They say they were brought in to do work when the company was on the brink of collapse, but the man they're taking aim at says he's a target simply because he appeared on Celebrity Apprentice.
To Australian TV audiences he's Mark Bouris's right hand man - a business expert on the show Celebrity Apprentice.
But in the real world it’s Bradley Seymour who’s under fire.More stories from Today Tonight
Bouris’s TV offsider and head of retail and marketing at Yellow Brick Road is director of another company, which not only went bust, leaving scores of people in financial hardship, but is accused by the liquidator of trading while insolvent.
Insolvent trading is illegal, with penalties of up to five years’ jail. Now there are a lot of people who want him to feel the force of the law.
Scores of mums, dads and small business owners are chasing money owed to them by the business venture called Earth to Air Systems.
Bradley Seymour was a director in the geothermal air conditioning company, but pulled the pin when it ran out of gas.
According to him, there $1.2 million owed to creditors.
“My involvement was based on a dream,” he said.
The dream went sour. Seymour blames a soft market, but others blame him and his fellow directors.
Gary Rite is 30-years-old with a small business. He did $28,000 worth of air-conditioning work for Earth to Air Systems, but was never paid.
“I go home and I see that idiot on the tele trying to tell people how to run their lives, you know, how to make money - the ‘financial guru’ - when he owes me 28K,” Rite said.
“It has damaged my relationship with my partner, I've lost a house deposit. It has pretty well ruined me,” he said.
Rite understands that companies go under, but what he can't cop is the liquidators report which stated Earth to Air Systems was trading insolvent.
“They have engaged me knowing full well I was never going to get paid. They were going down the drain, and they have grabbed a whole handful of people and are taking us with it,” he said.
Shaun Inglis is the manager of Air Technology Tasmania. He has spent more than six months chasing his money from Earth to Air Systems.
“We've lost just under $40,000. we completed work in good faith, and never received the money,” Inglis said.
“There is no excuse for it. if we go and do work for a customer, we make sure we do the right thing, we do what we say we're going to do, and we expect to get paid for it. There is no excuse for engaging contractors and not being paid.”Seymour feels his role on Celebrity Apprentice has made him a target.
“I now am the one person, the one person that this is all shooting back to as the responsible person,” he said.
“It seems, not ironic, but unfair that the only person being held responsible for this is Brad Seymour.”
It is true that there were other directors in the failed Earth to Air Systems. One of them is Stephen O'Keefe. Ironically he’s a chartered accountant with PKF Accountants, who specialises in insolvency issues.
So how did the business celebrity and the numbers man get it so wrong?
The dispute they were trading while insolvent, but the creditors take a different view.
The Australian Securities and Investment Commision states a company is insolvent if it is unable to pay all its debts when they fall due.
Bill and Stephanie Pegus were chasing their debts for months.
“We were constantly contacting them for payment, and it wasn't coming,” they said.
“They used every excuse they could come up with. For example I'd ring up and say ‘I haven't received payment’. She'd say, ‘oh I got your email but I couldn't open the attachment’. All these delaying tactics were constant.”
Earth to Air used Bill and Stephanie’s apartments for contractors that were working in Tasmania. They lost $3,600 and, down the road, another motel is looking for their money.
Danielle Midson looked after Earth to Air clients at the Martin Cash motel for a month. Then, they just left.
She says she’s owed $2,500, and that they checked out and never paid.
These creditors represent a handful of victims. Across the country there are many others, and the amounts they are owed ranges from a couple of thousand to $175,000. And it galls all of them to see one of the directors dishing out financial advice on TV.
“This is the real world we are talking about here. Today, and in the real world, I have lost money, my fellow directors have lost money, and our creditors,” Seymour said.
Despite the fact that he says it was not his intention “to ever be seen as a financial advisor” Seymour does play the role of a financial guru on reality TV.
He also charges $6000 an hour on the public speaking circuit to talk about being successful in business.
Rite finds it all a bit rich.
“I'd fire him. Mark Bouris should fire him as his sidekick because he is not very good at his job. That's for sure,” he said.
Seymour is no longer with Bouris on television, but in business they are close. Seymour earns close to $300,000 a year as the head of marketing for the financial services business, Yellow Brick Road and serves as a director on a number of Yellow Brick Road subsidiary businesses.
