Administrators say cattle baron Sam Mitchell faces $6.6m alleged insolvent trading cash call

An administrator’s report says creditors to Sam Mitchell’s WealthCheck business are likely to get back just 4c in the dollar on debts allegedly accrued.

WealthCheck boss Sam Mitchell boarding a flight before the collapse of his cattle business.

Would-be cattle baron Sam Mitchell’s agricultural empire was allegedly insolvent as of at least July 2018, with an administrator’s report revealing the deal-maker’s company had run up millions in debts to creditors, clients and the Australian Taxation Office for years.

A new report published by Worrells reveals Mr Mitchell’s empire is now worth so little that creditors are likely to see just 4c in the dollar due to the huge debt load assembled by the former Bondi businessman’s company.

The report, prepared by Worrells administrator Mervyn Kitay, warns Mr Mitchell is facing $6.6m in debts, revealing his mooted deal to rescue his ailing empire has failed to appear.

“It was apparent from my recent discussions with the director (Mr Mitchell) that the level of financial contribution that would likely be required for a successful (deed of company arrangement) proposal, could not be achieved,” Mr Kitay said.

“Accordingly, given there is no DOCA proposal for creditors to consider, this limits the possible outcomes for the future of the company. My recommendation to creditors is that the company be wound up.”

The administrator’s report covers just Mr Mitchell’s WealthCheck Management business, which was the brains trust of his cattle and agricultural empire, with Mr Mitchell routing much of the staffing needs of the operation through the entity.

This has seen the business build up a huge tax debt to the ATO as well as unpaid superannuation entitlements to staff.

The administrator’s report reveals WealthCheck Management owes at least $7.5m, with just $4.1m in potential assets.

However, much of this is tied up in unpaid bills to agricultural assets in Mr Mitchell’s orbit, many of which are controlled by investors who refused to pay up amid disagreements over management of their properties.

Administrators said at least $2.79m in unpaid trade creditors debts.

The report notes at least $1.2m is not collectable, with administrators saying they were considering pursuing potential outstanding debts.

Worrells finds WealthCheck has been in trouble since at least July 2018, but the financial crisis facing the firm intensified in August 2022 when no payments were made to the ATO on GST or PAYG taxes.

“It therefore would have come as no surprise that the ATO commenced an application to wind up the company based on outstanding taxation debts of (about) $3.78m,” Mr Kitay said.

Administrators said Mr Mitchell’s business had allegedly not allowed “for sufficient profit to be generated”, and that this structural issue “combined with shortcoming in management and collection of debtors” were WealthCheck’s primary reasons for failure.

Sources indicate WealthCheck’s tax debts are part of more than $9m in payments owed to the ATO across several entities linked to Mr Mitchell.

The report says WealthCheck missed payments to the ATO in July 2018 and from then on failed to lodge tax statements or pay its obligations. This came despite Mr Mitchell inking cattle and agri deals worth in excess of $500m, with key names including Brett Blundy, Harold Mitchell and Danny Thomas.

Many of these widely publicised transactions failed to complete but a drum beat of positive coverage encouraged new investors to strike deals with Sam Mitchell.

Several recent purchases involving him have also soured, with the 521,883ha Limbunya Station and 147,300ha Maryfield Station for sale through Mr Thomas’s LAWD.

The alleged insolvent trading may prove costly for Mr Mitchell, with company directors liable for debts incurred from the date of insolvency.

“My preliminary investigations indicate a suspected date of insolvency of July 21, 2018. Based on this date, I have quantified the potential insolvent trading claim at approximately $6.64m,” Mr Kitay said. “I am not aware of any defences available at this time.”

Mr Mitchell did not respond to requests for comment.