Publishers call for new probe into collapse of media agency Hammond & Thackeray
Medical publishers are pressing for fresh investigations into last year’s collapse of media agency Hammond & Thackeray after being told they will not see a cent of the $1.4m they are owed.
Grim confirmation of the collective losses emerged in a liquidators report following the 35 year old health and agriculture media agency’s failure which also revealed there were “indicators” the business may have been trading whilst insolvent.
“The voluntary administration of H&T P/L was devastating for everyone involved. It came out of the blue, on the back of two months poor trading which went against many years of annual sales trends.” – Steve Robson
[Edited under Mumbrella’s comment moderation policy].
Given how much they appear to have owed staff members, H&T were either not allowing their staff to take holidays or neglecting their legal requirement to pay superannuation.
That and three ATO payment agreements are indicators of bad financial and management decisions. How many failed attempts had these guys made at buying other businesses? Not to mention being themselves part-owned by one of the large multi-nationals (who dropped them pretty quickly).
Not to mention that any business that “…traded successfully for more than 30 years” and struggled to survive 2 months of bad trading seems to highlight how inept these people were.
Very well reported, Steve Jones. The most accurate reporting I have seen to date on this matter. Keep going, there is so much more to this story!
Agreed.
This is the best article on the h&t meltdown.
Dear Mumbrella and Steve,
thanks for a good peice, well researched but can you please get my comments legalled and publish them?
In the meantime, any chance you can publish this sanitised version so people are not misled by some of the comments Robson has made to you.
1. How does Robson assess that there are only 3-4 people who are left as creditors who are upset? There were up to 20 at a recent creditors meeting. His comment that people are moving on is not true. Creditors are presenting evidence to the liquidator next week. Does he really think creditors just think ” Oh, yeah, no worries, take our money and start somewhere else…that’s cool…we get it”. It’s a ridiculous thing to be saying
2. The Judge in the Aeffect Case gave directions which indicated:
a) That likely Robson and Northam broke the shareholders agreement an corporations law in moving more than $1m of money out of Aeffect and into H&T. He was not conclusive because the evidence had not run, but he certainly sent a shot across their bow on this matter
b) He did direct that given what he had already seen it was likely that the sacking of Aeffect CEO Reginato would have breached minor shareholder oppression laws and he directed that Robson and Northam could not do that
c) Reginato in his statement of claim said that they were trying to sack him essentially to bully him or silence him on revealing the money movements.
d) Although we don’t know where this money ended up, if it was transferred to H&T at this time it is material to this matter. Why did H&T need $1m to be transferred to it, if as Robson states in your story all was good with the company?
3. Robsons email to a client in early January you refer to is very telling and will form a big part of evidence that things were constructed in a manner which is suspicious at best. In that email he sends to a major client he attempts to paint that HTG is a simple restructure and he makes no mention of the H&T $4.4m bankruptcy, which occured less than two weeks prior to this email. Who sends an email announcing that there business is ongoing but with a new name and a new ABN but fails to mention that their major trading company is now bankrupted owing $4.4m?
4. As a result of the above sort of activity, many clients are angry with H&T and HTG, not just creditors.
5. Part of the evidence being presented to the liquidator shows stone dead that business was shifted from H&T to HTG at the back end of 2017. I am not claiming this is illegal. I am not a lawyer. But it is a fact that a lot of business and clients that was in the past inside H&T ended up inside HTG, which was once called Aeffect, which had a major legal case running in early 2016 which ended in the CEO departing. So you feel a little safer to publish this comment, that does not prove illegality necessarily. But anyone would have to say, it’s highly suspect. And if not illegal, it is in my view, not right. If HTG is going to keep going and make money, why not pay back some of the creditors with that money? That hasn’t happened. HTG has been sold on to Black Dot and no one is getting paid anything from H&T now. As Black Dot points out there is no legal connection to them and Robson is not a manager.
