Melbourne solar company G-Store facing liquidation as 20 staff lose jobs
Staff realised it was no ordinary day at work when they turned up at their Melbourne offices to find they could no longer access the building.
EXCLUSIVE
Staff realised it was no ordinary day at work when they turned up at their Melbourne offices to find they could no longer access the building.
Men in suits told them the company had gone into administration and it was now under their control. The locks had been changed.
For a few days, the 20 or so staff continued to work before administrators let almost everyone go, keeping on just a skeleton crew to maintain the business. Then those staff members, too, were also let go.
That happened last month after Victorian solar energy provider G-Store appointed Philip Newman of insolvency firm PCI Partners as administrator to figure out how to pay the $3.8 million debt it had racked up.
“Staff were fully invested in that business,” one person with knowledge of the matter told news.com.au.
“For them to rip the rug out from under us is pretty disappointing.”
Creditors are raising the alarm over the company just hours before an important decision will be made about its fate.
An important meeting between G-Store’s more than 100 creditors is taking place at noon on Friday, where they will decide whether to get back a small portion of their debts or place the business into liquidation.
According to Mr Newman’s report to creditors, G-Store had been in business since 2007 but the company had accumulated large debts amid the economic downturn and also because its sole director Dion Epstein was battling a cancer diagnosis.
Mr Epstein’s father, Robert Epstein, is the director of one of G-Store’s secured creditors, Coltvale Pty Ltd.
Coltvale Pty Ltd has put forward a deed of company arrangement (DOCA) which is where they offer to buy back G-Store and wipe its debts at a fraction of the cost.
The DOCA put forward will give creditors 2.2 cents back for every dollar they are owed, if it is executed.
At the Friday meeting, creditors will decide if they will accept the DOCA or if they will place the company into liquidation.
Complicating matters further is that Dion Epstein personally guaranteed a number of loans so he is personally in debt to the tune of $1.182 million.
He is facing bankruptcy if the DOCA is not accepted.
In a statement to news.com.au, Dion Epstein said he was “bitterly disappointed” and “tremendously sorry” that his vision to move into solar powered homes had failed.
“I hope that we can all find a way forward and continue to work towards a more sustainable industry and a more sustainable future,” Dion Epstein added.
Some creditors have indicated to news.com.au they have no plans to vote on the DOCA and would prefer to bankrupt the director.
Chris Taylor, whose business Reclaim Energy is owed $200,000, said he would “go all the way” into bankrupting the director of G-Store.
“To walk away from $1.2 million worth of liabilities is just ludicrous,” Mr Taylor said.
Mr Taylor’s anger is compounded by the fact that he dropped off $100,000 worth of stock to G-Store on January 31.
Just two days later, G-Store went into administration. A report lodged with ASIC shows that G-Store was already in discussions with administrators when Mr Taylor dropped off his stock.
Dion Epstein told news.com.au that when the order for the stock had been placed, he was not in discussions with administrators and he intended to pay the debt.
“I had a meeting (with G-Store) on February 2 booked,” Mr Taylor recalled.
“I got to the front door and I got a message saying they can’t meet with me.
“By lunch time I’d been notified (that they were in administration), by 1pm I was standing in their premises.“
Mr Taylor said he rushed to the warehouse to recover his stock – but the administrators turned him away.
“$200,000 is a massive hit,” Mr Taylor lamented.
“Particularly when $100,000 is just sitting on the floor” in G-Store’s warehouse.
His company, Reclaim Energy, has started the process of taking legal actions against the administrators to reclaim what he says is his.
“I’ve got a personal guarantee on mine (the credit),” Mr Taylor added. “I’m happy to bankrupt him (Mr Epstein).”
Mr Taylor also added that he has terminal bone cancer but is still paying his debts and was unhappy with how G-Store had handled the situation.
A person with knowledge of the matter also raised some other concerns about G-Store’s descent into administration.
“There was this craving for larger and larger customer deposits,” they said, saying in some cases G-Store asked for as much as 60 per cent of the total cost of the installation from customers.
“The business was running for at least five years on customer deposits.”
On Consumer Affairs’ Victoria’s website, it says a “usual” deposit is 10 per cent of the total price.
Dion Epstein acknowledged there “were variable deposits from 10 per cent upwards” and said this was “depending on job size which is in line with the solar industry”.
“This was always agreed with the customer prior to the contract.
“The owners independently financed the ongoing capital costs of the business to a significant amount.”
Staff owed money
“What I will say, most staff have been there for some years and the amount of money they’re owed is significant. We’re talking tens of thousands of dollars,” the person added.
Of the $3.8 million owed to creditors, staff are owed the hefty amount of $437,000, according to Mr Newman’s report.
That’s from unpaid annual leave, long service leave, superannuation and redundancy payments.
G-Store hadn’t paid superannuation since January 1, racking up $24,000 in super debts to employees, Mr Newman also noted.
Of the total amount owed to staff, $123,000 is owed to the director, Mr Epstein, and his wife.
Strong family links
This person also noted G-Store’s strong family links with the business.
Mr Epstein’s wife lent $85,000 to the company to prop it up.
Meanwhile, a family trust is indebted to G-Store to the tune of $247,000.
It’s also understood Mr Epstein’s father-in-law is a landlord and owns one of the premises where stock is being held.
“The Administrators have control of the stock and the family have been cooperative with the administration process,” Dion Epstein said.
The administrator, Mr Newman, said technically the company had been insolvent since at least 30 June 2021.
However, he pointed out it was more likely the business had access to finance, most of it from the Epstein family, which meant it only became insolvent for a “short period of time” before going into administration last month.
Mr Newman has been contacted for comment.
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