Advertising agency collapses owing $3.5 million to creditors
Thursday, August 21, 2014/
An Australian marketing company that specialised in online display advertising, search solutions and customised toolbars for websites has collapsed.
Randall Joubert of Joubert Insolvency was appointed liquidator of Adlux on August 4. The first meeting of creditors was scheduled to take place in Sydney on August 15.
According to media and marketing news publication Mumbrella, which is a creditor of Adlux, the company’s debts to creditors exceed $3.5 million. A separate report from Mumbrella suggests the assets of the company have since been acquired by a digital services company called Excite Digital Media, whose chief executive Evan Balafas reportedly held a minor stake in Adlux.
Adlux was founded in 2009 and had operated in the US, South America and Asia, as well as Australia. The Adlux LinkedIn account says the company has between 11 and 50 employees.
The company was founded by George Papaioannou and Nicholas Stavropoulos, who also founded online travel wholesaler Excite Holidays and are said to have a small stake in Excite Digital Media.
According to creditors’ documents seen by Mumbrella, Excite Holidays is one of the major creditors of Adlux and is owed $842,735. A company called GNE Services Trust, which has the same Bondi Junction address as Excite, is owed $1.2 million.
It appears a number of other related entities are also on the creditors list, including Gen Y Pty and GNE Racing, which also share the same address and are owed $154,072 and $7,160 respectively.
Mumbrella reports Adlux also owes Kinected $788,553, Nami Media close to $400,000 and an unknown amount to the Australian Tax Office.
SmartCompany attempted to contact Joubert Insolvency but did not receive a response prior to publication.
A call to Adlux was answered by Excite, but SmartCompany was told no one was available for comment. The Adlux website was also not loading at the time of publication.
While not commenting specifically on the liquidation of Adlux, Colin Porter, managing director of Creditorwatch, told SmartCompany it is “not common” for advertising firms to collapse.
“Most of the time they are just taking a percentage of fees from advertising bookings,” says Porter.
“It should be very easy for them to manage cash flow.”
Porter says “it is never nice” to see a case where it appears there is a close relationship between the owners or directors of a company and the company’s major creditors.
“In general, a good practice we recommend as a reporting agency is to not only look at the company you are dealing with, but the companies behind the companies,” says Porter.
“It’s common for there to be holding companies and associated entities … so it’s important to know who they are, especially if big dollars are involved.”