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Collar Group’s administrators have submitted two reports (29 May and 24 June) to creditors and held an initial meeting with them (7 June). Earlier this week Collar’s founder, Ephram Stephenson, submitted a bid to regain control of the company, which the administrators recommend being accepted.

Here are the key facts (based on the minutes of the initial creditors meeting and subsequent reporting by Shortlist ($link) of the second administrators report).

  • Collar Group entered voluntary administration on Monday 27 May, with David Ross, I&R Advisory, appointed as the company administrator
  • As of this date, Collar’s sole director, Ephram Stephenson, was no longer in control of Collar Group
  • The catalyst of the appointment of the administrators was the issuance of a Director Penalty Notice by the ATO for approximately $18 million.
  • Collar continued trading with 32 staff made redundant
  • Secured creditor was APositive (approx.. $8 million)
  • Priority creditors were employees’ unpaid superannuation ($3.3 million) and terminated staff entitlements ($450k)
  • Unsecured creditors were: ATO ($20 million); trade creditors ($1.06  million); various state revenue offices (est. $1.8  million)
  • The company’s taxation obligations became unmanageable around December 2022, and subsequently, the company may have been trading while insolvent from that time or even earlier.
  • In early 2023 three major accounts were unexpectedly lost and a subsequent drive to acquire new business succeeded only through the offer of very low and ultimately unsustainable margins
  • Company revenue for the 2023 financial year (ended 30 June 2023) was $43.3 million and had risen to to $82.3 million by the date of the voluntary administration.
  • Trading losses were incurred in 28 or the most recent 35 months of trading
  • David Ross advised creditors on 7 June that the business was not for sale and the purpose of the Administration was to allow Stephenson to put forward a Deed of Company Arrangement (DOCA).
  • The administrators report Stephenson may have breached section 180 of the Corporations Act (care and diligence), and section 181 (good faith)
  • Stephenson’s offer to re-take control of Collar (via a DOCA) comprises an upfront contribution of just over $3.3 million to be funded by Collar’s debtor finance facility and the balance of $2.87 million to be paid over 14 months, in monthly instalments ranging between $100k and $250k.The total offer is approximately $6.2 million, meaning unsecured creditors will receive 9 cents in the dollar owed.
  • Administrators are recommending creditors accept Stephenson’s offer
  • Administrators advise that under a liquidation scenario, employees might receive only 80% of any unpaid wages and superannuation and none of their leave and redundancy entitlements (as opposed to 100% of all under the deed).
  • Creditors will vote on the DOCA (Stephenson’s offer) next Tuesday, 2 July.

From the evidence, it seems creditors have three choices:

  1. Accept Stephenson’s offer
  2. Decline Stephenson’s offer and advise Mr. Ross and his team to find a better solution
  3. Sack Mr. Ross and appoint a new administrator

The main problems with option 1 are:

  • If Stephenson is charged and successfully prosecuted for breaching section 180 of the Corporations Act, then the likely, almost certain penalty will be his disqualification as a company director for a to-be-determined period. Should that occur, what happens to Collar’s ownership then?
  • Given the voluntary administration of Stephenson’s two previous recruitment companies, Kona & Co and Design and Construct, it appears he is not yet skilled in growing a self-sustaining recruitment agency – why would a fourth opportunity be any different?
  • Stephenson’s DOCA has not proposed additional directors whose presence on the Collar board may give some confidence to creditors (and other stakeholders) that there’s appropriate oversight of his decision-making
  • Collar’s brand has suffered such damage in the past four weeks (not just because of the VA but how it was communicated to employees) that it seems difficult to imagine Stephenson can retain key employees and attract other talent to Collar to help him rebuild the business
  • Burned existing creditors (and wary potential ones) are unlikely to provide products and services to Collar on anything but COD (cash-on-delivery) or secured terms.

Options 2 and 3 require an additional investment of time and money, and there is no guarantee that a better offer for creditors will emerge as a result.

It seems Collar creditors are well and truly stuck between a rock and a hard place.

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It’s outrageous that he could get away with paying the ATO $1.8m of $20m and retain control of the company. Basically, that outcome rewards the shocking and arguably criminal behaviour to the tune of $18.2m! If that’s the outcome, why would he or anyone else bother trying to do the right thing?

Rhyley Hunter

I’m not one to rag on anyone, however, there is no way he should be given the chance to be a Director again. His poor track record speaks for itself. There is no way known that he didn’t have knowledge of what was happening financially and he has obviously turned a blind eye whilst still promoting himself as a brilliant, generous and caring CEO. Choices and consequences I say. I really feel for the creditors.

Rachel G

I feel for the creditors, the employees and particularly their temp staff, however this man should not be able to continue as a director of any business as he clearly doesn’t understand how to manage cash flow or a balance sheet. Using a debtor finance facility and undercutting people to win contracts isn’t good business long term. Money due to the ATO and statutory bodies is money that has likely been oncosted to clients (as it wasn’t tax due from the non existent profits) and missing superannuation is stealing money from your employee’s futures, even more so if it is your temps. Where are the consequences for this bad behaviour?


If the DOCA passes, it would signal that creditors have little faith in Collar Group’s long-term viability. Stephenson’s track record, potential legal issues, and the minimal return of 9 cents on the dollar highlight the risks. Accepting this offer seems like a desperate move, reflecting more on the lack of better options than confidence in the company’s future. Interesting few days ahead… 👀

Anis kaur

Waiting for Anon to strike


If creditors accept this DOCA, it’s a glaring sign they’ve lost all faith in Collar Group’s future. Ephram Stephenson’s history of running companies into the ground speaks volumes. He’s already driven two recruitment companies into voluntary administration and now expects creditors to trust him again? His potential legal troubles and the paltry 9 cents on the dollar offer are just the tip of the iceberg. This DOCA is nothing more than a desperate attempt to cover up poor management and financial incompetence. It’s a slap in the face to everyone owed money by this failing enterprise.


Accepting this DOCA would be a clear admission that Collar Group has no future. Since the administration announcement, the mass exodus of staff and the complete shutdown of the Adelaide office are glaring red flags. With such a significant loss of talent and confidence, how can anyone believe in this company’s recovery? The offer of 9 cents on the dollar is insulting and shows the desperate state of affairs. This isn’t a plan for recovery; it’s a last-ditch effort to stay afloat in a sinking ship. Ephram is done in this industry and should be barred from ever being involved in a business again.

john mooney

should be behind bars for ruining those staff careers r


It’s official.

The DOCA has been approved by creditors as of yesterday.

This should be interesting to see how things pan out.


Worked for this company for a very short time as a seasoned recruiter it took only a few weeks to realise the hype did not match the action. Its terrible that good people left good jobs to join a sinking ship


I know someone who was meant to start with them and they risked everything from moving overseas and even moved into their accommodation which they can now hardly afford as Australia is an expensive country.

Now with this situation and with their start dafe delayed, its like nothing ‘positive’ will happen.

The CEO should be ashamed of himself for treating even future employees for not being transparent and running a sinking ship.

He should be stripped of his awards as frankly – he clearly doesn’t deserve them.

Last edited 11 days ago by Anon
Anis kaur

Loving the fact the auto filled documentation was sent to internal staff coercing them for a yes vote.

When raised in the administration meeting it was swept under the rug of anyone could change their vote or have the meeting adjourned as more information came to light.

David Ross and Ephram should not be able to work or do business.

Last edited 11 days ago by Anis kaur
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