6. Black Dot has in my view not acted with good faith here. But that is an opinion. Why? Because they have bought all the assets and IP and staff of H&T and they started trading on all those assets through their press release a few weeks back. But why should they trade on the misery of $4.4m worth of creditors who got stiffed in the H&T bankruptcy? Why do they get to make money from those assets and have no recourse at all the carnage, distress and poor behaviour that was H&T? Is it OK simply because they have no legal connection to that mess to use the assets of that mess to make money. If you look at it I think Black Dot should have thought with a little more corporate and social responsibility. They should not be profiting from the misery of the H&T mess. If they wanted all those assets cheap they should at least have some recourse to what happened in the past.
As the above comment suggests the H&T collapse is far from over. More is going to come out. Black Dot is sitting on the fence waiting to see if they got a good deal or not. Is that good behaviour?
More to come. There are lot more people affected, distressed and angry at how they have been treated than 3-4. That will come out.
Thanks
Jeremy Knibbs
Gosh this makes me so sad. For so many years H&T was such a successful agency.
I feel for all involved. The media agencies owed money, the employees, and even Steve and Tony.
H&T would be nothing without Steve and Tony’s expertise it would have been bye bye years ago!!! For the years that Judy Passlow and alike made money and plenty of it from H&T advertising i.e Steve and the hundreds of employees that were employed by them over the years and learnt from them. I think it’s time Mumbrella back-off. It’s clear you’ve been feed by Judy and her cronies. I don’t think this is a fair treatment of men that were trying to save their business and staff. They are now just trying to earn a living. Shame on you. There must be some other news you can find without it been feed to you by Judy.
A shame I can’t post anonymously like Judy! And my other post didn’t get posted maybe this one will. When will this witch hunt end? These two men made H&T what it was. They have given Judy and alike in advertising millions over the years. As well as employing and training hundreds of staff. Surely there must be other stories you can report on. Leave these men alone let them get on with rebuilding their lives, they deserve that. There is only 2 creditors driving this smear campaign. It’s cruel! Surely you can find other stories to write on instead of been feed by Judy and Co.
Viv, there is nothing anonymous about my postings – see below. Anon is not me I can assure. I am only too happy to state how I feel.I can see you are only too happy continuing to abuse the ‘ungrateful creditors’ as you and other staff did so publicly in the creditors’ meeting. I am sure Mumbrella readers will be interested to hear that you all thought we should be ‘grateful for Steve and Tony taking such great care of you for 40 years’. The lawyers and alternative liquidator said it was the most appalling behaviour they had ever seen in a creditors’ meeting and were shocked to hear it come from staff who had also been left unpaid. But then you all knew the government would pick up the pieces for you via FEG, didn’t you Viv? Nothing to worry about for you guys. Never mind that the rest of us who are trying to run our own businesses and pay our own staff are stiffed for hundreds of thousands of dollars, putting our own operations in jeopardy. How selfish of us.
Steve and Tony did not ‘give us millions over the years’! How deluded are you??? They GAVE US NOTHING. They engaged in business with us and vice versa. We paid them in fact. All they did was place media with us, just like dozens of other agencies over the 39 years that Tony Scott and I have run Medicine Today. It’s a symbiotic relationship. H&T – or rather Shirley Grainger in fact, who actually made the media decisions, not Steve and Tony – booked ads with us in return for 10% of the cost of each page. We paid H&T commission, just like a travel agent is paid by the airline for booking fares. Not the other way round. How could you not understand this simple fact as someone who works in the field? It was H&T clients, the pharma companies, that ‘gave’ us the millions, and they didn’t GIVE it to us Viv – they BOUGHT ad pages in our journals. Just like food manufacturers rent shelf space from Woolies to sit their wares on and sell them. Just like Qantas allows travel agents to keep a part of the fare for each trip they book. THE REST GOES TO QANTAS TO PAY FOR THE TRIP! All that money that over the years H&T sent to us when we invoiced them came from the pharma companies. It simply passed through H&T in the same way that a deposit for a property passes through the trust fund of a real estate agent. It never belongs to the real estate agent. It belongs to the vendor of the property. The money H&T collected from the pharma companies belonged to the publishers Viv, not to H&T. They had no right to keep it and spend it to keep their business afloat. It was not their money to use. They stole it from us.
