Firepower creditors left in the cold

[laura]

So I hate rehatching the Firepower issues, but this story was on ABC news on Thursday and is one of the best reports I have read about the issue.

Firepower creditors left in the cold
PM - Thursday, 31 July , 2008 18:40:00
Reporter: David Weber
PETER CAVE: The administrators of Firepower Operations confirmed today that the only option was for the company to be liquidated.

But creditors owed millions dollars are unlikely to get anything.

Among them are the defunct Sydney Kings basketball team, the Western Force Super 14 Club, and various athletes, lawyers and individuals.

Firepower had marketed a fuel pill which was supposed to increase fuel efficiency. Yet there appears to be little evidence that it worked.

The administrators are now hoping to sell hundreds of barrels of fuel additive, which reportedly does work. However, there's unlikely to be any return from that either.

David Weber reports from Perth.

DAVID WEBER: Investors had put tens of millions of dollars into Firepower British Virgin Islands, the owner of Firepower Operations in Australia.

The administrators Hall Chadwick said today there wasn't a rescue plan, and the magic pill didn't have a future. Only a few creditors were at the meeting to hear the bad news.

One woman who didn't want to be identified said her company had been hit hard.

INVESTOR: Not surprised at all.

DAVID WEBER: Can I ask how much money you'd put in?

INVESTOR: We're a small company so under $50,000, so … but to us that's a lot.

DAVID WEBER: Did you have hopes this fuel pill would work?

INVESTOR: To be honest, no. We kind of did our investigation through the media and whatnot, we knew anyway in the end. So today basically confirmed it's over.

DAVID WEBER: But you had hopes starting out I suppose?

INVESTOR: Well we did like especially going into administration, we were hoping you know some cents in the dollar back. We'd obviously read … the rescue through the media, but no, that's it. So, we're not surprised, I'm not surprised.

DAVID WEBER: What would you say to Tim Johnston if you saw him here today?

INVESTOR: No comment.

DAVID WEBER: Firepower director, Tim Johnston, didn't attend today's meeting; it's understood he was in the UK.

He provided a statement which said he'd been working around the clock to protect shareholders' interests and an offer from the Timis Group in the UK would have allowed continued trading but the offer was rejected.

All of the Firepower Operations staff have been dismissed. They'd been working for free for several months.

Will Singer had been working for Firepower in South Africa. He said today he was owed more than $200,000. Mr Singer had this to say about Tim Johnston.

WILL SINGER: To be quite honest, he's a very elusive sort of … a very … sort of a guy, very friendly. Good to get along with. Thinks on his feet. Probably not the most astute businessperson.

DAVID WEBER: Mr Singer said he believed Mr Johnston had honest intentions; he'd just received bad advice.

The Australian Securities and Investments Commission has initiated civil action against companies linked to Mr Johnston.

Hall Chadwick partner, Geoffrey McDonald, said the company will be wound up in the Federal Court.

GEOFFREY MCDONALD: There's no money to be had anywhere else that's the thing, we can't see where there is any money.

One thing that we've been talking about is the fact that this company has been structured and has the overhead costs of a worldwide multinational. You're talking about offices all around the world, people employed all round the world, assistants, you're talking about all sorts of things like that for a company that's really not selling much.

DAVID WEBER: So creditors will only make money out of the barrels of fuel additive if it's sold?

GEOFFREY MCDONALD: I doubt if the creditors are going to get any money. The employees might get some of their money but the employees are going to get paid… we'll get our fees, the liquidators will get their fees, there'll be investigations, lawsuits against Mr Johnston but what's there?

DAVID WEBER: Hall Chadwick only has responsibility for Firepower Operations. Creditors are owed more than $16-million from the Australian arm.

Geoffrey McDonald says the administrators now have several hundred barrels of a chemical which reportedly improves fuel efficiency.

GEOFFREY MCDONALD: Cost price was $1,700 a barrel. I'll look at any reasonable offer. And for the pills; make me an offer.

PETER CAVE: Hall Chadwick partner, Geoffrey McDonald, ending that report from David Weber.

PM - Firepower creditors left in the cold

[welshrugbyfan]

Bye bye Mr Giteau.

