A sports media company that received more than $70 million from high-profile investors including Prime Minister Malcolm Turnbull has collapsed into liquidation.
PlayUp specialised in monetising content from sporting clubs and athletes around the world, but showed signs of distress last year when a number of directors left its board, including Rich Lister Bruce Mathieson.
The business was founded in 2007 by George Tomeski and Luke Bunbury with a $5 million investment from angel investors.
PlayUp later raised an additional $18 million in a second capital-raising, followed by a $US50 million capital injection from four Hong Kong investors, according to StartupSmart.
Fairfax reports Turnbull invested around $1 million in PlayUp when he was shadow communications minister, but managed to regain most of his money.
Six former staff members have been seeking to wind-up PlayUp’s holding company, Revo Pty Ltd, for some time.
The former employees claim to have been owed around $500,000 in unpaid wages and superannuation, according to Fairfax.
A number of hearings were held last year to determine whether or not to wind-up Revo, including in the Supreme Court of Victoria.
The business was finally placed in liquidation last week, with Grant Thornton Australia partner Stephen Dixon appointed external manager.
Is it common for former employees to initiate wind-up orders?
Sydney insolvency practitioner Jamieson Louttit told SmartCompany it is “very uncommon” for a business’s former employees to launch a wind-up application.
“Ordinarily, it’s trade creditors and the suppliers,” Louttit says.
“As an employee, you would normally go to Fair Trading.”
Louttit says the employees would have launched the wind-up order in order to pursue any outstanding entitlements.
“The government’s employee entitlement scheme, now called the Fair Entitlement Guarantee with the Department of Employment, will not pay employee entitlements unless the company is in liquidation,” he says.
“It pays all employee entitlements, except for super, subject to certain limits.”
Through the Fair Entitlements Guarantee, employees may be able to claim up to 13 weeks of unpaid wages as well as unpaid annual and long service leave.
In order to be eligible, employees must lodge a claim within 12 months of the date they lost their job or the date of liquidation or a former employer’s bankruptcy.
SmartCompany contacted Grant Thornton Australia but did not receive a response prior to publication.