Sydney company collapses into liquidation owing $2m, just $6 left in bank account

A company involved in the construction sector collapsed with just $6 left in its bank account and now owes creditors more than $2 million.

EXCLUSIVE

A company involved in the construction sector collapsed with just $6 left in its bank account and now owes creditors more than $2 million.

At the end of last year, NSW-based All Safe Lifting Equipment Pty Ltd appointed liquidators.

The family business, which was run by father and son duo Stephen and Troy Sargent, provided supplies and inspections for lift installations and was headquartered in Sydney.

In November last year, the entire venture plunged into liquidation.

All Safe staff were informed that their employment had terminated by being provided with the business card of the appointed liquidators, Daniel O’Brien and Danny Vrkic of restructuring firm DV Recovery Management.

But just days later, they were re-employed through another business, solely directed and run by Ann Sargent, the mother of Troy and wife of Stephen, in a move that left former employee Chris* devastated.

Staffs’ payroll switched to a different entity called ASG Co Pty Ltd, but they were doing the same work, Chris said, at the same location. The business opened another superannuation fund in his name.

Troy Sargent told news.com.au his mother’s family had funded this new business, ASG Co Pty Ltd, which he was now working for. He said his father Stephen does not work there and has nothing to do with the new business. Local sign-writers have been contacted to remove signage which still advertises for All Safe at the location, he added.

All Safe went bust at the end of last year.

The liquidators of All Safe found there was no evidence of illegal phoenixing activity, nor does news.com.au suggest any phoenixing occurred.

“I am not an owner or director of the new company and I have no input nor access to the company’s finances,” Troy Sargent said.

According to the statutory liquidation reported lodged with the corporate regulator, ASIC, the company has total liabilities worth $2.028 million and assets of only $5000.

Of its debts, $1.7 million is owed to creditors, with $1.2 million of that owed to the tax office.

Around $240,000 is owed to staff from annual leave and unpaid superannuation.

“I started looking for another job,” Chris said once he realised he may lose his superannuation.

As to Chris’ unpaid leave, he has applied to the Fair Entitlements Guarantee, a government scheme to reimburse workers impacted when a company, but four months later is still waiting for his money to come through.

Superannuation is not covered under the scheme and it is considered an unsecured debt.

“I sympathise with them (staff),” Troy Sargent said.

“I really feel terrible for any former employee who has lost their super. It’s the last thing I wanted to happen.”

Signage still remains at the head office, even though a new company now runs it.

“For the last 12 or 18 months (it) seemed to be running on the bones of its arse,” Chris added, explaining they would have to pay upfront for most of their orders as suppliers got skittish.

At the same time All Safe was struggling, its directors were seen arriving at the company’s premises in expensive cars.

According to the liquidator’s report filed with the corporate regulator, the company had a number of cars under finance including a RAM truck with a $95,000 debt owing, an Audi with $112,000 outstanding and a Holden Commodore with $126,000 remaining to be paid.

Troy Sargent said he drove the Holden Commodore while his father Stephen drove the RAM “which is required for towing and is used for rural jobs”.

Another family member drove the Audi Q5, he confirmed.

Claims of insolvent trading

The liquidators also alleged in that same report filed that All Safe “may have” been trading insolvent since late 2019 but only closed down four years later.

Directors who trade insolvent may be personally liable for the debts incurred after that date.

Mr O’Brien noted in the report that they could have a case for an insolvent trading claim against the Sargents in the vicinity of $1.5 million.

Neither ASIC or the liquidators have taken action against the company or directors.

Troy Sargent strongly denied that the business had traded insolvent.

The failure of All Safe was blamed on a flow-on effect of the Covid-19 pandemic as well as being crippled by workplace fraud a few years ago.

“In 2018 the company identified an alleged fraud committed by an employee,” the liquidators wrote.

“According to the director, this had a substantial impact on the business being a loss of data, clients and legal fees incurred pursuing the individual.”

They eventually received $50,000 from the employee over the matter.

Mr Sargent said that the alleged fraud led “to legal costs of circa 300k and what turned out to be a loss of over 1m in turnover a year.

“We really didn’t see the effect until periodic jobs weren’t going ahead, being delayed, cancelled or not contracts not renewed.”

News.com.au contacted the liquidators for comment. News.com.au attempted to contact Stephen and Ann Sargent through Troy.

Name withheld over privacy concerns

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Originally published as Sydney company collapses into liquidation owing $2m, just $6 left in bank account