Have I given you enough examples to help you understand what has actually happened here Viv? I cannot believe you cannot see why the creditors are so aggrieved! I can assure you that not all ex staff are so deluded.
I hope you have the same, and hopefully a much stronger regard for the founder of the firm, Peter Thackeray. Perhaps you might like to talk to him and see what he thinks about how Steve and Tony ran the company and destroyed what he had created with Paul Hammond. Yes, these two great men – ethical, decent men – created a great company. It took others to destroy it through poor financial management.
They didn’t “give” anyone anything. They booked advertising which they were paid for. Except in this case, they booked, they got paid, they didn’t pay.
And the whole thing stinks. Trading when insolvent, moving various assets, changing invoice details.
Either you are naive to the extreme or connected to the parties who you are defending.
Viv you seem like an illiterate person. The word is fed not feed. Are you an employee or a lover ?You seem very upset for these two men and not upset about all the money owed to so many people. As Judy said you got your FEG money paid to you by the Austalian Taxpayers we didn’t get a cent.
Kelly
Read the story
On what grounds do you feel sorry for steve and tony?
They went bankrupt owing $4.4m to 150 creditors
They aren’t paying anyone back!
Would have thought you might feel sorry for all those people who will never get their money back?
Steve and Tony aren’t paying anyone back
They walked away
They were in charge of the mess that ended up as H&T
I didn’t say I wasn’t sorry for those owed money, but I guess I somewhat know them in the industry and never thought they were bad people. So I just feel sorry for them in that respect. It doesn’t make sense and I never asked you to agree. It’s just my opinion.
It’s a sad day for the industry and those who won’t see the money owed. Suppliers and staff.
Kelly, you will be pleased to know that at this point most of the staff have been paid, via FEG, the Fair Entitlement Guarantee and I imagine the balance will be too. I am really glad for their sake as staff should never have to suffer losses at the hands of their employers, but at the same time it is so wrong that our government has so far had to stump up $435,103.00 to 17 employees to pay them out their long service leave, annual leave, pay in lieu of notice and redundancies! What kind of business does not make allowance for their staff entitlements and listen to the warning bells ringing when that money is not in the kitty, safely kept aside for their hard working, loyal staff? If you owe the ATO $305,607.00, your staff a total of $576,730.00, a factoring company like Scottish Pacific $737,000.00 and unsecured creditors $3,504,900, which includes trade creditors at $2,364,761 and hundreds of thousands of dollars of publishers’ money that didn’t ever belong to them and should have been handed straight to each publisher as ads appeared in their publications, do you really think they should be pitied, or do you think that just maybe they have demonstrated something a bit worse than poor money management? How does a company of this size come to owe so much money to so many people, most especially their own staff? You obviously have a very kind heart Kelly, and I admire that, but with respect I think your pity is misplaced here. The directors of this company do not deserve to be pitied. They deserve to be brought to account for their actions and mismanagement.
Well gee, Steve Robson, it never occurred to me that the fact we had worked in a professional symbiosis for over 30 years meant we should be grateful to you for running your client’s ads in our publications and not be upset about being stiffed for $108,000. How silly of me not to realise how lucky we were to be able to bask in your light for all those years!
So in your world, when your light goes out, we are all supposed to be snuffed out with you, is that right?
I hate to burst your bubble Steve, but I can assure you that there are a whole lot more than just 3 or 4 creditors who are upset with you. We the medical publishers know you want to believe it is only us who are angry, but I think you are forgetting all of the creditors who voted with us at the creditors’ meeting – 28 of them Steve, and there were a lot more that didn’t get their proxies delivered in time. Not to mention that more than half of those who voted your way consisted of staff, who had been convinced (falsely) that their FEG payments might be delayed if they didn’t vote the way you wanted them to, plus a bunch of surprise related entities that had not been listed on the original list of creditors.
