by Allison Menzies

Following an expose presented by Four Corners, the ATO has been forced to defend itself against allegations of bullying towards small and medium enterprises, which some business owners claim has placed them not only in emotional, but financial distress. The ATO has vehemently denied these claims, insisting that the stories uncovered in the Four Corners investigation are representative of none but a small minority of SME disputes.

Allegations of the ATO’s inappropriate conduct to meet revenue targets include a whistle-blower’s recount of how instructions were given to Tax Office staff to issue garnishee notices over taxpayers who had been assessed as owing the ATO money, without prior assessment of their personal circumstances. These garnishee notices often result in recurring payments from a taxpayer’s bank account, whenever money available. Often these transactions leave businesses without sufficient funds to pay wages or meet other financial obligations.

Fund Options (Australia) Pty Limited
ACN 603 782 903
(In Liquidation) ("the Company")

On 15 May 2015, David Iannuzzi was appointed Liquidator of the Company.

As a result of the investigations undertaken by the Liquidator, it has been discovered that the Company was apparently trading binary options online using a platform called “BancDe Options” from a Hong Kong based website and a platform called “Options Rider” from a New Zealand based website.

These websites served as a global marketplace / platform for “investors” who wished to trade binary options over stocks or currencies.  The business of the Company is suspected to have been a Ponzi scheme.

Edition 14The Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

As 2018 comes to close our final edition for the year takes a look at the current Real Estate market as well what is happening with Insolvency Law in China.  We also look at what ASIC are doing with regards to directors' obligations and the hottest topic currently in business 'illegal phoenixing'.

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

by Adam Raciti

Throughout 2018, we have seen a number of corporate collapses, most notably in the retail industry with well-known brands such as the Sussan Group, Roger David, Toys ‘R’ Us, TopShop, and Allphones all succumbing to the financial pressures that come with the industry. No doubt, others in the retail industry must be questioning whether they are next and how to prevent the same occurring.

The good retail operator stays ahead of other operators in terms of customer engagement with the use of social media, drive and connectivity to ensure their product is imbedded in the minds of potential customers. However, what is equally important is servicing their existing customer base. As the old saying goes, “regulars are the bloodline of any business”.

by Alexandra Caicedo

Small businesses make an important contribution to the Australian economy.  They account for the vast majority of the active private businesses in the country and represent a large share of employment and value added to everyday spending.

However, small businesses face many operational challenges and, as a consequence, typically have higher failure rates than larger businesses.

by Paul Fury

In August 2018, the Federal Government released for public comment draft legislation aimed at combating illegal phoenixing activity. However, even if enacted, it is questionable if the proposed legislation will have a great deal of effect.

A longstanding difficulty with illegal phoenixing is that the term is not defined either in the Corporations Act or by case law. However, it is broadly understood to mean the transfer of the assets of an insolvent company to a new entity with the company being left as just an indebted shell.

The draft legislation does not address this definition issue. Instead, it introduces in proposed section 588FDB of the Corporations Act the new concept of a “creditor-defeating disposition”. This term is central to the proposed legislation.

HootersLogoFollowing the conclusion of a nationwide sale campaign, the current director and existing management will retain control of the Hooters Group following the outcome of the most recent meeting of creditors held on 19 October 2018. Existing management submitted a DOCA proposal that was accepted by creditors of the Hooters Group which will see the business continue including the perseveration of its workforce.

In simple terms and in this case, a “DOCA” is effectively a binding arrangement with creditors, the company and its director personally.

by Allan Ly

Following Hon. James Peck’s key-note address as to the “Lessons from Lehman Brothers Collapse” at the ARITA Conference, my mind turned to the question of what may be lurking beyond, being economic uncertainty.

When the GFC befell us, I was still in my younger years in amongst the uproar when the fourth-largest investment bank in the U.S. collapsed with $600bn in assets and $1.2trillion in creditor liabilities, a number which a majority of us cannot fathom.

Edition 13The Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

In this edition we take a look at solutions for business survival, an alternative method for a company to list on the ASX and a look at the government's crackdown on the black economy.

