Former liquidator David Iannuzzi of Veritas Advisory was a witness in the ATO’s prosecution of Heng, Sarinn and Chy for illegal phoenix operations by providing evidence in relation to five entities.  The matter went for over three years with a decision handed down on 9 September 2021.

For more information see the ATO Media release.

Grants and support
Economic Sentiment Survey1

CPA Australia is conducting a survey of accountants in response to the National COVID-19 Response Plan, assessing the economic and business sentiment of accountants. Almost half are worried about the state of the Australian economy. This is especially the case in areas affected by lockdowns. However, CPA Australia’s CEO Andrew Hunter states that they expect a positive uptick through the plan, but if not so then extra government assistance may be required.

Confidence in business performance is higher, but many accountants report that clients are experiencing financial stress. There has been a surge in inquiries made to accountants during the lockdown period.

At the time of writing, New South Wales is in a period of lockdown without a certain end date. In the meantime, we deliver you bite-sized information we hope will be useful to your business and making the right choices.

Business Turnaround Experts

It is likely that many businesses will be looking for consultants, and specifically turnaround experts, as they try to cope with the effects of lockdown on their business which includes their asset base, streams of income and business model. In considering this, businesses should find solutions appropriate to their business model and financial position, as this varies widely from business to business and place to place. They will have to deal with customers and suppliers as well as the business, giving reassurances that their needs will be met.

Is your business immune?

As the first cases of person-to-person transmission of coronavirus have been confirmed in Australia, the NSW Health Minister has taken it a step further by recommending that people cease all handshaking.  The NSW chief medical officer said that missing a case is always a possibility, though reassured that there is no widespread transmission in NSW. 

Setting up and running your own business takes blood, sweat and tears… and some liabilities or risks.

Most small business owners get carried away with managing the day to day trading of the business and fail to take a step back and see the overall financial health of the company--- more often than not it’s too late for business owners to realise that the company is drowning in debt and they find themselves asking… “How do I get out of this mess?”

Thank you for visiting the information page for the Liquidation of Fund Options. 

by Goran Veljanoski

Voluntary Administrators were appointed to fashion chain Bardot last month on 28 November 2019 as the consumer sector continues to shrink.

Just ten days earlier, well known restaurant chain Crinitis also entered Voluntary Administration as the owners now attempt a restructure of the restaurants.

It looks like 2019 is set to end just as 2018 did, with evidence that even the big names are susceptible to the problems which plague small to medium businesses.

By Renee Zhou

The stories of the US and China trade war have been centred on trading tariffs for the past 16 months. Instead of adding to the repetitive story, recently, this discussion on trade wars shifts the focus onto currency wars and the implication cryptocurrencies will have.

For decades, the US currency has been the world’s major reserve currency. With the economic growth of China, it is believed that China has attempted to dedollarize to reduce its exposure to US sanction in various ways. Dedollarize refers to using domestic currency instead of US dollars for countries other than the US. For example, the introduction of petroyuan in 2017, used Chinese-based currency for oil trading, so countries such as Russia, Venezuela and Iran could avoid pressures of the US currency.

We are saddened to see how Australia has been hurt over the last few weeks due to the catastrophic bushfires. Veritas has made a donation to Red Cross which will help with relief and recovery efforts made possible by the organisation.

The Government has announced grants and low-interest loans for businesses who have lost assets or had an adverse decline in revenue due to the bushfires. We would like to offer our expertise to business owners that may have been affected to help with the potential burden which may arise from the unfortunate turn of events. This offer is completely obligation free and we are happy for you to put us in touch with anyone who may require our guidance.

Speak to us to find out if you're eligible for any of the Government grants, or to find out what other options may be available to you or your business.

by Louise Thomson

At the start of August, Johnny Law and I attended the UNSW Australian Defence Force Academy campus in Canberra for a week to undertake their course in Digital Forensics.

I hear a series of Ho Hums and What??? and see the rolling of many sets of eyes, but not the question What is Digital Forensics?