You seem to imply that you went belly up because of two bad trading months that came out of the blue. Really? That’s a pretty stunning effort – clocking up several million dollars worth of debt in such a short time. Must be some kind of record, surely! If it was only two months of bad trading, why then did you fail to pay Medicine Today for advertising pages you booked into its June, July, August, September, October, November and December 2017 issues? By my count that’s six months of non-payment Steve. Six months. Plus the late payments before that.
Actually it wasn’t even H&T that booked those ads, was it Steve? It was your well respected contracted media buyer – a widowed single mother – and in the end you didn’t pay her either did you! Instead you kept not only the 10% commission, but our 90% and used it to trade on, along with the money that belonged to all the other publishers.
The liquidator, by his own admission, has had only a very superficial look at your accounts so far. He is skating on the carefully prepared surface. Let’s see what we can do about that.
The worst thing of all is that you didn’t even have the decency to apologise to any of us – your ‘friends’ of 30 years. In fact in the case of Medicine Today, you didn’t even have the decency to accept our many calls. That’s some relationship we had there.
“Those few people still being negative about the liquidation need to be reminded of these facts.”
-Yeah Steve, I guess being owed hundreds of thousands of dollars (which they’ve been told they are unlikely to recoup) may explain the “negativity”…what an unbelievable mess.
Kudos to the diligent reporting, covering multiple stakeholder viewpoints.
I worked at H&T and saw the “expertise” of these two firsthand.
[Edited under Mumbrella’s comment moderation policy].
Maybe Steve Jones should look into their time pre-2012, the acquisitions they made and the reasons why their FCB/Interpublic relationship failed?
This article, along with the others, focuses on how much the media losses out on.
It doesn’t talk about how much the staff where owed, which if you have actually seen the destruction they left behind is around $500,000… Thats a lot of annual leave for a small company to be accruing for staff. So it would appear that they had not been making super contributions either.
Or Viv, are you one of the staff caught up in this? In which case, you must have known the place was going down the toilet, as it couldn’t have been out of the blue, like Steve suggested. How does a company with a successful trading history for over 30 years struggle to trade through 2 bad months? No line of credit? No fallback? As company directors, Steve and Tony are responsible to the financial viability of the business. Let’s also not forget the breach of shareholders agreements by transferring money from one business to another… Pretty underhanded behaviour. What was that money going to be used for?
Appalling behaviour and poor fiscal management by the directors is inexcusable.
And sure, let them rebuild their lives. And in doing so, payback what they owe people.
Great reporting.
Why not also look at the business pre-2012. Some of the acquisitions were a diabolical mess. And what of their failed relationship with FCB/Interpublic?
And the “management” by Steve and Tony was abysmal to say the least. Stories of some of the management expenses would impress the likes of a Macquarie Bank executive.
For Steve Robson to say this is out of the blue, unbelievable. Why then was money moved from one business to another, clearly in-breach of a shareholders agreement? What was that being used for?
Why, with 30 years of trading history did it take 2 bad months to sink the business.
Viv is right in saying “These two men made H&T what it was.” Their poor decisions cost people jobs and they owe $4.5million. $500k of which is owed to staff.
They don’t owe me anything, I just think the actions of Steve Robson and Tony Northam are deplorable.
I read with interest the comments from various people on this article. I never take notice of anything “Anonymous” says anywhere about anything and personally do not believe their comments should be published.
Whilst quoted accurately in this article, my full quote also acknowledged that I was able to build a great agency because of help from “wonderful staff, the media and suppliers.” And back then, hard working partners. A successful agency is built on trust and valued business relationships with the staff, media, suppliers and of course clients.
