Enterprise cloud giant Salesforce.com has been caught in the collapse of private training provider Careers Australia Group and potentially more technology suppliers, big and small, might be wandering in the debris field.
Careers Australia entered voluntary administration in May shortly after it was stripped of accreditation for federal funding support. Administrator PPB has so far uncovered total debts of over $150 million.
Salesforce.com was one of Careers Australia's top three unsecured creditors with outstanding invoices totalling $440,000, according to voluntary administrator PPB’s latest creditor’s report. Salesforce declined to comment on the situation citing company policy preventing it from discussing individual customers and ongoing legal matters.
CRN has discovered more major technology brands listed in Careers Australia’s Personal Properties Securities Register (PPSR) within the creditors report including ASX-listed Data#3, Siemens, a clutch of Schneider Electric’s local subsidiaries, the finance arms of HP, IBM and CSG, and JB Hi-FI.
It also contains a handful of smaller home grown suppliers including Melbourne-headquartered outsourced device-as-service and training specialist CompNow, and broad spectrum cloud, infrastructure and cyber security provider, The Missing Link.
It should be stressed that a PPSR is not a substitute for a creditor’s list — which PPB has limited to the top 10 creditors in Careers Australia’s case — and does not necessarily indicate that the entities it lists have lodged claims against the company with the administrator.
Broadly speaking, entities register claims on the PPSR when they open a trading account to guarantee recognition of claims to recover assets or goods that have not been paid for — or to company assets in lieu of debt — either as a precaution against or in direct response to insolvency events.
However, CRN has confirmed that two technology suppliers on the PPSR have, to some degree, been left exposed in the wake of the training provider’s demise.
Australian cloud and ICT giant Data#3 has lodged a proof of debt with the company but it’s chief financial officer, Brem Hill told CRN the company’s exposure was very low.
“Data#3 is a creditor for a small amount of money, so we have simply filed a proof of debt with the administrators – definitely not a significant issue,” Hill said.
The Missing Link has held supplier contracts with Careers Australia subsidiary Workstar Pty Ltd since before it was absorbed by Careers Australia. The Missing Link chief executive Alex Gambotto declined to provide a detailed comment. However, he said that The Missing Link’s relationship with Workstar remained strong and constructive, and that a favourable outcome to resolve the current situation was “highly likely”.
“I’m confident that there won’t be any negative impact on our business. We have partnered with Workstar for many years and our negotiations with them to resolve this situation have been very positive,” Gambotto said.
PPB successfully sold the Workstar subsidiary within 21 days of its appointment. The terms of the sale were confidential but it listed “continuity of service” as one of the key benefits of the sale.
The remainder of the companies listed in the Careers Australia PPSR that CRN contacted did not respond to requests for comment.
PPB said that 40 secured creditors had lodged 226 security interests on Careers Australia’s PPSR and that it was still investigating their validity. To date debts to secured creditors exceed $118 million and the company entered administration owing over $16 million worth of employee entitlements.
PPB has formed the view that one the key reasons for Careers Australia’s troubles was it inability to obtain a Vet Student Loan licence that was a condition for the entry of a white knight injection for the company to repay the federal government $40 million in VET-FEE payments it had received in advance.
PPB is still investigating whether the company traded while insolvent but formed the view Careers Australia it satisfied eight of 14 insolvency indicators used by courts. However, it said that a liquidator would have stronger powers to investigate insolvency questions should the creditors vote for the company to be wound up.