Mossgreen Auctions Australia in Administration. Total KAPUT?

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BigSaint
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by BigSaint »

Kevin Morgan wrote:Based on my experience in the Auction business:

Let's take an average $1m sale... and assume they sell 75% of that = $750,000 Gross

Commission at 24% is another $180,000
Vendor commission varies between nil and 19.5% so say 15% as an average = $112,500

So gross profit ignoring packaging & GST = $292,500

They print and distribute 1,000 catalogues at a cost of $10 each plus postage of $5 each to 900 Australian Clients plus 100 overseas clients at $16.50 each $16,150

Rent is $450,000 p.a. so assuming 26 sales per year = around $17,250

Advertising & Promotion Industry Norm. is around 4% of turnover = $30,000

Staffing would be around 20% of turnover = $150,000

Other costs such as vehicles, rates electricity would take care of $100,000 pa easily, divided by 26 = approx $3850

23 directors on average $200k each (very conservative in today's terms when IT professionals are on $250 -$300K ) divided by 26 = $175,000 approx.

So total costs for this assumed auction would be about $465,000

A loss of $172,500

I do not know what their turnover has been, but even at $52M they would only turn a profit of $2.6M before GST & company tax. Or about 5%, which is an average dividend for most large companies.

Thank you for those figures Kevin.

I had heard months back on the rumour mill that other departments had been propping up the stamp business & let's face it sometime the the "big" collections are going to run out.

I had also heard that Mossgreen were going to sell uncatalogued box lots prior to each sale. This did not seem to fit the image of Mossgreen where recently a "D-Type Jaguar" was offered with an estimate of $7 to $8 million.
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https://www.afr.com/news/is-this-classic-car-worth-8-million-20171003-gytf15
It was passed in.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Allanswood »

And if you take those same estimates and use 2 auctions as week instead of 2 a month? And if 23 (wow!) directors were not all on 200k?

We're not just talking stamp auctions with Mossgreen.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by aethelwulf »

Allanswood wrote:And if 23 (wow!) directors were not all on 200k?
On their website, under the tab "Board", they only show 3 people--CEO, CFO, and a co-founder/director.

Then there's the specialists; the consultants (they would be freelance contractors?); only 4 people listed in "administration".
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by bazza4338 »

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https://www.propertyobserver.com.au/forward-planning/investm ... ation.html

The auction house Mossgreen has gone into voluntary external administration. Mossgreen billed itself as one of Australia’s largest auction houses.

The move came December 21 with the appointment of three administrators from accountants BDO, James White, Nicholas Martin and Andrew Sallway.

It followed failed fundraising attempts in early December.

The first meeting of creditors is January 4, 2018.

Jack Gringlas of Jadig Investments Pty Ltd is understood to have been advised December 20 given his status as a secured creditor of the company which has showrooms in Melbourne's Armadale, Queen Street, Woollahra in Sydney and Parnell in Auckland.

One of the last major contents auction was for the contents in the Macleay Regis penthouse, home of the late esteemed gynaecologist Professor Malcolm Coppleson and his late wife, Patricia, who was Vogue Living’s editor-at-large.

The 172 lots (pictured onsite) included the sale of a $192,200 Ian Fairweather work which had an $80,000 to $120,000 price guidance. A Tim Maguire fetched $117,800.

Mossgreen was known for its single-owner sales, especially since the estate of the late art patron Ann Lewis in 2011, and then an array of objects from much-loved artist Margaret Olley’s Paddington, Sydney home.

Its first auction in its Armidale premises in 2013 was the collection of John and Marita McIntosh. McIntosh is a Melbourne establishment stockbroking doyen.

It was in late September 2017, that BDO was approached by the company’s accountant, Laura Raymer of CFO Strategic, to provide assistance to the Mossgreen in assessing its financial position.

BDO was formally engaged on 26 October 2017 to undertake an independent business review.

A final report was issued to Mossgreen on 8 November 2017 after documentation was provided relating to its financial position and operations.

Paul Sumner has over thirty years experience working in the art and antiques industry with international and Australian auction houses.

Sumner, the son of art and antique dealers, too his first auction at age 17.

He emigrated to Australia in 1987 to commence work with Sydney Auction house Rushton Fine Art and joined Christies Australia in 1990, becoming their Sydney manager in 1992.

He was then headhunted by Sotheby’s Australia, and at age 32 became their youngest ever managing director.

Paul held this position until 2001 when he was appointed the Managing Director of Sotheby’s London Auction house at Olympia, London.

He returned to Australia after this contract period to set up a new company Mossgreen with Amanda Swanson.

After nine-years of growth Mossgreen merged with Leski Auctions in 2012. Mossgreen and Leski had a combined turnover in its first financial year of $22 million.

The Mossgreen Melbourne rental premises were sold by Jagid Commercial Pty Ltd mid-year when buyers were advised the annual income was $481,960 per annum with favourable 3.5% rental increases every year, plus the benefit of a mid-term market review in 2020.

The former Armadale Theatre building in High Street, Armadale sold for around $10 million to an investor, John Karkar after a marketing campaign that saw 10 plus offers.

The property, 926-930 High Street,adjoins Armadale train station. It had Mossgreen Tearooms-Melbourne, in partnership with Peter Rowland Catering, which offered one of the finest high tea experiences in Victoria.

The premises had last traded in 2012 for $5.06 million. Previously, the building was occupied by art dealer Sotheby’s.