I do not accept the naïve diatribe that the media have made so much money from H&T over the years they should stop whinging. This is fallacious to say the least. I have received many calls over the last couple of months and be assured there are a significant number of suppliers, media, clients and staff who remain disgruntled and disappointed with the way they feel they have been treated. Like most experience throughout life, not all are prepared to go public.
The facts are what they are and this article, is in my view, is factual, well researched and well written.
Hard to believe an agency as big as H&T could have a couple of bad months, not see this coming and be left with $19k in the bank and $4M in debts. Am sure pharma clients will not want to be associated with operators that take their money, don’t pass on to their suppliers and leave staff and the rest of the market carrying the can.
@viv
“smear campaign” + Judy and Co = ??
If my basic legal training serves me correctly that’s pretty much slander
Truth might be a defence of course.
Good luck with that Viv.
I note you failed to declare your ‘personal’ interest in defending Tony in this matter.
In any case:
* 28 creditors is not 3-4
* there are more than the 28 who are upset. About another 20 in total. And they represent nearly $2m in lost funds. Some include very major groups like QBE insurance and the ATO. Or do you think they’re cock a hoop at losing about $700k between them? That they are just getting on with things? They aren’t.
* add to that the pharma clients who are angry at how they have been treated in this matter…that’s at about 10 very big ones and counting. Or do you think that MSD would be happy that H&T spent all the money they sent to H&T in good faith to pay the publishers who ran their ads? Or that those that were told in early January that it was business as usual but with HTG not H&T and not told anything about the H&T collapse, that they took that well when they found out?
* now let’s figure how many people are involved with each creditor and each company who are actually pissed off with how they have been treated…it’s in the hundreds
This is a campaign to reveal the truth of what happened and how the directors acted, NOT a smear campaign by one or two people and cronies.
It is being conducted so this doe not happen again to other people who act in good faith and believe people when they tell them that nothing is wrong, as Robson did to a lot of the creditors.
If you are confident of defending your position that this is a “smear campaign” then please provide us some details Viv of how you assess there are only one or two people upset here and they are simply smearing Robson and Northam for no good reason. Provide your evidence, don’t just make random and slanderous statements.
On the creditor’s side there is a lot of evidence.
It is being presented to the liquidator next week.
There is a big pile of documents but here is one preview for everyone which goes directly to the behaviour and standards of the directors in this matter.
This is the word for word text of an email sent to a major Pharma client by Steve Robson, only two weeks after H&T went bankrupt owing $4.4m to their creditors and with only $19k cash in the bank. I think the readers of Mumbrella might be able to make their own judgement about what might be wrong about this particular communication to a major client of H&T.
Hint: Something is missing? What is it do you think? And why is that something missing?
Dear XXXXXXXXX (name removed for obvious reasons)
Great to catch up today. I thought I’d follow up our phone dialogue via email and copy in XXXXXX as per your suggestion (to make any contractual changes)
As of January 1, 2018 we have consolidated all of our services so that they can be offered under a single entity, the Healthy Thinking Group Pty. Ltd. This has meant that we have de-registered a number of entities, including our founding company, Hammond & Thackeray P/L.
The HTG will offer advertising, strategy planning and medical communication services throughout Australia and Asia – but will be under a single corporate entity instead of a number of entities. We believe that a more streamlined approach under a single entity will facilitate our internal communication which will, in turn, be better for our clients.
We believe that media is a specialised offer. As such, we will offer media planning via XXXXXXXX Media which offers a mixture of HCP and innovative digital media plans second to none.
Can you please advise your finance team to update our records as per below:
Healthy Thinking Group Pty Ltd
ACN 110075271
ABN 74 566 934 602
(please note: the Healthy Thinking Group is a trustee for Farmacomm Unit Trust and is listed as such on the ASIC website. I can provide the ATO download if you require ABN confirmation)
If you have any questions, please let me know
Regards
Steve
Steve Robson
Cheif Executive Officer
Hmmmmmm…
feels a little like Steve might have missed mentioning something material here….what could it be I wonder?