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

by Roslyn Cossins

According to figures recently reported by ATO staff at a forum for insolvency practitioners, the Deputy Commissioner of Taxation (“DCT”) has over 52,600 insolvency accounts with a combined debt of over $7.2 billion. It is no surprise, therefore, and especially to those who work within the insolvency industry, that the DCT is arguably Australia’s largest unsecured creditor.

So how does the DCT approach insolvency, and how can insolvency practitioners work with the ATO to achieve the best outcome for all stakeholders?

HootersLogoThe Group’s Administrators advise that Expressions of Interest (EOI) to purchase Hooters has now closed. There are a handful of genuine parties that the Administrators are currently liaising with.

“The EOI process allows for a fair process to consider a potential rescue plan for the Group i.e. a Deed of Company Arrangement proposal from the Director versus engaging with new owners or management in order to continue the Hooters brand in Australia.” said the Group’s Administrator David Iannuzzi of Veritas Advisory.

The Administrators are continuing to work closely with Hooters of America, LLC and are using their best endeavours to ensure that the Hooters brand continues down under.

A meeting of creditors has been scheduled for 29 August 2018 where the future of the brand will be discussed further with creditors in attendance. It is expected this meeting will be adjourned to allow creditors more time to fully consider their options.

by Roer Jimenez

Debt is a four-letter word we tend to easily avoid personally or for business. From a business perspective avoiding it may not always be the best way to achieve consistent cash flow.

So, are all debts equal?

Some debt can actually help grow your business. Rather than labelling all debt as “bad,” there are a few simple ways to recognise which debts are good, bad, or ugly.

by Cameron Lee

CPA Australia recently conducted its eighth annual Asia-Pacific Small Business Survey where it found that 50.7% of Australia’s small business experienced growth during 2017, which was the highest rate of growth in the past three years. CPA Australia also established that more businesses expected further growth and business activity within the next year than previously.

With these results, it is a timely reminder to assess your business and consider some factors and precautions to best prepare your business for growth.

hooters-australia-logoAustralia’s branch of the well-known American food chain Hooters has been placed into voluntary administration in order to give the company some “breathing space” and help the owner re-assess the business and his involvement moving forward.

The Group’s Administrators stress that it is business as usual for Hooters with its three Sydney restaurants and one Gold Coast restaurant continuing to trade over the administration period, which is expected to take up to two months.

by Emily Naumoska

Retail experts and insolvency practitioners alike have announced that even large, well-known local Australian retailers are not above the risk of insolvency.

Recently a number of high profile Australian retailers entered into administration including one of Australia’s most exclusive brands Oroton, in late 2017. Other recent collapses include Dick Smith, Toys R Us, Metalicus, Kangaroo Tent City & BBQs, along with Australia’s plus-size clothing fashion retailer Maggie T in 2018.

by Chris Kindis

In this matter [2018] NSWSC 707, Brereton J has upheld the s588FG(2) ‘Good Faith’ defence run by Bildavoid Concrete Voidforming Systems (“Bildavoid”).

Background on the Matter

Edition 12The Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

In this edition we take a look at valid defenses for a DPN, the launch of Single Touch Payroll and the extended Anti-Phoenix Measures taken in the recent budget.

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

It is with great privilege we can advise that Veritas Advisory has been chosen to be on the panel of contractors of the Office of the Registrar of Indigenous Corporations (“ORIC”).

by Adam Lysle

In the last two weeks, we have seen an increased focus on the risks associated in dealing with operators in the property sector. In fact, the entire business community seems to be enveloped in interest in the world of various collapses that have taken place over the last few months and years. One larger collapse which has attracted a significant amount of interest is the collapse of Project Group, a Victorian builder.

The Curat emailThe Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

In this edition we take a look at recent publicity and penalties in the political arena as well as the rising geo-political risk and China.

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

The Curat emailThe Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

In this edition we take a look at the year ahead, the proposed changes for the period of bankruptcy and a further look at the 'safe harbour' provisions for company directors.

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

2018/19 is shaping to be a year of opportunities and we are excited to announce the addition and promotion of key staff within Veritas Advisory.