Seymour strenuously denies the notion his company was trading insolvent. We contacted the Australian Securities and Investments Commission - it doesn't comment on operational matters.
Bouris is standing by his embattled executive.Response statement from the directors of Earth to Air Systems Pty Ltd (In Liquidation)
Thank you for the opportunity to discuss the above matter and the story that you intend on running. Whilst I accept your reasoning behind your examination of this matter, I do find it quite difficult to understand why this business has been set apart from the many others that find trading difficult in these difficult economic conditions. I note for example the company in similar industry that went into liquidation owing $30m.
Earth to Air Systems was established in 2006 recognising the importance of providing high efficiency applications to assist in the reduction of greenhouses gases and to assist individuals and business in achieving operating cost savings. I have viewed many stories on your own program that have highlighted the need for these and government at all levels encourage the start up of like businesses.
We had built the business to have significant turnover and had successfully installed the product in a number of high profile projects. We had a very solid order book as well as exceptional prospects for future growth through capital investments.
The business was funded through shareholder capital and the major shareholder and Chairman; John Gagliardi put his entire life works into the business as they believed so strongly in it. As somebody in his senior years, he has been forced back into employment as he has have lost everything including his superannuation. I myself never drew a wage from the business, getting through from past savings and equity. No other director took anything from the business at any time. This is supported in the business records.
I refer specifically to the report to creditors dated 29 July 2011 relating to Earth to Air Systems Pty Limited and to statement in section 4.4 of this report that their may be grounds for action with respect to insolvent trading. The Directors of Earth to Air Systems refute this claim. As a group, we systematically and regularly reviewed the financial position of the business. We have supporting minutes to prove this. We submitted supporting documents to the liquidators that included detailed summaries of directors capital injections; details of debtors and aged debtors, and details of signed mandates for external capital raising. This submission was never acknowledged nor receipted and was not included in any reports by the Liquidators.
We also note that during the period where insolvent trading was falsely claimed, we had completed a BSA audit of the business to gain a QBSA license, which we were successful. Fundamental to the issuance and maintenance of that license is the company’s ability to pay its debts as and when they fall due. As you would be aware, a company trading insolvent would not be able to gain a license under this regime.
As you would also be aware, solvency of a business can be achieved through external capital and financing sources, as well as from business revenues. As such, we note the following that contributed to the ongoing solvency of the business.
During entire operation of the business, the Chairman John Gagliardi regularly funded the business through its growth phase. This involved regular capital contributions to the business that continually met the financial operational obligations. This included the period that claimed insolvent trading was claimed where in excess of $1M was injected by Directors from November 2009 onward with capital being put into the business as late as September 2010. The company records demonstrate this.
Earth to Air Systems had significant debtors owing to the company. Should they have paid within normal terms and conditions, which were always expected, the company would not have been placed into liquidation. The Directors note comments within the liquidators report to creditors relating to the non payment by debtors, but wish to state that in all cases the non-payment by these customers was driven by contractual triggers linked to the liquidation event and well accepted delays in payment within the construction industry. It is the Directors considered view that all outstanding funds would have been collected and therefore adequately funded the working capital requirements of the business; this was ultimately prevented by the liquidation event. In excess of $650,000 was due for payment to the business the week of the liquidation event.
Works in Hand
Earth to Air Systems had considerable works in hand at the time of administration that was in excess of $6m, which would have profitably funded the business into the future.
On the basis of expert advice we were always of the view that we could meet our obligations and work with our creditors during the period of slow payments from our debtors. One of the creditors was no longer willing to wait for payment and pushed for liquidation.Specialist M&A Firm
As the business had undergone significant growth, we recognized the need for external capital to assist in and facilitate the growth opportunities for the business and as such had engaged and had an executed mandate with a specialist well regarded M & A advisory firm to assist in its expansion working capital requirements.
In summary, the Directors are firmly of the view that the Company could and would always pay its debts as and when they fell due .The director’s always maintained adequate books and records along with forward looking forecasts based and business plans on expected and known work flows which indicated its working capital requirements.
None of the above was considered or indeed acknowledged when the creditors report was compiled. We have made volumes of submissions that have not been recognized.
With the above in mind, I reiterate to you that the representations made to you are not correct and that we always acted in good faith.