Oh yeah, H&T, the major trading entity of over 30 years you were working with just two weeks ago is actually bankrupt owing $4.4m and has nothing in the bank, and in that bankruptcy they managed to anger every single medical media group in the country and a couple of your peer companies. Minor detail I guess. Easy to forget.
How do you think this client responded when someone told them that detail Viv?
It gets worse Viv. A lot worse.
But hey, let’s keep pushing the ‘poor Steve and Tony’ line. And the line that they need to get on with their lives and everyone should leave these poor harrassed blokes alone. After all they were the heart and soul of H&T weren’t they? And what a great company it was. Sorry, the H&T stands for Hammond and Thackeray. Neither Robson nor Northam are responsible for the good that was H&T. I think history will find they are only responsible for the bad.
You’d do well in the Trump administration Viv. I hear they are constantly in need of new staff.
Cheers
Jeremy Knibbs
Crony
Readers, you might also have noted this sentence in Robson’s email to his client that Mr Knibbs (Crony) has so kindly provided above:
‘We believe that media is a specialised offer. As such, we will offer media planning via XXXXXXXX Media which offers a mixture of HCP and innovative digital media plans second to none.’
Gee whizzy, can anyone guess why Robson decided the tarted up new company would not offer media itself? Could it be because none of the publishers would ever deal with him or his company again and he was smart enough to figure that out?
By the way, I believe XXXXXXXX Media decided maybe working with this mob wasn’t such a bright idea after all, especially since they too were a creditor! Why get burned twice, right? Not to mention the look of it…
As one of the one of the publishing companies affected by the collapse of H&T, I guess I’m one of those negative people Steve Robson believes should be grateful for past business, and not worry about the fact that we are unlikely to see one cent of the money paid to H&T by pharma companies to promote their products through our publications in the past year.
As a small business that employs 10 people along with other freelancers and contractors, I guess I shouldn’t worry either that not being paid may well mean the difference between making a profit or a loss this year. It almost certainly means putting on hold projects we had hoped to invest in to grow our own business. And that means not employing people.
Thank you Mumbrella and Steve Jones for this factual report. The fallout from H&T’s collapse will continue to be felt for some time to come.
Hi Steve
” thankfully most people have worked out a path forward. This is due to the fact that H&T traded successfully for more than 30 years and over that time the vast majority of creditors received a lot of ongoing business.”
So on that logic, the $380k or so you owe the ATO is all forgiven because ….. you paid tax as a company for 30 years?
Well done mate. You’re a bloody legend!
The ATO just loves you and your business I’m sure for your ‘ongoing business’ over the years
Thankyou David Weston
Well said
And Ditto from me
Im a small business and this nearly ruined our business. It caused massive personal hardship to me and hardship for all our staff and its ongoing.
A close friend who was severely affected got very sick as a result of the situation they found themselves in.
But apparently, we have to be grateful to Steve and Co and we have all moved on. Im not sure how that logic works. I haven’t and never will
I will never forget how Robson lied to us and led us on until the end
He didn’t apologise or show any empathy for what he’d done at any time.
It’s crazy for people to be defending the behaviour of the H&T directors.
They have behaved in a manner which is reprehensible in all respects
Do you think they are the only one? LOL
Well done Mumbrella on the detailed reporting. The sad (and baffling) demise of H&T – a vibrant and leading agency in the healthcare & rural space right up until Peter Thackeray’s departure – is a lesson to the agency world. The sucess of an agency is the sum of the quality of its people and its management – with its management being held accountable for both successes and failures.
H&T under the direction of Steve and Tony, should have stuck to its bread and butter as a quality small business operation. From the minute the “HTG umbrella brand” was coined, it was downhill. Creating distinct specialist business offerings, and expanding to other geographiese can only be done sucessfully with long-term foresight & business acumen, good financials and the retention of high quality staff – all of which H&T was in decline of from the point they started the HTG strategy (if you can call it that – seemed like a lot of buzz words with little actual substance)
I hope the publishers and vendors have some success with their submission to the liquidators, and getting back what they are owed – and completely understand if they move foward with keeping a hawkish eye on their working relationships with agencies in the future.
