No Standing, the digital marketing agency that went into liquidation earlier this year, is likely to have been insolvent since the start of the 2021 financial year, according to an investigation.
Liquidator Daniel Juratowitch of Cor Cordis said his preliminary view was that the company was "likely insolvent" as of July 1, 2020, and remained so as of his appointment, May 1 this year.
"From my review of the company’s books and records, its financial difficulties are apparent from at least 30 June 2020," he said in his report to creditors.
"The director and/or former director may have breached their duties/contravened the Corporations Act 2001 with respect to trading whilst insolvent and other general duties of a director.
"The director (Sohan Karunaratne) attributed the failure of the company’s business to the impacts of the COVID-19 pandemic and the loss of key clients."
The Melbourne-based agency was founded in 2016.
No Standing co-founders Sohan Karunaratne and Richard Penny , chief innovation officer Scott Cleaver and chief operating officer Dimitri Mutombo are listed as unsecured creditors.
The liquidator said estimates show realisable assets of just over $10,000 and liabilities of more than $4.4 million.
Outstanding employee entitlements are estimated by the liquidator to be $462,837.04.
Juratowitch said the Australian Tax Office (ATO) had lodged a claim for $356,728.57 for the Superannuation Guarantee Charge.
"This amount is significantly higher than the outstanding superannuation entitlements disclosed by the director. I have not at this stage undertaken a verification of the company’s outstanding superannuation entitlements," he said.
Staff who spoke to AdNews anonymously reported a pattern of late payments and missing superannuation was common at the agency.
“Over the course of five or six years, they’ve owed staff superannuation. They went on a payment plan with the ATO about five years ago, but didn't stick to it. They've never paid staff on time," a source said.
"I was always paid late ... I'd be shocked if my superannuation ever turns up," another insider told AdNews.
Juratowitch said the director of No Standing has agreed to contribute $30,371.49 to the professional costs in connection with the administration, but that "these funds have not been received yet".
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