Yes, I appreciate that was probably an apt response unless you have an interest in Forensic Accounting or Computer Science.

HOWEVER, we (i.e. you, me, all of us who are reading this article) now have access to some investigative tools that was previously available to law enforcement, intelligence agencies, private investigators and corporate security service providers. More importantly, Donald Trump wouldn’t have had to whine about ‘No Collusion, No Obstruction’ for the last two years as he would more than likely not have been thrust upon the naïve, innocent unaware world. Why? Because the Russians would not have made use of those skills to destroy Hillary Clinton and anyone else who was challenging him during 2015-2016.

by Soren Tan

In the post-millennium era, large disruption has been caused by the emergence of digital technology. In recent years, social media has penetrated mainstream media and become an essential part of our daily lives. Some may say that it is a pre-requisite in today’s competitive market and is not something that will disappear anytime soon.

Based on a chart by sproutsocial1, the likelihood of an individual buying from the companies that they follow on social media platforms is 57.5% more likely than companies that they do not follow.

Sproutsocial chart

by Ceclia Do

The Franchising Industry has been highly important in the Australian economy, making up to 9 per cent of the country’s GDP, according to the Parliamentary Joint Committee on Corporations and Financial Services (“the Committee”).

The recent string of scandals involving major franchisors such as Domino’s Pizza, 7-Eleven, Caltex and Retail Food Group which owns Michel Pastisserie, Brumby's, Gloria Jeans, Donut King and the Crust Pizza brand, and the financial difficulties faced mostly by Franchisees as a result of the failure of the business they heavily invested in, have triggered the Committee to conduct an inquiry into the franchise industry.

On 14 March 2019, the Committee released a report on Fairness in Franchising inquiry, looking in-depth into the current practices and workings of the industry, particularly into the relationship between Franchisors and their Franchisees.

by Peter Chakty

Anyone who has been fortunate (or cursed) enough to have worked as an accountant, are likely to have been greeted at one time or another by the same response when explaining their profession to their family and friends. It goes something like this, “Oh you’re an accountant?” “How boring” “Don’t you just add up numbers all day?” This couldn’t be further from the truth and is a common and frustrating misconception of what it means to be a ‘modern accountant.’

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.

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 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.

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?

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.

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

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.

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.

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.

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.

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.

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.

by Adam Lysle

Whilst the final figures for the Christmas trade aren't out just yet, early indications are that Australian retailers suffered a sluggish start to the peak season but have come home with a bang with fantastic Boxing Day trades. What’s got everyone talking though is the collapse of yet another major Australian Retailer – Dick Smith Electronics (“DSE”). It is noted that over the last 18 months, Australian Retailers have enjoyed some steady improvement in sales growth. 

by Cameron Lee

How you bounce back will set you apart!

Important business decisions are made on a daily basis by all companies. Unfortunately everybody makes mistakes and no matter how many good decisions you have made in the past, one catastrophic decision can have a significant impact on your business. The way you bounce back from these mistakes and minimising the risk of making a poor decision is what can set your business apart from the competition.

by Adam Lysle

Nearly every person in Australia has an insurance policy. CTP, car insurance, home and contents, travel etc. Nearly every business has some type of insurance be it for public liability, fire, theft etc. However, it amazes me that not many businesses have considered a trade credit insurance policy of some kind.

by Adam Lysle

Time and time again the old bandwagon of director’s duties comes out. However, now more than ever, the corporate watchdog is using their federal connections with the ATO and Department of Employment to take action against directors. I guess therefore, it’s time to take heed before taking action when businesses and/or directors enter into a stressful period.

By Louise Thomson and Irena Malley

The majority of people reading this article would know at least one person who owns or works in a family business – it is a business structure that is very much ‘close to home’.

by Frank Farrugia

Insurance has been in the past a dirty word seen as a cost to avoid. It always appears that the cost of insurance keeps increasing. Something that I always lived by was the words ‘you will only need insurance when you don’t have it’.

by Frank Farrugia

The final report on the review of the Act was tabled before parliament Wednesday, 18 March 2015.

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