CBRE’s Retail Strip Investments team comprising Josh Rutman, Rorey James and Lewis Tong negotiated the sale.

Rutman said the international marketing campaign appealed to a mix of local and offshore investors.

They were attracted to the long-term lease, location and confidence in the Mossgreen business.

James said the significant capital appreciation - almost $5 million in less than 5 years - in such a short period of time highlighted the lack of blue chip investment properties available in the Melbourne market.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by ebayer »

Image

https://www.propertyobserver.com.au/forward-planning/investm ... ation.html

The auction house Mossgreen has gone into voluntary external administration. Mossgreen billed itself as one of Australia’s largest auction houses.

The move came December 21 with the appointment of three administrators from accountants BDO, James White, Nicholas Martin and Andrew Sallway.

It followed failed fundraising attempts in early December.

The first meeting of creditors is January 4, 2018.

It was in late September 2017, that BDO was approached by the company’s accountant, Laura Raymer of CFO Strategic, to provide assistance to the Mossgreen in assessing its financial position.

BDO was formally engaged on 26 October 2017 to undertake an independent business review.

A final report was issued to Mossgreen on 8 November 2017 after documentation was provided relating to its financial position and operations.
I am not an accountant, but reading the above, and then reading this below, makes me feel the Sumner promise cannot possibly be met, barring a major miracle.

Three months of actively trying to sort the funding issues seem to have failed badly by my reading of the above?

How Mr. Sumner can state "no vendor will lose any money" is a mystery. It seems in Victoria no trust accounts for Auction proceeds are legally required - if so they might well lose the lot, or a large chunk, it seems possible? Who guarantees the vendor's money will not go on fees etc? Same with staff promises, I also fear might be the case. Hope not, but history tells us this stuff occurs.
Michael Eastick wrote:Just had a quick chat with Torsten and received the following in an email from him.

"No vendors will lose any money in this process, and neither will any of our staff, who will also be fully supported through this process.

Paul Sumner
Chief Executive Officer"

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by gregbear61 »

It was in late September 2017, that BDO was approached by the company’s accountant, Laura Raymer of CFO Strategic, to provide assistance to the Mossgreen in assessing its financial position.

BDO was formally engaged on 26 October 2017 to undertake an independent business review.

A final report was issued to Mossgreen on 8 November 2017 after documentation was provided relating to its financial position and operations.
It would seem likely then that the report indicated they were close to trading whilst insolvent
It (the voluntary administration) followed failed fundraising attempts in early December.
Therefore others thought so too.
Jack Gringlas of Jadig Investments Pty Ltd is understood to have been advised December 20 given his status as a secured creditor of the company
So it looks like Jack Gringlas is the 'banker' to Mossgreen. At the very least a major creditor.

At the first creditors meeting, creditors can vote to replace the administrator.

Jack may well decide to do this, and manage the administration himself?

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by fchd »

gregbear61 wrote: So it looks like Jack Gringlas is the 'banker' to Mossgreen. At the very least a major creditor.

At the first creditors meeting, creditors can vote to replace the administrator.

Jack may well decide to do this, and manage the administration himself?

Wouldn't that be a conflict of interest? Surely the administrator needs to be independent of the creditors?

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by BigSaint »

If Jack says he wants to appoint a different administrator then that administrator will be working in the best interests of Jack.

There is no conflict of interest.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

Give the near solid week of Public Holidays since the sneaky announcement of this meeting, Creditors need almost have registered already, or their voice will not be heard it seems.

Seeing there has been near zero mainstream media on this, I am assuming large numbers of creditors are totally unaware of this meeting taking place,

As the mossgreen offices are closed until Jan 15, a vendor of ANYTHING with say $500,000 of goods already in their pipeline, appears to be unlikely to be able to withdraw that material if they so choose, before Administrators are appointed?

As the Velvet Auctions mess below clearly demonstrates, once those guys are in charge, near all monies can be lost totally for vendors gobbled up by quite OBSCENE levels of fees. Indeed in that case the landlord simply took possession of the material on premises, and refused to let ANYONE see it or access it - s seems clear -


http://www.stampboards.com/viewtopic.php?f=13&t=68129


https://insolvencynotices.asic.gov.au/browsesearch-notices/n ... =mossgreen


COMBINED NOTICE OF APPOINTMENT AND FIRST MEETING OF CREDITORS OF COMPANY UNDER ADMINISTRATION

Company details

Company: Mossgreen Pty Ltd
ACN: 163 353 053
Status: Administrators Appointed
Appointed: 21 December 2017
Appointor: under section 436A, the Company

Appointment details
Administrator(s): James White, Nicholas Martin and Andrew Sallway

See Company details (above) for the date of appointment and the section of the Act under which the administrator was appointed.

Meeting details

Notice is given that a first meeting of the creditors of the Company, or a first meeting for each of the Companies, (for multiple companies), will be held:

Location: BDO
Tower 4
Level 18/727 Collins St
Docklands VIC 3008
Meeting date: 04 January 2018
Meeting time: 11:00AM

(If multiple companies, see special instructions for meeting times)

Agenda

The purpose of the meeting(s) is to consider:

whether to appoint a committee of inspection; and
if so, who are to be the committee's members.

At the meeting, creditors may also, by resolution:

remove the administrator(s) from office; and
appoint someone else as administrator(s) of the Company.