[lara93]

nooooooooooooooooooooooooooooooooooooooooooooooooo ooooooooooooo

[welshrugbyfan]

nooooooooooooooooooooooooooooooooooooooooooooooooo ooooooooooooo

My sentiments exactly but if over rated NRL players well SBW anyway (Not Gasnier) are being sought out to sign in France then surely they have gotten wind of the missed player payments of our man Gits and a few others who have missed out.

It won't be long if they haven't approached him yet that he may decide to sign with one of them as well, hopefully he wants to keep playing with the Wallabies and this will keep him in Aus at least even if he does decide to call it quits here.

We are already going to miss out on seeing Dan Carter next super 14 season because of the French Top 14 comp. He signed to Perpignan for 6 months and will start there in December and remain there until June 2009 missing the entire super 14 season.

[James]

It won't be long if they haven't approached him yet that he may decide to sign with one of them as well, hopefully he wants to keep playing with the Wallabies and this will keep him in Aus at least even if he does decide to call it quits here.

He's signed with the ARU until 2011 so I doubt that'll be happening anytime until then. If then even. What Perpignan is paying Carter in Australian dollars is about the same as what Giteau *would* have got if Firepower paid out in full. Even without full payment its in the same area. The only difference really is that Carter would also pick up money from the NZRU when he returned to test rugby.

[laura]

I think we owe Gits more respect than to assume that, because he isn't going to get the money, he will leave. I know it was a probably a deciding factor in his move over here, but he has a life here now; his girlfriend moved over here, they have a house here and his mates are here. I think he has more than money to think about when he makes his choices and I think that surely a player of his callibre and a person of his respectability would not up and leave over one dodgy deal.

[welshrugbyfan]

I think we owe Gits more respect than to assume that, because he isn't going to get the money, he will leave. I know it was a probably a deciding factor in his move over here, but he has a life here now; his girlfriend moved over here, they have a house here and his mates are here. I think he has more than money to think about when he makes his choices and I think that surely a player of his callibre and a person of his respectability would not up and leave over one dodgy deal.

I'm not saying he will go but money seems to talk a lot louder than contacts these days. He has penty of mates back in Canberra too, I read an article on Sharpie and when asked about Gits moving back to Canberra in 2009 it didn't sound overly convincing about him staying. One dodgy deal is money in the bank to him and he was promised all this money from firepower which obviously clinched the deal for him to come here, now it doesn't look like he is getting what he was promised so in all fairness he has every right to pack up an leave. Hopefully the Perth lifestyle and weather, new team mates and his girlfriend playing for the West Coast Fever will help him to stay here.

[laura]

Absolutely, he has every right to leave, but I'd like to give him the benefit of the doubt and think that he is not here only for the money and surely that he is not going to run at the first sign of trouble (big trouble, mind you).

[welshrugbyfan]

Absolutely, he has every right to leave, but I'd like to give him the benefit of the doubt and think that he is not here only for the money and surely that he is not going to run at the first sign of trouble (big trouble, mind you).

Only time will tell. Players are now realising they have only a certain time in the game and you can't blame them for chasing the dollars. Club loyalty doesn't exist anymore, it's all about the cash.

[slomo]

Only time will tell. Players are now realising they have only a certain time in the game and you can't blame them for chasing the dollars. Club loyalty doesn't exist anymore, it's all about the cash.

spot on WRF!, loyalty nowadays is spelt out in dollars and euros........

[NTT]

One of the main reasons Giteau came to the Force was an ambition to help build the club into a strong, competitive team that plays regular finals rugby. He also wanted a change of lifestyle as Canberra only has so much to offer if your not a politician or scientist. Sure the money he was promised would have been a huge deciding factor aswell. The fact the first two years of his third party deal were nearly fully honoured tells me that hes still almost earnt what was promised. As for the third year, well hopefully a replacement deal is announced soon to put our minds at ease. Its interesting that Giteau has parted with his manager and is handling contract negotiations himself. It was to do with the fact his and Drew Mitchells manager tried to extort some alledged unpaid monies associated with the third party deal. This tells me that Giteau knows a bust deal when he sees one. I'd take the fact that he has signed with the ARU until 2011 and the fact he hasn't asked for an early release from his Force contract that hes not unhappy being here. His Force contract does still have the clause stating that his current contract with the Force will carry on until 2011 if he doesnt sign with anyone else. He has also stated that he is happy in perth and with the Force on numerous occassions but who ever truly knows.

