Brand Direct creditors force Siebel's hand
The former owner of multi-brand fashion retailer Brands Direct has been forced to apply for a personal insolvency agreement (PIA) after his business collapsed beneath a $8 million mountain of debt.
The Victorian-headquartered business, which operated 10 stores under the name Global Rags, was forced into administration in November after creditors of the company began pursuing the company's owner, Leon Marc Siebel, for failing to meet his financial commitments.
Siebel, who has been a director or secretary of as many as seven different apparel companies across Australia and New Zealand over the past five years, was forced to apply for a PIA after creditors forced his hand during a meeting last month. Warren White, of specialist insolvency accountancy firm PPB, has been appointed controlling trustee of Siebel's estate.
In effect, the agreement offers creditors a better chance of obtaining at least some of their money back than had Siebel, who describes himself on his website as a "dedicated leader of fashion", entered into bankruptcy proceedings.
In a statement of affairs filed to the federal government's Insolvency and Trustee Service, Siebel stated that he did not own any assets - except for two superannuation policies valued at $9000 in total - and as at the end of June had savings of just $100 in the bank.
It is understood the 33-year-old intends offering a $40,000 contribution, supplied by family and/or a third party, towards his debts to be paid in two instalments over the next 18 months.
However at least one law firm has advised its client that the chance of receiving more than one cent in the dollar is unlikely. The details of the PIA show finance company creditors, including National Australia Bank, are owed about $3 million and trade suppliers more than $5 million including Classic Sports (owed $140,000), Icon Clothing ($70,000), Mavi Jeans ($200,000), Rook ($20,000), Octane Denim ($150,000), Travisty ($30,000) and Incu ($10,000).
Other creditors include the Australian Tax Office - owed $400,000 dating back to 2006 - as well as family members Terese and Trevor Siebel owed $1.9 million and $261,871 respectively. A bankruptcy petition against Siebel personally, bought by Lewis Holdway Lawyers on behalf of Icon Clothing, had been listed for hearing on July 22.
However as a result of the PIA, this has now been stayed until after the next meeting of creditors set down for July 31. If the creditors vote to accept the details of the PIA during their next meeting, Siebel will be automatically disqualified from being a director or secretary of any business unless being given leave by the court. His details will also be recorded on credit reference agencies for up to seven years. Neither White nor Siebel were available at the time of press.
By Tracey Porter