Proof of debt and proxies

Creditors wishing to attend are advised proofs and proxies are to be submitted to the Administrator by:

Time: 4:00PM
Date: 03 January 2018


Electronic facilities

Creditors wishing to attend by electronic means are advised they can use the following facility:

Facility details : Provided upon request
Password:

Creditors wishing to participate in the meeting by using electronic facilities must return to the external administrator not later than the second-last business day before the day of the meeting, a written statement setting out

i. the name of the person and of the proxy or attorney, (if any); and
ii. an address to which notices to the person, proxy or attorney may be sent; and
iii. a method by which the person, proxy or attorney may be contacted for the purposes of the meeting.

Date of Notice: 22 December 2017

James Michael White
Administrator

Nicholas Martin and Andrew Sallway
Joint Appointees

Address C/- BDO, Level 11, 1 Margaret Street SYDNEY NSW 2000
Contact person Jeff Marsden
Contact number (02) 8264 6692
Facsimile (02) 9240 9821
Email Jeff.Marsden@bdo.com.au

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

gregbear61 wrote: So it looks like Jack Gringlas is the 'banker' to Mossgreen. At the very least a major creditor.

At the first creditors meeting, creditors can vote to replace the administrator.

Jack may well decide to do this, and manage the administration himself?
As far as I recollect it was largely Jack's company until recent months.

I'd urge all those who are owed monies by mossgreen or have a potential claim, to consider appointing Mr Gringlas as their proxy for this meeting ASAP.

At times, control to change Administrators etc needs to be done not just by majority dollar value, but that AND a certain % of creditors as I recall?

I feel confident that what is in his best interests is likely in the best interests of smaller debtors. :idea:

Jack Gringlas is of course a member here and as recently as September 19 he posted this -
Jack Gringlas - September 19, 2017 wrote:Hi Glen,

This is Jack Gringlas, I joined up to the stampboards Chat Board, to correct/clarify and comment on a few of your notes in this post.

Basically most of what you have stated is correct.

I have retired from the Board, and the Chairman's role at Mossgreen.

Both Charles Leski and I have sold our shares to Paul Sumner. There is nothing unusual about this, just part of my transition to retirement planning, whereby I am reducing the number of active boards that I sit at.

I am mainly focused on my Finance business, working with my son to grow a significant mortgage investment business for commercial loans, together with managing a number of other business investments.

Regrettably the AFR did next to zero research and got one big fact wrong: I am certainly not a Billionaire :(

However, I am not complaining as I do certainly have sufficient funds to maintain my expensive stamp collecting passion. (But please don't tell the wife) :)

Anyway, enough from me as I am now just a private stamp collector, typing away at his computer

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Kevin Morgan »

"Mr Sumner said all creditors had been informed of the administration."

http://www.smh.com.au/national/auction-house-mossgreen-goes- ... 0abvf.html

Auction house Mossgreen enters voluntary administration

Carolyn Webb is a reporter for The Age.

The co-owner of high-profile art gallery and auction house Mossgreen says creditors will not be out of pocket after the shock news the company has gone into voluntary administration.

Paul Sumner, who is also chief executive and co-founder, said the move was due to debts following the company's rapid expansion and the withdrawal of its key investor.

On December 21 Mossgreen, which has branches in Melbourne, Sydney and Auckland, thanked customers via its Facebook page for their 2017 support and announced its holiday office closure.

The next day, the Australian Securities and Investments Commission announced that administrators had been appointed for Mossgreen Pty Ltd.

The administrators are James White, Nicholas Martin and Andrew Sallway from corporate advisers BDO.

A BDO media release says they are undertaking "an urgent assessment of the business and will be exploring all options".

The first meeting of creditors will be held in BDO's Melbourne office on January 4.

Mossgreen was founded in Melbourne in 2004 by Mr Sumner and wife Amanda Swanson. Its significant recent growth was bankrolled by businessman Jack Gringlas.

In 2013, Mossgreen acquired coin, stamp and memorabilia experts Charles Leski Auctions and in 2015 acquired New Zealand auction house Webb's.

In 2016, Mossgreen opened its first Sydney auction rooms and gallery, in the exclusive suburb of Woollahra.

But in July this year, Mr Sumner and Ms Swanson bought back Mr Gringlas' share of the business.

"Since then, we've been advised to take the [voluntary administration] course, as the best way to clear historical debt – associated with previous investors – out of the business, and restructure the company and move forward," Mr Sumner said.

"We've probably grown a little bit fast considering that the market plateaued. I'll be the first to say that that's the case.

"What we're doing now is the opposite. We're restructuring, taking out some of the costs of our business, so that we are a much leaner, healthier business starting from the first of February."

Mr Sumner said Mossgreen did not plan to close any outlets or lose staff, and creditors would be paid.

"Not one vendor or one buyer will lose one dollar in this process," he said.

The first of Mossgreen's 2018 auctions would proceed on February 5. Items held under consignment to sell or buy would not be lost to their owners.

Mr Sumner said all creditors had been informed of the administration.

"Mossgreen is a business that relies on trust, so when you do something like this, your reputation will be affected, by how you deal with your vendors and buyers."

Mossgreen is known for its sale of single-owner collections such as British collector Frank Cohen's 80 contemporary artworks valued at more than $5.8 million.

It handles auctions of Australian masters paintings including Russell Drysdale's Grandma's Sunday Walk, which sold for $2.4 million.