I am left with many questions. In the article it is stated that Blackdot bought H&T in March 2018. Though the article did not state this categorically, Mr Callaway implied that Blackdot now owned HTG. Who owned HTG prior to Blackdot? How much was paid for HTG; if it is indeed owned by Blackdot? Mr. Robson stated that HTG was an independent entity that “worked with H&T.” What does that mean; exactly? What was the legal relationship between the two entities? H&T clients were “transferred to HTG by management.” Whose management; H&T’s, HTG’s, are they one and the same? It is not clear in the article. Was anything paid to H&T for the transfer of their clients? If not; wouldn’t that imply some sort of mutual ownership? I am sorry but the relationship described in this article between these entities is clear as mud. The article does not explicitly spell out the ownership of HTG before and after the liquidation of H&T. I think this a crucial fact in this story.
I have similar ownership question about Aeffect. It appears that, at least at one point, Aeffect was most definitely a separate legal entity from H&T. The article specifically mentioned that Aeffect investors Thackeray and Reginato initiated a legal case against management in late 2016 regarding the transfer of funds from Aeffect to H&T and HTG. The article then further states that this case was “settled” in early 2017. But earlier in the article, it was stated that Aeffect assets were transferred to H&T some time in 2017(?). I assume this happened after the settlement with Aeffect investors. What assets did Aeffect have when it was “transferred” to H&T? Was this part of the settlement with Aeffect investors? Since Aeffect was obviously a separate legal entity; did H&T buy the assets of Aeffect and if so for how much and when?
Finally I have many questions about the timeline. The article states that H&T had a settlement negotiated with the ATO in March 2016, this was later revised in February of 2017. Mr. Robson claimed that H&Ts troubles were the result of “a bad trading environment” in late 2017. I assume he was talking about Bayer and McCann, but if that is so why was a settlement required with the ATO in March of 2016 and again in February 2017? The article refers to the settlement with Aeffect investors which talks about cash transfers from Aeffect to H&T and HTG sometime in 2016. What was the purpose of those cash transfers? Why were they needed in the first place? Judy Passlow reported that H&T stopped paying Medicine Today in June of 2017. The article states that the settlement with the Aeffect investors occurred in “early 2017.” Did other creditors also notice a change in payment behavior by June of 2017? The timeline of events and the explanation of those events does not make sense to me and the article does a poor job of explaining the legal relationship of the various entities that played a role leaving me with many more questions than answers.
H&T lost the Bayer business well before 2016.
I’m betting that anyone who worked at H&T over the past 7 years (and got out) can’t be all that surprised by this mess – I guess the real shock is in the lack of ethical business conduct shown by management. Steve and Tony liked to toot their horn about agency team culture & mentorship, but with the example they set, is it any wonder why so many good people left?
As someone who remembers Paul Hammond with affection and gratitude, and recalling his long and distinguished career in healthcare advertising, I was very sad to hear of the passing of the agency which bore his name.
As a writer who worked for Paul in several of his earlier enterprises as well as H&T and Inceptiv, I feel for the staff whose loyalty went unrewarded and for the suppliers who have suffered from this collapse.
I hope our industry learns from this sad situation and that the people whose lives have been affected can pick up the pieces and move on successfully.
“Robson, who declined to answer a series of specific questions relating to events,….”
Yep – that kind of says it all, don’t you think?
Any update on this story?
The investigation, and comments, have provided some great reading. Keep up the good work!
Yes, agree with DD, is there any update on the happenings with this story?