As for wanting to leave well, the troubles of an uncertain third party deal and his good mate Henjak getting himself sacked could be reasons for him wanting to leave. I have faith that the third party deal situation will be rectified before the new super 14 season as Giteau is in negotiations with potential sponsors to cover next year and even extend the deal until 2011. I mean can any other state really offer him as much as Firepower did and still have other sponsors that could take up the deals if they fell through. If he was to head home to Canberra then he would have left without finishing his main goal for coming over here in the first place, to make the Force a regular finals side. As for Henjak well they are childhood mates so Giteau may have known Henjak was prone to such acts as have been well documented.

The only thing that concerns me in this whole situation is a report in the West Australian last week that was alluding to the possibility that some sports stars and some recipiants of sponsorship money may have to pay money back to Firepower if it can be proved that the money was received while Firepower was trading while insolvent. This however could imply to anyone from the Sydney Kings to someone like Wayne Carey. The whole Firepower mess claimed so many victims from mum and dad investors through to the australian federal goverment aswell as companies around the world. Its unfortunate that it happened to the Force and some of its players but the fact some of the guys affected at the Force have recently signed contract extensions to stay at the club indicates that the guys here want to be here and hopefully Giteaus the same. Only time will tell though...

[laura]

Giteau seems to know what he is doing, as his own manager. If its that hard to find third party deals for Australia's best player (IMHO) then there is something seriously wrong. There is enough money in WA and enough people who could sponsor him double what Firepower had promised. If its that hard to find someone in WA then they will be hard-pressed to find someone interstate! I'm sure Andrew Forrest has a few spare dollars he could throw around.

I think the fact that Henjak is no longer here, will only play a very small part in Giteau's decision, sure they are friends but Giteau isn't going to get to play with Henjak, in Australia, before the next world cup. He may as well stay and if he so desires, go overseas and play with Henjak there, after the world cup. Gits has more than one friend in WA and at the Force, I' know him and Henjak are great mates but I'm sure that a few years playing at different clubs won't hurt them, I don't think their friendship is that superficial, that they cant remain friends and play apart.

The West Australian, really, as far as I'm concerned believe none of what you hear and half of what you see. I have a shocking memory of my accounting stuff in yr 11 & 12 but I'm pretty sure that beneficiaries or people who are sponsored by companies, which go bankrupt, can not be made to pay. If anyone would be made to pay, in this situation, it would be the business owners and depending on the type of company (private/public) there is a limit on what can be done to re-coup costs. Lost cause, end of story.

[tic]

Actually Laura, Gits' payments from Firepower may be examined by the liquidator. Any payment made within 6 months of a company becoming insolvent, is deemed a "preference payment" under the Corporations Act, and must be repaid unless the recipient can show that the payment was in the ordinary course of business and with no knowledge of the financial difficulties of the company.

Unfortunately for Gits, if he has received any monies from Firepower in the last 6 months or so, he may have to refund it to the liquidators, or have a court battle with them to try and retain it. Either way, an unlovely outcome.

[NTT]

I totally agree laura, rumours and speculation get us nowhere, but keep us entertained on the forums.

Giteau will make a decision on his future and we will have to live with it whether it will be with the Force or with another club. I would like him to stay and help Sharpie, Sheps, Pocock and the boys fulfill the goal of turning the Force into Australias best team.

As for the West well, without the super rugby liftout its just fish and chip wrapping really isnt it .....

[NTT]

Actually Laura, Gits' payments from Firepower may be examined by the liquidator. Any payment made within 6 months of a company becoming insolvent, is deemed a "preference payment" under the Corporations Act, and must be repaid unless the recipient can show that the payment was in the ordinary course of business and with no knowledge of the financial difficulties of the company.

Unfortunately for Gits, if he has received any monies from Firepower in the last 6 months or so, he may have to refund it to the liquidators, or have a court battle with them to try and retain it. Either way, an unlovely outcome.

Thats basically what the fish and chip wrapper said but it was alluded to and no specific names were mentioned just sports stars and sponsorships ......