It also sells collectibles such as Dick Reynolds' 1930s VFL Brownlow medals, and a 1969 Mini Cooper S car.

In an Australian Financial Review profile in 2016, Mr Sumner said Mossgreen's turnover grew from about $10 million before the Leski merger to $39.6 million in 2015, with staff numbers jumping from eight to 55.

"We won't continue at this pace; this is probably the last big growth spurt of our business," he said at the time.

The-then AFR reporter, Katrina Strickland, put to Mr Sumner that such rapid expansion would spark inevitable questions about growing pains and digestion, but Mr Sumner replied that "the greatest risk in this business is not growing. Costs go up but the art market stays pretty flat. So you have to grow."
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by gregbear61 »

Interesting to note that Jack Gringlas joined in 2013 at the same time as Charles Leski, bankrolled the merger, and was appointed Non-Executive Chairman.

Quite a big deal and major financial commitment from all parties.

Then both Jack Gringlas and Charles Leski exit together around September 2017, a little over 4 years later.

This after the Webbs NZ and Prestige mergers in the intervening period.

The exit was immediately followed by the appointment of BDO in October 2017 to explore the financial way forward, last ditch attempts to find new backers, and finally the voluntary administration.

Mossgreen certainly would have benefitted from more time to bed down the rapid growth of recent years before the departures.

Likely to be more in the press this week about it all...

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

gregbear61 wrote: Mossgreen certainly would have benefitted from more time to bed down the rapid growth of recent years before the departures.
Over many years I have watched harebrained ideas emenate from otherwise sane collectibles businesses. :idea:

When I saw mossgreen were tied up with Mick Fleetwood visiting Australia I knew the inmates were now running the Asylum!

http://www.culturemad.com/2017/11/01/mick-fleetwood-attend-m ... melbourne/

I worked in a senior role for Australia largest record company and can assure Sumner the path to going broke is generally strewn with such nutty concepts, from those who are starstruck by rock stars. Their savvy managers will bleed you DRY.

I have actively commented here on the totally idiotic purchases by the brain dead Stanley Gibbons Senior Management before they were sacked last year, that have seen their share price sink from 400p a year or so back, to under 3p this month. DUMB moves like that get you murdered by investors and the market. Gibbons are now dumping these idiot buys for a song. Losing shareholder millions EACH time.

I have seen John Mowbray's equally mad expansion moves into areas he did not know or understand, like into buying slabs of Sothebys and Goodman/Bonham Auctions, Rare Book companies, and even Stanley Gibbons Australia, and worse a loopy general auction businesses called WEBBS in NZ, near lost him his shirt. And his purchases lost the shirts of many others.

Lots of investors lost money of course, as usual in such cases, and Mowbray bought back his stamp business for a song from the Administrators etc. Lucky John.

So what do mossgreen do - buy the same Webb NZ General Auction Business that Mowbray lost heaps of money on!!

They are still paying it off until the end of 2018 -

http://www.til.kiwi/uploads/Investor-centre/Annual%20Reports/2017AnnualReport.pdf

And then expand the staff to a quite enormous number -

https://www.mossgreen-webbs.co.nz/content/staff-profiles/

To be lotting up material that is selling for TEN bucks NZ a lot hammer price! Talk about movers and shakers over there - -

https://www.mossgreen-webbs.co.nz/m/view-auctions/catalog/id/93/?page=6

https://www.mossgreen-webbs.co.nz/m/lot-details/index/catalog/93/lot/14994/




With the recent takeover of Webb's auction house established in Auckland in 1976, by Melbourne based Mossgreen Auctions, a new chapter for the business is about to be written.

Like all businesses Webb's has had its ups and downs and most people in New Zealand see the recent sale to Mossgreen as a rescue package for the business

Mowbray Collectables was established as stamp dealers and auctioneers by John Mowbray in Otaki in 1974. Mowbray Collectables listed on the New Zealand stock exchange in 2000, and later bought into Peter Webb Galleries Ltd in 2003 increasing its stake to 49.44% over the next few years.

For a time the company was also a shareholder in Sotheby's Australia having purchased a 20% stake in Bonhams & Goodman, in 2004 which was converted to a holding in First East Auction Holdings, the licence holders for the Sotheby's Australia franchise which commenced in 2009.

At the end of 2013, Mowbray bought the 50.66% of Webb's it did not already own for $1.3m. By 2014 the company was finding the going tough and sold its shareholding in First East Auction Holdings for a small loss and wrote down the value of its own goodwill.

In recent times Webb's have struggled to maintain their market share, leading to the announcement of an interim loss of $1.9 million in 2015.


In June 2015 the stamp business was sold back to to the founder John Mowbray, leaving only Webb's auctions in the business portfolio of the newly renamed Bethune's Investments.

Mossgreen provisionally announced the acquisition of Webb's in October 2015, with Webb's to operate as a wholly-owned subsidiary of the Australian auction-house and gallery and the purchase was finalised at the end of January 2016

The new year saw a team from Australia quietly move in and start to make some changes, some big, some small, some quickly, some slowly.

On April 14 the rebranded venture, to be now known as Mossgreen-Webb's, was launched at a function in Auckland with Paul Sumner of Mossgreen as the new CEO.


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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Lakatoi 4 »

gregbear61 wrote:
Likely to be more in the press this week about it all...
The story appeared in this morning's Sydney Morning Herald "News" section. I haven't uploaded it here as it's just a compilation of statements made by Paul Sumner and other facts we already know.