Check out our recent announcement.

by Charith Seneviratne

The increasing presence of phoenix operators demonstrates that the individual regulators are inadequately equipped to address illegal phoenix activity. In addition to this, current anti-phoenix measures focus’ too heavily on enforcement and prosecution of existing phoenix operators rather than deterrence of future phoenix operator.

The Curat emailThe Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

In this edition we address the changes in our industry from the regulatory framework and legislation perspectives. 

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

The Curat emailThe Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

In this edition we have some great articles including the announcement of our new office location at Miranda. 

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

by Frank Farrugia

Voluntary Administration, when used as a tool for a formal restructure can have many advantages, including giving the Company a breathing space from disputing directors or its creditors while trying to ensure the best possible return via a pari passu distribution to eligible creditors. The VA process can also facilitate a rehabilitation of a financially distressed company which has a viable business.

Veritas Advisory has welcomed a number of exciting changes this year. We are very pleased to announce our top three achievements. As they say, all good things come in threes!

1. We would like to congratulate our newest director, Vincent Pirina, in his new status as registered liquidator. We wish him all the best as he excels in this role.  

2. It has been with a lot of hard work that we have managed to change office locations to Level 5, 123 Pitt Street, Sydney. We look forward to our new office coming alive and watch out for the welcome invite! 

3. Last but not least, we are excited about opening our newest location in Miranda. We are all packed up, ready to go and looking forward to what's to come.

The Curat emailThe Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

This 1st edition for 2017 gives us a chance to reflect on 2016, look at where Veritas Advisory is going in 2017 and introduce our newest Director, Vincent Prina.

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

 

The Curat emailThe Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

This edition gives an update on Dick Smith's interpretation of data the board appears to have relied on, guiding SMEs on the future of unfair contracts and a look at the inaugural International Personal Insolvency Conference.

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

 

by Adam Lysle

Well, a quick snapshot: The race to the Prime Ministership resembling an episode of the infamous Days of Our Lives soapy with a long drawn out battle over nine undecided seats and the prospect of a volatile senate still looming; we have a damning report in New South Wales over the greyhound racing industry which will see an end to that industry in NSW and the ACT at the very least from 1 July 2017; the American election is an even more interesting evolving situation when considering the world’s stability and of course Brexit is an extraordinary vote result that only time will tell what effect it will have on the world stage. All of these stories have certainly stolen the headlines lately.

The Curat emailThe Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

Click here to view our latest Newsletter and see what has been happening at Veritas Advisory.

 

Many businesses should be using the turn of the new financial year to identify and pursue new opportunities for growth. Veritas Advisory is no different, with that in mind, it’s time to reflect on our first 3 years and look forward to the years ahead.

In the last 3 years, Veritas Advisory has grown from an initial team of 15 to now a team of 25 and introduced our presence interstate in Melbourne with other regional and interstate opportunities in our sights. Undoubtedly the loss of Murray in mid-2015 has also meant that the entire team has worked hard to live up to his legacy and strive for truth and excellence each and every day.

by Louise Thomson

It was interesting that the conglomerate US Bank Morgan Stanley is significantly behind the problems of Arrium.

Morgan Stanley, according to the reports, (see SMH April 18 article by Sarah Danckert) has filed action in the Delaware Chancery Court seeking orders that Arrium and its subsidiary companies repay a $US75.4 million ($A97.6 million) credit facility the US bank provided in 2013.

The Curat emailThe Curat - the latin word for cure - aims to provide insight into distressed matters for both the Corporate and Individual worlds.

In this edition of the Curat, we look at what is ahead plus what has been happening at Veritas Advisory. 

Click here to view our latest Newsletter.

 

by Matt Riedy

With the Dick Smith saga well into maturity, aggrieved creditors continue to dominate the media. With the help of Senator Xenophon, creditors are able to voice their frustration and concerns over gift cards in particular or outstanding deliveries. Understandably so!

The main concerns surround the point of the continuation of trade and timing of the commencement of the saga, together with the failure to honour previous sales or gift cards. This is part and parcel of the insolvency industry as a whole – and I thought I would take the opportunity to attempt to explain the process.

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