Business failure: Gold Coast marketing firm Vivid Obsession Group collapses, leaving behind debts of more than $781,000

A Gold Coast marketer has revealed why his business went bust, leaving behind debts of more than $781,000.

Kelsie Smith, pictured at his office in Southport Central. His company Vivid Obsession Group went into liquidation last year.

A GOLD Coast marketer has blamed an increasing number of clients failing to pay their bills and “staffing issues” for his business going bust and leaving behind debts of more than $781,000.

However, the liquidation of Vivid Obsession Group, run by managing director Kelie Smith, has not stopped another company emerging to operate a similar business from the same address in Southport.

Vivid Obsession Group traded as VO Group from 2014 from its base in Southport Central.

Clients included Stone Group Lawyers, Affinity Education Group, Bambini Early Childhood Development, Coomera City Centre, Eco Tan, Meriton and Nimble.

Mr Smith called for a creditors’ voluntary liquidation — which is where a company cannot pay its creditors in full and is insolvent — on November 8 last year.

Kelsie Smith, pictured at his office in Southport Central. His company Vivid Obsession Group went into liquidation last year.

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Liquidator Jarvis Archer, of Revive Financial, said in a report filed with corporate regulator ASIC that the company failed because of the “substantial debt” owed to the Australian Tax Office and the debt recovery action undertaken by that agency.

Also on November 8 the Vivid Obsession Group business was sold to VOG Holdings Ltd with a balance owing of $12,013 at the state of the liquidation. The balance was later repaid. Mr Smith is the sole director of VOG Holdings, which was set up 10 days before the liquidation action was taken for Vivid Obsession Group.

VOG Holdings now trades as VO Group.

Mr Smith, in a written statement to the Bulletin, said his business was “very successful” early on, blaming an increasing number of clients failing to pay invoices and “staffing issues” for the recent collapse of Vivid Obsession Group.

VO Group managing director Kelsie Smith pictured with Ariana Margetts and Daniel Fowler at the GC Business Week wrap party at Nineteen The Star Gold Coast. Picture: Regina King

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“The company worked hard to pay all debts prior to the appointing of the liquidator,” he said. “However, despite these efforts the debt that had accrued due to the previous difficulties, could not be paid to creditors in full within the required time frames.”

Mr Smith denied calling in liquidators to avoid paying the tax bill.

“When I first became aware that the company could not pay the debts in full I sought professional advice,” he said. “I acted in accordance with this professional advice I received and appointed a liquidator.”

He said he learned a “tremendous amount” from the company’s liquidation.

VO Group is a marketing and public relations agency in Southport.

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“Having the right professionals involved in your business is key and has now led us on a new path for success,” he said.

“As a young entrepreneur and starting a business at an early age, I didn’t have the right people involved or received any guidance. I advise all young business owners and future self-employed people to seek the right advice.”

The liquidation of Vivid Obsession Group was finalised in June, with gross assets of just $16,000 realised.

Creditors, including the ATO (owed more than $700,000), ICON Home Services ($1815), ACCPROP ($3025) and A1 Signs Designs & Graphics Pty Ltd ($13,648), received no return.

Mr Archer said the voluntary liquidation was a result of the ATO issuing a statutory demand to recover the tax debt. He said that demand expired “on or shortly prior” to the date of his appointment.

He said he had filed a report to ASIC under section 533 of the Corporations Act.

“This report detailed my investigations into the affairs of the company. I note this report is subject to privilege and is not available to the public. ASIC determined not to take any further action in respect of the matters included in my report.”

Mr Archer said he was confident the business sale price was fair, although it could not be disclosed for confidentiality reasons.

“From the investigations carried out in the liquidation, I determined the sale to be conducted in accordance with the independent market valuations of the business and assets obtained by the company at the time of sale. Accordingly, I considered the price paid by the purchaser was adequate.”

VO Group’s head office is in Southport. It also has offices in Melbourne and Auckland, NZ.