Interesting the reporter claims it as an "exclusive", if anything Stampboards has the exclusivity to this :idea:
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by deebee444 »

55 staff, wonder what the weekly payroll was, explains a lot,

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Clive »

Paul Sumner is on the public record giving categoric undertakings that neither vendors nor staff will be affected by the move to enter voluntary receivership.

Should we not take his statements at face value until and if there is reason/evidence not to?

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by traralgon3844 »

From a Herald Sun subscriber article. Pretty much the same as the Age/Sydney Morning Herald article. But you have to look at a few snippets that have been released and can draw a few conclusions from them.

Mossgreen auction house goes into voluntary administration

ONE of Australia’s largest auction houses has entered voluntary administration in a decision to try and remove debts collected by previous owners.

Mossgreen chief executive and co-founder Paul Sumner said the move came after a key investor withdrew their funding, leaving the company is massive debt after recent expansions.


On Friday, the Australian Securities and Investments Commission revealed administrators had been appointed for Mossgreen Pty Ltd.

Only the day before, the company had thanked customers via Facebook for their support and announced their office would close over the holiday period.

Administrators from corporate advisory company BDO will oversee the financial assessment.

In a statement, BDO said the company will conduct “an urgent assessment of the business and will be exploring all options”.

Founded in 2004, Mr Sumner and wife Amanda Swanson oversaw Mossgreen’s takeover of New Zealand auction house Webb’s and the opening of its first Sydney auction rooms and gallery.

Businessman Jack Gringlas was a significant financial influence but was earlier this year bought out by Mr Sumner and Ms Swanson.

Mr Sumner told the Herald Sun Mossgreen planned to “restructure” the company but would keep all active employee contracts.

“Our employees are a critical part of our company and experience. Without them, the company would not be able to function,”.

The auction house mogul said financial advice found that the business could not function with this level of debt.

“We were advised to enter voluntary administration on the belief that it is the best way to clear historical debt, accrued through previous investors,” Mr Sumner said.

Mossgreen plan to open their 2018 on February 5 and items currently held under consignment to sell or buy will not be lost to their owners.


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"We were advised to enter voluntary administration on the belief that it is the best way to clear historical debt, accrued through previous investors,” Mr Sumner said."

Is that code for historical investors are screwed?

"The auction house mogul said financial advice found that the business could not function with this level of debt."

So you either sell off assets if you have any and pay off/down the debt or what? Someone other than Mossgreen loses out?

"Mr Sumner told the Herald Sun Mossgreen planned to “restructure” the company but would keep all active employee contracts."

Does that mean anyone not on a "contract" is likely for the chopping block.

And from the SMH article:

"What we're doing now is the opposite. We're restructuring, taking out some of the costs of our business, so that we are a much leaner, healthier business starting from the first of February."

If they are not shedding staff where arguably the biggest cost is, just how are they creating a much leaner, healthier business. Keeping ALL staff and just closing one showroom probably won't cut it.

Not being privy to the remuneration of staff I wonder if they have considered massive pay cuts at the top NOW and as contracts expire for the rest of the retained staff?
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by langtounlad »

Clive wrote:Paul Sumner is on the public record giving categoric undertakings that neither vendors nor staff will be affected by the move to enter voluntary receivership.

Should we not take his statements at face value until and if there is reason/evidence not to?

Clive
As administrators are in control of the company nothing former Directors say has any legal standing.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by GJ50 »

Need to remember this a voluntary liquidation so far..
Not like Velvet where everyone was LOCKED OUT by a 3RD PARTY.
I presume DEBT, ie Interest/ repayments to be a far bigger problem than enployee wages, which I believe have been paid up to date. Again not like the velvet Compulsory Liquidation. Finally Mossgreen have not had an auction AFTER they went broke.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

langtounlad wrote:
Clive wrote:Paul Sumner is on the public record giving categoric undertakings that neither vendors nor staff will be affected by the move to enter voluntary receivership.

Should we not take his statements at face value until and if there is reason/evidence not to?

Clive
As administrators are in control of the company nothing former Directors say has any legal standing.

Regards
Frank
Thank you Frank, for adding some reality to the Airy Fairy dreamings from some posting above.

Danny Jurd promised members here "everything was fine" with Velvet Auctions before they lost the LOT. Some here foolishly believed him too. I did not. :roll: :roll:

Some members here seem to feel this is a parking ticket that mossgreen have received.

It is not.

Paul Sumner's powers have been "suspended" a week back. He can 'promise' Clive a million dollars today for his used 1d Kangaroo, and that promise has zero legal weight I'd suggest.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

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The all too familiar raping and pillaging of monies is well underway.

BDO have already been paid for their work in advising Sumner.

They now advise in writing they will be paid out $200,000 inc. GST for their work up to the second creditor meeting in January, even if they are replaced by creditors - they will still invoice $200,000.

And the fun then begins.

The most junior of juniors - "Junior Cadet" charge out at $215 an hour plus GST to mossgreen.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by GJ50 »

News today.
Oroton which went into Voluntary Administration in Noxember today announce they are no longer in administration. ALL stores (76) to remain open and employees remain.
Not all end up like Velvet collapse.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by bazza4338 »

GJ50 wrote:News today.
Oroton which went into Voluntary Administration in Noxember today announce they are no longer in administration. ALL stores (76) to remain open and employees remain.
Not all end up like Velvet collapse.
https://www.abc.net.au/news/2017-12-27/oroton-to-be-sold-to-l ... rs/9286822

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Clive »

langtounlad wrote:
Clive wrote:Paul Sumner is on the public record giving categoric undertakings that neither vendors nor staff will be affected by the move to enter voluntary receivership.

