads and Maritime Services. The club, a feature of Mosman Bay since 1911, went into voluntary administration in May with debts of more than $500,000.”
Technology
Unlockd files for bankruptcy in US, blames Google
30 October 2018
The Australian reports that “the developer of Unlockd, a mobile app that sends targeted ads to users when they open their smartphones, has filed for bankruptcy in New York as it hunts for financiers to fund litigation against Google, which the start-up blames for its demise.”
Service provider enters liquidation following Access4 winding up application
17 October 2018
ARN reports that “Ballarat-based Ezy IT Australia has entered into liquidation after an order by the Supreme Court of Victoria on 3 October.”
17 October 2018
SmartCompany reports that “a Perth-based startup that received over $65 million from investors has been placed into liquidation with just $50,000 left in the bank, with a Federal Court judge haranguing the company for having an app that “does not work”.”
Investment
Wolf Minerals ceases trading in London after UK subsidiary enters voluntary administration
10 October 2018
Proactive Investors Australia reports that “Wolf Minerals has ceased trading on London's junior market AIM effective immediately.”
Small business
Kontented unable to pay back $300,000 government loan
29 October 2018
Ad News reports that “content agency Kontented is unlikely to repay the $300,000 startup loan issued by the NSW Government with the business entering into liquidation, according to the deputy premier of NSW.”
Ultimate Campers received $20,000 government grant in June
15 October 2018
Bay Post/Moruya Examiner reports that “Moruya business Ultimate Campers was achieving Department of Infrastructure milestones as late as June 2018, despite going into voluntary administration on October 10.”
Shark Tank's 'biggest deal' company gets scathing administrator's report
8 October 2018
The Australian Financial Review reports that “both directors of the company offered a record $2.5 million on Network Ten's Shark Tank last year could have breached their duties under the Corporations Act, its administrator has found.”
Legal
Bankrupt businessman living on luxury yacht after leaving $100m mess in community
25 October 2018
Nine News reports that “residents are furious after a businessman living on a 28-metre yacht left a $100m mess in their neighbourhood after going bankrupt. David McAuliffe owned a tip in Victoria's Lara, north of Geelong, near residential homes and a school.”
Perth woman jailed for $1.2 million theft
25 October 2018
The Australian reports that “a woman who stole a total of more than $1.2 million from two separate small businesses because she "liked having nice things" has been sentenced to six years and two months in a West Australian prison.”
Education
AGB training goes into administration
18 October 2018
Bay 93.9 reports that “students at AGB training in Geelong are being assured classes are running as usual, despite the business going into insolvency.”
Energy
Taxpayers and not failed Queensland companies responsible for future clean-up costs
15 October 2018
Courier Mail reports that “taxpayer and not failed Queensland companies are responsible for future clean up costs of environmental disasters, a recent court case has ruled.”...
Entertainment
Desperate SOS issued to save Balmain Tigers
30 October 2018
The Sydney Morning Herald reports that “Wests Tigers and Wests Ashfield have been urged to rescue the Balmain Leagues Club (BLC) to ensure 110-year-old foundation club Balmain can remain a viable part of the NRL joint venture. The BLC was placed into voluntary administration last week and there are fears Balmain could soon follow suit after losing their only genuine source of income.”
'Great shame': Italo Australian club in liquidation
25 October 2018
Brisbane Times reports that “the closing of Canberra's Italian club is a sign of the struggles facing ethnic clubs in the capital, the club secretary said. Italo Australian club secretary Gary Kent said the club had accumulated serious debts over the years, unhelped by dwindling patronage and poor investments in the decades before.”
Not For Profit
Disability services company Endeavour Industries' collapse leaves workers without homes, jobs
26 October 2018
ABC News reports that “workers and residents of collapsed Hunter Valley disability services company Endeavour Industries are distraught over the loss of their home, community and livelihood.”
Hunter Valley Miss Muddy charity fun-run cancelled as organisers go into liquidation
13 October 2018
The Newcastle Herald reports that “a Mayfield East woman says she feels “ripped off” after a charity run scheduled at Hope Estate was cancelled after organisers went into liquidation.”
Wurundjeri Given Full Control Of Galeena Beek Properties
9 October 2018
Mirage News reports that “the Andrews Labor Government has given full control of three properties in Healesville to the Traditional Owners, the Wurundjeri. Minister for Aboriginal Affairs Natalie Hutchins visited the Wurundjeri Tribe Land and Compensation Cultural Heritage Council today to give them full control and ownership the properties, which were used by the Galeena Beek Aboriginal Organisation.”
World
North America
Retail
Toys R Us' demise is having a devastating effect on America's largest toy companies
23 October 2018
Business Insider reports that “it’s a tough time to be in the toy industry. America’s two largest toy makers, Hasbro and Mattel, aren’t doing so well in the wake of Toys R Us’ bankruptcy.”
Mattress Firm has filed for bankruptcy and could close up to 700 stores
5 October 2018
Business Insider reports: “Mattress Firm has filed for Chapter 11 bankruptcy protection, it said in a press release Friday. With an estimated 3,272 stores, according to Wedbush analyst Seth Basham, it is the largest specialty mattress retailer in the US and has increasingly come under pressure as startups such as Casper innovate the experience of mattress shopping and take market share.”
Entertainment
Gibson officially saved from bankruptcy as former CEO exits
4 October 2018
The Industry Observer reports that “iconic guitar manufacturers Gibson are set to live on into the foreseeable future, with their plans to avoid bankruptcy being formally approved.”
Manufacturing
24 October 2018
Business Insider Australia reports that “General Motors’ president, Dan Ammann, is a bundle of reconciled contradictions. When he laughs, it’s like Santa Claus has come to town. When he thinks, the pauses are intense. When he makes a joke or offers a wry observation, his wit is extra dry.”
Europe
Manufacturing
Italy's classic moka pot maker at risk of extinction
29 October 2018
The Sydney Morning Herald reports that “for decades, millions of Italians at home and abroad have started their morning ritual waiting for the telltale bubbling sound that signalled the moka pot was brimming with a strong brew of coffee. But the original moka - a fixture in Italian homes and an icon of Italian design since it was introduced by Alfonso Bialetti in 1933 - is at risk of extinction as its maker struggles against bankruptcy amid a difficult Italian economy and fierce competition from hi-tech coffee pod machines.”
Transport
3 cancellations and a bankruptcy: Adventures of a $292 round trip ticket to Paris
4 October 2018
Yahoo 7 reports that “it’s tough to click on anything other than the $300 option when you are booking a round-trip flight to Paris, especially when there are $900 options down the page. But it’s also tough to see a tweet that says “AIRLINE CEASES OPERATIONS,” and realize that you now have a one-way ticket instead of a round-trip."”
Bavaria bringing it all back home
23 October 2018
Marine Business reports that “as it embarks on its next phase under new ownership, German boat builder Bavaria Yachts has announced it is consolidating production at its German base in Giebelstadt and cutting the number of models in its line-up.”