I was a creditor of H&T having done some contract work for them. I have been reading the blogs and feel I must say something as there are a lot of inaccurate accusations being thrown around. So let me back this up with some specific points:
1) Implications that assets were stripped out of H&T – COMPLETELY FALSE. In the 18 months leading up to the liquidation Steve and Tony put in almost $800k of their own funds into the business. Why do that if you are trying to strip assets?
2) Implications that staff entitlements or superannuation were not paid – COMPLETELY FALSE. All staff were fully paid up on salaries and expenses and their super contributions. The main reason for the high employee liability was redundancy payments with a lot of long term employees. (No company provides for redundancy payments on an ongoing basis). Also note that as Directors Steve and Tony lost all their entitlements while all other staff did receive theirs albeit from the Fair Entitlements Guarantee.
3) Comments around “they must have known” – its important to distinguish between ‘business being tight’ and knowing you are likely to go insolvent. Business had been tight for a long time. In 2015/16 the group had a significant restructure and incurred a big loss. The following year (2016/17) they made a small profit so while things remained tight the indications were they were trading themselves out of the hole. Historically Oct/Nov/Dec has been their busy period where they essentially make their profit for the year. Last year Oct was down and Nov was terrible. The fact is that if they had just had an Oct/Nov revenue that averaged previous years they would still be trading today. This is the context of Steve’s comments that it “came out of the blue”. Sure things had been tight for the last 18 months but it was Nov that tipped them over the edge and that was unusual and unexpected
4) Implications they were trading while insolvent – COMPLETELY FALSE. From the moment they realised that things had moved from “business being tight” to “a reasonable chance of going into liquidation” not a single liability was incurred that was not paid. All staff were paid Dec salaries, contractors paid for work they did etc
5) Comments that they “should have told us (creditors) earlier” – Seriously, there is no way they could do that. The moment they tell anyone (clients or creditors) business is tight its all over. While they were focussed on trading their way out of the hole they had to portray a positive image.
6) Accusations of unethical behaviour – this is really around incurring liabilities with no intention of paying them. I come back to my first point, why would Steve and Tony put in $800k of their own money if they thought the company was going to go insolvent? No, this demonstrates they were firmly committed to keeping the business going and believed they would do so
7) Continuing to trade under HTG (and renaming aeffect etc) – contrary to everyone’s opinions there was no devious agenda behind this, rather Steve and Tony actually deserve a lot of credit. Knowing the company was going into liquidation there were 2 options:
i) Close the doors on 22 Dec and walk away. With no notice staff would realistically not earn anything in Jan (take a while to find new jobs) and clients would be let down with their jobs not being completed (Ironically December was a strong sales month, which is normal, so there were a lot of jobs in progress); or
ii) Re-engage staff as contractors in Jan/Feb to complete jobs for clients. This benefitted everyone. Clients got their jobs completed, most staff got some work in Jan and Feb that bought them some time to look for new jobs, a group of about 10 staff were taken over by Blackdot and no creditor was worse off (any suppliers engaged during this period were paid). This was why Steve was telling clients after liquidation that it was business as usual, meaning their jobs would be completed. Did Steve and Tony benefit from this? Hardly anything, they earned a small amount as contractors themselves in Jan and Feb and Steve was one of the persons to move to Blackdot. But apart from that they got nothing. Profits from those jobs went back to essentially fund the liquidator and liquidation costs. For Steve and Tony it would have been far easier to walk away at 22 Dec, but they implemented this plan with the primary purpose of looking after their staff and clients without disadvantaging any creditor.
I can understand the financial impact H&T’s liquidation has had on many people and their right to be upset and ask questions. There were clearly some poor business decisions made and I’m sure Steve and Tony would acknowledge that (things are always easier in hindsight). But I draw a line at people questioning their integrity and commitment. They put everything into keeping the business going, including their own money, and ended up the worst off out of everyone (financially and emotionally).
Lastly, none of what I have mentioned above is new, this has all been disclosed by either the liquidator or Steve. Unfortunately many people have chosen to ignore the facts and just take cheap shots.