Should we not take his statements at face value until and if there is reason/evidence not to?

Clive
As administrators are in control of the company nothing former Directors say has any legal standing.

Regards
Frank
Frank,

No, it doesn't, but it does have a moral standing. When someone gives their word in such an unqualified way, it could most likely be he meant it and will see it through.

Glen, your dopey use of Sumner offering me a million dollars for a penny roo is about absurd an example as you have used all year - I'm sincerely hoping your holiday will freshen you up.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by gregbear61 »

GJ50 wrote:News today.
Oroton which went into Voluntary Administration in Noxember today announce they are no longer in administration. ALL stores (76) to remain open and employees remain.
Not all end up like Velvet collapse.
A financial backer arrived at Oroton.

The financial backer (Jack Gringlas) left Mossgreen. They haven't found another.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by gregbear61 »

Clive wrote:
langtounlad wrote:
Clive wrote:Paul Sumner is on the public record giving categoric undertakings that neither vendors nor staff will be affected by the move to enter voluntary receivership.

Should we not take his statements at face value until and if there is reason/evidence not to?

Clive
As administrators are in control of the company nothing former Directors say has any legal standing.

Regards
Frank
Frank,

No, it doesn't, but it does have a moral standing. When someone gives their word in such an unqualified way, it could most likely be he meant it and will see it through.

Clive
I don't doubt the intent is there, but Sumner no longer has control of the company.

What he says are his own opinions, and not commitments made on behalf of Mossgreen.

As the major stakeholder now he is naturally keen to safeguard the reputation of the company as best he can, both for himself and the other stakeholders.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by traralgon3844 »

It will be interesting to see what happens with their auction calendar. Nervous owners of multi million dollar collections may get a little cautious about leaving their goods there.

Would you consign a $5,000,000 collection of whatever to a company under administration? Without trust account protection for sale proceeds many may steer clear and those with items in upcoming auctions may even seek to withdraw their already consigned items.

See Velvet.

It will be interesting times ahead.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

gregbear61 wrote:
Clive wrote:
langtounlad wrote:
Clive wrote:Paul Sumner is on the public record giving categoric undertakings that neither vendors nor staff will be affected by the move to enter voluntary receivership.

Should we not take his statements at face value until and if there is reason/evidence not to?

Clive
As administrators are in control of the company nothing former Directors say has any legal standing.

Regards
Frank
Frank,

No, it doesn't, but it does have a moral standing. When someone gives their word in such an unqualified way, it could most likely be he meant it and will see it through.

Clive
I don't doubt the intent is there, but Sumner no longer has control of the company.

What he says are his own opinions, and not commitments made on behalf of Mossgreen.

As the major stakeholder now he is naturally keen to safeguard the reputation of the company as best he can, both for himself and the other stakeholders.
Exactly.

Clive may well blissfully believe every word Sumner ever types, but when Sumner promises no staff will lose jobs, a week after the Administrator has already disclosed staff severance letters have been mailed out, I know who I am believing.

Maybe Clive also blissfully believes the "Terminated employment letters" below were just snazzy Christmas Cards? And that Sumner is right that no staff were lost, and the Administrator was outright fibbing?

Of course Sumner wants to talk things up, and tell the media what wonderful sales he had in the PAST, and they oddly swallowed that irrelevant PR history lesson - hook line and sinker.

Right now Sumner's word is his personal belief and hope, and has no bearing on what will actually occur at mossgreen, as his powers as a Director have been removed by law a week back, as can be seen above.

Lets hope it all works out
, that would be the best solution, but I have seen many such cases in the past go belly up. Witness Velvet, where everyone was glibly assured all was fine.

The ONLY winners are generally the Administrators and Lawyers who already have gobbled up about $200,000 of real money, and they have not even started basically.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Aladdin »

Are people who have consigned lots to Mossgreen for future auctions 'creditors' or simply unlucky customers who have to wait it out? If they're creditors, I'm wondering if they have to come up with a dollar figure for their goods (catalogue, estimate, market value or potential loss?), or if they'll simply be able to say 'They owe me a mint unhinged two quid first watermark roo stamp"?
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by langtounlad »

Aladdin wrote:Are people who have consigned lots to Mossgreen for future auctions 'creditors' or simply unlucky customers who have to wait it out? If they're creditors, I'm wondering if they have to come up with a dollar figure for their goods (catalogue, estimate, market value or potential loss?), or if they'll simply be able to say 'They owe me a mint unhinged two quid first watermark roo stamp"?
Probably will depend on whether they are held in trust or otherwise. Do not know enough about laws regulating auctions to answer this.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

langtounlad wrote:
Probably will depend on whether they are held in trust or otherwise. Do not know enough about laws regulating auctions to answer this.

Regards
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Absolutely ZERO requirement for Stamp Auction Trust Accounts in NSW and Victoria I have been advised pretty recently.

VERY odd I always thought.

Easy to lose every penny - 'legally'.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Kevin Morgan »

Further to Glen's post, applies to any kind of Auction other than Real Estate in Victoria since Jan 1 2000 when Auctions were de-regulated. No need for a licence since then either!
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by warm »

So the lesson is …

Do not have material in or bid in any Stamp Auction that does not have the appropriate Trust Accounts.

