The second Rubicor creditors meeting was held on Monday 9 September. The administrators, based on further developments prior to the meeting, withdrew their support for their original recommendation of Polygon’s DOCA (Deed of Company Arrangement), stating:
“It is our position that none of the proponents have provided sufficient evidence that any of the DOCA arrangements can be executed, complete or that the companies will be sufficiently capitalised to enable the continued operation.” (Supplementary Report to Creditors, 10 September 2019, page 5).
Then the administrators, having assessed Rubicor’s cash resources as being “insufficient” and in the absence of an “immediate cash injection”, deemed it is no longer possible for the Group’s brands to continue and recommended an orderly wind down of the company’s operations. In other words the company should be liquidated and the various individual assets sold.
The most astonishing aspect of what has occurred since the original creditors meeting on 2 September was the lobbying undertaken by former Rubicor director, and Cashel CEO, Angus Mason, for the creditors acceptance of Cashel’s DOCA.
In correspondence to creditors (remembering that all of Rubicor’s current employees, and many of its former employees, are creditors) Mason proposed, amongst other things, the following:
• Stephen Checuti as the new CEO (no recruitment industry experience)
• Kevin McLaine as the acting CFO (no recruitment industry experience)
• The company name to change from Rubicor to Xpand.
• CEO salary to be $275,000 plus incentives.
• Incentives for any executive to only be paid where the company is profitable
• A list of 29 current employees to be employed by the new entity.
Mason’s missive to Rubcior creditors includes the following astonishing statements about the Cashel DOCA:
It brings in new executives and directors Kevin McLain (Chair and CFO PS&C ex IBM et al) and Stephen Chetcuti (ex RXP) to provide decisive leadership, financial management and sales experience.
That the Cashel DOCA has the support of the Xpand employees.
The Cashel DOCA proposal enables the business to rebuild its tarnished reputation and allow Xpand to flourish.
Mason’s whole approach defies rational explanation.
It’s like Mason awoke from a four year coma during which he
• was not a director of a company that “….was likely insolvent as at 31 March 2017 and remained so until our appointment on 5 August 2019” (FTI Report to Creditors, page 13),
• did not attend that company’s board meetings during which the (then) CEO/Executive Chairman, David Hutchison, and (then) COO/CEO, Sharad Loomba were not granted a combined increase in total remuneration of 81% from $730,000 to $1.32 million during a year (2017/18) in which all the company’s critical financial measures went backwards and the company failed to make superannuation payments to staff, contractors and temporary employees (current total of superannuation owed by Rubicor is $10.3 million).
Mason’s plea for creditor support is the ultimate in cognitive dissonance.
I’ve got to admire his ego – it’s limitless.
How would any creditor, especially a former or current employee, possibly think Mason has any credibility to deliver anything he proposes in the Cashel DOCA?
Clearly the good folks at FTI Consulting saw right through him and were having none of it.
The creditors’ vote on either the DOCA proposals or liquidation has been adjourned leaving the Rubicor Group carcass to rot away as we await the formal notification of death.