McLaren Vale eatery reopens after going into administration with debts of $280,000
A MCLAREN Vale business that went into administration with $44 in the bank and debts of almost $280,000, then began trading the same week as an identical operation under a new directorship, is facing scrutiny from the Australian Securities and Investments Commission.
According to ASIC records, Brad Redman was the sole director of Redaley Pty Ltd, operator of The Artel Restaurant & Gallery, which was registered on June 24, 2014, and placed in administration on July 17 this year, owing $278,668.
His wife, Kate, registered Vales Catering Pty Ltd, of which she is the sole director, on July 1.
Both companies have The Artel’s Main Rd address as their principal place of business.
Mr Redman confirmed that his wife was now overseeing The Artel and that he was employed as a chef.
He said they wanted to continue operating so workers continued to have jobs, although The Advertiser understands that a very small number of former employees have stayed on.
Confident that the business can return to profit, Mr Redman said that “certain aspects” of the previous losses were due to incompetent employees. When pressed for further comment, he said to “contact the administrators, it’s got nothing to do with me now”.
Mr Redman, who was declared bankrupt in late August, first approached liquidators Heard Phillips on June 9, seeking information about various insolvency options.
In the weeks following, Heard Phillips’ directors fielded several more calls and emails from Mr Redman.
According to the liquidator’s records, on or around July 13, the property’s landlord, Richard Harvey, “purportedly” entered The Artel, terminated the lease, and took possession of company assets. Mr Harvey would not confirm or deny this, saying instead that the Redmans have been good tenants, despite owing him more than $5000 in unpaid rent.
Heard Phillips has flagged concerns about Mr Harvey’s actions with ASIC and creditors.
Former employees are among Redaley’s creditors and Brett Sparrow, the father of one affected worker, Tyson, 15, is livid that the couple has been able to continue operating.
Another former worker, Tyson Atkinson, said he was owed “thousands” in unpaid wages and superannuation, while Ben Noble, who left The Artel prior to it going into administration, said he was personally owed $36,000 for a “business loan” given to Mr Redman in 2014.
Mr Sparrow said he had written to both ASIC and Heard Phillips, asking that the matter be investigated further. “Everyone who has been affected feels really cheated,” he said.
“We don’t want the region to become known for this type of behaviour and it’s something that leaves a really bad taste in the mouth of the local community.”
The ASIC website explains the concept of “phoenixing”, which refers to directors placing a company into administration or liquidation, leaving no assets to pay creditors, while a new company continues the business under a new structure.
Penalties for this may involve imprisonment.
Figures in a 2012 PwC report, commissioned by Fair Work Australia, estimated the cost of phoenixing to the Australian economy to be as high as $3.2 billion a year.
Source: The Advertiser, Luke Griffiths, 14th September 2015
Originally published as: McLaren Vale eatery reopens after going into administration with debts of $280,000