… isn't it just common sense

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by BigSaint »

Given that it is up to the Administrator whether the auctions are held & that there is no guarantee the auctions will be had, surely some one who consigned material to an auction can take it back now.

I am a little rusty on the rules surrounding Administrators but I think that I am right that if an Administrator continues to trade he is personally responsible for the debts incurred after his appointment. He opens new bank accounts & should be smart enough to segregate auction proceeds in an account separate to the administration trading account.

Having said that, if I had material at Mossgreen, I would be down there right now taking back.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

warm wrote:So the lesson is …

Do not have material in or bid in any Stamp Auction that does not have the appropriate Trust Accounts.

… isn't it just common sense
As far as I know, no Australian stamp auction is required by law to have trust accounts, which I always found was weird.

Cautious vendors I guess would want an up front guarantee payment, but only the major $$$ vendors could command that process I suspect.

The da Vinci painting that just sold that I outlined in current 'Stamp News' had a $US100 Million GUARANTEE to seller etc. If bidding 'only' reached $80 million, the seller got paid $US100m nett etc.

It had changed hands at only $US80m by Sotherbys in very recent times so a bold Guarantee!
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Kevin Morgan »

When I ran auctions I was never asked for a Guarantee, we did not hide behind a Limited Company, we always paid out on time unless there was a hold up with payment from purchasers or items on extension. We had some big time vendors and this included most major dealers.

The only reason we stopped was because it was so darned hard to make money except on lots owned by myself.

Glen and I both buy major lots and collections outright, no waiting to get paid, no commission. We take the risk that we can sell what we buy, but in the end you may still get more than you would have waiting 6 months plus for some Auction Houses to pay out these days!
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by traralgon3844 »

Is there a possibility of the Mossgreen group being broken up and depending on the structure of the company the various companies that were bought out/purchased ending up in the original owners hands once again?

Could this be a Kerry Packer - Alan Bond situation?
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

traralgon3844 wrote:Is there a possibility of the Mossgreen group being broken up and depending on the structure of the company the various companies that were bought out/purchased ending up in the original owners hands once again?

Could this be a Kerry Packer - Alan Bond situation?
I have no idea of the 'Golden Handcuff' deal wording that Gary Watson signed when mossgreen absorbed Prestige Philately.

Gary Watson is a trained lawyer, so I am sure it was specific. :mrgreen:

I do recall he was free to leave last August, as that was when his approx 3 year "Golden Handcuff" term was apparently up, which was no secret in the business, and I am not revealing anything not widely known here.

Very surprisingly to many, and to me for sure, Gary unexpectedly announced he was staying on, at around that August date.

It may well be he initially agreed in 2014 something like, that mossgreen had exclusive access to the Prestige Philately website, and client base, and goodwill etc, until latter 2017 etc.

If that is the case it might well be fine for Gary to re-open the doors there again, if he so chose to part ways? Nick Anning worked well with Gary for many years at Prestige, and continued on working with mossgreen, and I stress I have absolutely no idea what Nick's contract, or situation or tenure is there.

Gary lives out near Belgrave (previous Prestige office) as I recall, as I had a coffee/lunch at his home at one time, out near where the Prestige business was sited, and he had a decent commute to mossgreen.

So it MAY be that Prestige Philately could re-emerge if Gary moves on - who knows? That might well look like a Kerry Packer/Alan Bond scenario. Take the truckload of loot in 2014, and buy back the same farm for 3 Turnips in 2018, much as Kerry Packer did with Bond?

I've heard of another major movement rumour in the mossgreen stamp area in recent days, but can't commit that to print for sure as have not heard it direct from the party involved, and in Portugal now, and can't call!

However, I am of the view some philatelic deck chairs on the apparent mossgreen Titanic are now being re-arranged, that is for sure. :idea:

Well run, stand alone stamp auctions are a far better and leaner operation, than being a very minor part of a mass of other collectibles sideshows in my view.

We need solid ad stamp focused stamp auctions. Having a guy run them, who tours Mick Fleetwood, and runs chi-chi Tea Rooms, and buys NZ general auctioneers is not the base that works.

Stanley Gibbons London proved that to us in recent years. Their totally clueless Board purchased all kinds of totally unrelated businesses, paid way too much for them, and SG are basically broke today. :idea: :idea:

I've heard surprising details on mossgreen/Webb NZ in recent days, that sounds not good news if correct, and my comments above remain, that Sumner buying into that mess after even John Mowbray et al lost tons on it, was a dumb move. That was my view when I heard of it occurring, and history appears to have backed me up.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by wolseley16/60 »

Prestige sounds better than Mossgreen......

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by GJ50 »

wolseley16/60 wrote:Prestige sounds better than Mossgreen......
I bet Mossgreen own the name.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by GlenStephens »

GJ50 wrote:
wolseley16/60 wrote:Prestige sounds better than Mossgreen......
I bet Mossgreen own the name.
Depends on what the contract drawn up with Gary Watson in 2014 actually SAID I imagine. As I pointed out above, Gary is a trained lawyer. :idea:

And remember the Administrator is in there now to extract every dollar he can from wherever he can.

