Transport boss leaves trail of despair, $7m debt
WITH an unsecured $746,000 owed to him by Wadley Interstate Transport Services, Melbourne trucking operator Sham Puri isn't sure where he can turn next.
In the weeks prior to Wadley's going into liquidation, Sham signed an exclusive cartage contract with owner Grant Fowler on behalf of the family-owned SRK Transport.
But after what he describes as an initial verbal promise of weekly part payments, Sham said he has not heard from Mr Fowler since.
Although he's able to keep trading, a devastated Sham tells Big Rigs that the loss has put his family and business life under incredible strain.
He's also seen other subbies close to tears at the first creditors' meeting and has come forward with his story as a warning to others in the industry.
"I feel sorry for the other subbies who own one or two trucks who have been helping this guy out to grow his own business," Sham said.
"We started working for him in July or August last year and everything was OK at first and then he started to come up with all these excuses about why he couldn't pay."
Adding insult to injury for Sham is knowing that Mr Fowler has moved to Brisbane where he is the owner of the Brisbane-based transport company Mason Place.
Mr Fowler did not return calls or a text sent to him by Big Rigs requesting comment.
A search of the ASIC data base reveals that Mr Fowler's parent company the K5 Group is associated with two other failed transport businesses, Kayalla and Cavtar which both went into liquidation in 2014.
Two other companies with Mr Fowler as the director, Faulcon and Swanley, were deregistered the previous year.
Liquidator Stephen Michell from PCI Partners did not respond to our requests for comment.
But Big Rigs has obtained a copy of his detailed creditors' report which showed Wadley's owed more than $15m to creditors in early May - $7.6m of which were unsecured - and would still have a shortfall of $7.4m once the assets were sold.
The report also details how Wadley's still owes unpaid superannuation and other employee entitlements, and that the liquidator is investigating whether the company was trading when insolvent or engaged in unreasonably director-related transactions.
Big Rigs legal columnist Kevin Vierboom, Principal Solicitor, Fourtree Lawyers, said often businesses accept personal guarantees from company directors only to discover the company director has little or no assets.
"Companies become insolvent for a wide-range of reasons and the best protection for a small business is not to chase further work in the hope that the previous work will be paid for in the future," he said.
"Cash flow management starts with being aware how much a person owes your business at the end of the month. One way of managing this is to develop some break points in which your business carries out an evaluation of the risks in continuing with the supply of further services. It is unwise to chase business by extending further credit to a customer who already owes you a lot of money.
"An unsecured creditor is normally the last person to receive any benefit from a business liquidation and often the liquidation process is protracted."