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New Blacksheep company not affected by $2.5 million collapse
The liquidator to the former Blacksheep Productions business (not the
new business which is currently trading) has issued a scathing report
that reveals excessive losses and mismanagement. Blacksheep is a Sydney
based video and audio visual firm with blue chip clients such as
Westfield, Macquarie Group and Nestle.
Blacksheep Productions collapsed at the end of 2008 when the Australian Tax Office took action over $264,302 owed for Superannuation and a massive $940,620 for GST and withholding tax. At the time, CX was told that the firm was subject to legal claims relating to the estate of Kevin Alcott and that those court actions led to the collapse. At the time the liquidator would not comment on the matter.
Liquidator Mark Roufeil of PPB reported that the firm failed due to poor administration, poor strategic decisions, inadequate control of discretionary expenditure as well as the legal dispute.
In addition to not paying tax or superannuation on behalf of staff, the firm also had trade debts of $1,376,022. Almost all equipment was covered by lease finance, so the company had very little inventory.
Most disturbingly, two former staff were owed $27,164 for unpaid wages. At the same time, the sole director Ben Alcott owed Blacksheep $163,160. As Alcott was recently declared bankrupt, recovery of that money is unlikely.
The report also highlights what the liquidator refers to as preferential payments of $283,000 in the months leading up to the collapse of the company. These may be investigated with a view to reclaiming some or all of the payments.
Blacksheep was in trouble through 2008, and attempts were made to sell the firm. But it appears the books were doctored to show the company in a better light. An amount of $214,541 was shown on the books as ‘deposits paid', which should have been written off, but "the effect of this accounting was to overstate assets and profit", says the Liquidator. An amount of $700,000 for work in progress was revised up from $291,000. "I do not believe it to represent any actual asset."
The money owed to the firm was shown at $512,031, but in liquidation this shrunk to $129,278. "The substantial decline in the company's levels of receivables in the months leading to liquidation is still subject to further investigation."
PPB have refused to comment further on the matter both before publication of our original article, and at presstime. They have been paid $136,980 plus GST for work so far, and expect to receive another $50,000. The partner in charge of liquidation charges his time at $428.18 per hour. Secretarial services are charged at $135 per hour (plus GST).
The Blacksheep business name and customer list was sold to Neon Pictures Pty Ltd for $70,000. This ensured continuity of employment for existing staff.
Read our previous story: Here.
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