Regardless, in this country it all about knowing the collectors and dealers. And being trusted by them. And knowing stamps. :lol:

A trading name is just that. It can be anything. I never personally liked Prestige, nor mossgreen. There are a million better ones to select if Gary were ever to start up again himself, and I stress I have absolutely no idea if he is interested, as I am in Europe - he may of course be happy to sit back and play Golf or drive Rally Cars. :)

Some of the other stamp auction names chosen here were incredibly dopey beyond belief, such as "Velvet Collectibles".

If I started a stamp auction here, I'd be opting for - "Oceania Stamp Auctions".

But what do I know about Marketing. :lol:
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by traralgon3844 »

The information to hand states that Mossgreen has been carrying too much debt from previous aquasitions of businesses like Prestige, Torsten Weller, Leski etc.

Could these be sold off to reduce debt? If they are the likely buyers would be the previous owners. They are somewhat specialized businesses and there are not going to be many people putting their hands up to buy them.

As Glen said: "Regardless, in this country it all about knowing the collectors and dealers. And being trusted by them. And knowing stamps."

If these parts of the Mossgreen empire are to be shed, they may be in a position to do a Kerry Packer.
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Lakatoi 4 »

Paul,

It will all depend on the contractual agreements between Mossgreen and both Gary and Torsten. As I understand it, Charles Leski exited Mossgreen at the same time as Jack Gringlas and from posts above I understand Charles is working with Joel's in Melbourne so I doubt whether he's interested in reviving his business but who knows.

I don't think this question has been raised in this topic before but is any member here going to the meeting of creditors on Thursday :?:
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by BigSaint »

Lakatoi 4 wrote:Paul,

It will all depend on the contractual agreements between Mossgreen and both Gary and Torsten. As I understand it, Charles Leski exited Mossgreen at the same time as Jack Gringlas and from posts above I understand Charles is working with Joel's in Melbourne so I doubt whether he's interested in reviving his business but who knows.

I don't think this question has been raised in this topic before but is any member here going to the meeting of creditors on Thursday :?:
How recent is that :?:

He is still listed as part of the Mossgreen Team:
http://www.mossgreen.com.au/content/the-team/
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by GJ50 »

GlenStephens wrote: And remember the Administrator is in there now to extract every dollar he can from wherever he can.
Also the Administrator is there to:

1/ At the time of appointment put ALL DEBTS on hold.
2/ From that date "run the company as a going concern".
3/ Establish avenues of survival, selling assets etc etc

It is not a velvet situation where the owner had run the company into the ground. Had been locked out of their premises. I believe Mossgreen are still in possession and entry rights to all premises. Velvet as has been discussed was trading with no money and big debts. Never likely to survive.

As to attending the 1st meeting, it will probably be very short with little detail given as the Administrator would yet have all creditors info in.

[Having been in the sporting industry and having had attended a number of these voluntary administrations and/or liquidations, I gave up attending 1st meeting after the 2nd one many years ago as waste of time.]

The 2nd one will be when more becomes known as a full list of debts and creditors will be published and given to creditors.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Rod Perry »

BigSaint wrote:
Lakatoi 4 wrote:Paul,

It will all depend on the contractual agreements between Mossgreen and both Gary and Torsten. As I understand it, Charles Leski exited Mossgreen at the same time as Jack Gringlas and from posts above I understand Charles is working with Joel's in Melbourne so I doubt whether he's interested in reviving his business but who knows.

I don't think this question has been raised in this topic before but is any member here going to the meeting of creditors on Thursday :?:
How recent is that :?:

He is still listed as part of the Mossgreen Team:
http://www.mossgreen.com.au/content/the-team/
Brad :)
Max Williamson, Leski/Mossgreen former employee, now is employed by Joel.

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BigSaint
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by BigSaint »

That was my understanding Rod.

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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Global Administrator »

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GJ50 wrote: As to attending the 1st meeting, it will probably be very short with little detail given as the Administrator would yet have all creditors info in.
Gary as clearly posted above, the Creditors can if they wish replace this administrator at meeting #1 on Jan 4, - so many things CAN happen!

Also as clearly pointed out earlier above, that will cost mossgreen $200,000 or so to THAT point. Whether creditors toss them out today - or NOT.
Global Administrator wrote:
The all too familiar raping and pillaging of company monies is well underway.

BDO have already been paid for their work in advising Sumner.

They now advise in writing they will be paid out $200,000 inc. GST for their work up to the second creditor meeting in January, even if they are replaced by creditors - they will still invoice $200,000.

And the fun then begins.

The most junior of juniors - "Junior Cadet" charge out at $215 an hour plus GST to mossgreen.
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GJ50
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by GJ50 »

A comment from a person who attended the meeting today.

"they will have difficulty paying Vendor creditors unless Paul Sumner comes up with a Deed of Company Arrangement which will require major cash injection if going to Liquidation is to be avoided. This to be decided at Second Creditor meeting which to be 7th or 8th February. Sumner to provide Administrator with Arrangement document later this month.
Not pretty and several quite angry vendors (cars and furniture) made their feelings very apparent. The Age tried to attend and they were asked to leave but reporter hung around to see if any disgruntled creditors wished to vent their spleen. Check tomorrow’s paper to see if reporter was successful.
Whole thing is not going to be pretty."
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Lakatoi 4
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Re: Mossgreen Auctions - APPOINTMENT & 1st MEETING OF CREDI

Post by Lakatoi 4 »

Thanks for the update Gary.

I hope for the sake of their employees and creditors (particularly the vendors) that they can secure a backer and get back on their feet.
Tony
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