Infosentials: A dog that just would not hunt
By Christopher Webb
January 14, 2008
This Christopher Webb story about the Infosentials collapse and creditors meeting appeared in The Age on February 27, 2001.
SBS is usually the best place to catch those spaghetti westerns where vultures are shown high above the plains waiting to swoop on the prey far below. What brings to mind images of creatures circling is the basket case known as Infosentials, the information outfit established by Michael Schildberger that is now in the hands of company doctors.
For a couple of weeks now there have been all manner of people running around trying to get a rescue package together.
These include various members of the stockbroking fraternity who have already extracted several sets of fees from Infosentials when it was in the land of the living.
Now with the administrators holding a fast-chilling carcass in their hands, the brokers are sniffing around trying to figure out how to pocket a further round of commissions.
Throw in a couple of investment outfits, and interests associated with various directors, and you end up with a collection of folk who are looking to pick up cheaply whatever assets take their fancy.
It is already known that the group will realise nothing like the outcome sketched in a statement of affairs, produced by its directors.
This effort put estimated assets at nearly $8 million and forecasted a $110,066 surplus.
However, administrators Andrew Home and Paul Stewart told creditors that the report should be disregarded and that instead, they should focus on the administrators' report which ``we believe ... provide a more reliable guide for creditors in their deliberation."
The administrators put assets at $3 million and they estimated an overall deficiency of more than $7million.
It follows that the administrators are operating from a position of weakness in trying to sell assets that everyone knows are big-time loss incurrers.
There was a time, though, when it looked as if Infosentials might have turned the corner.
That was when chairman Ian Ferres got to his feet at Infosentials' annual meeting in November and informed the assembled throng that the group had produced an ``accounting profit" in the first quarter of the current year and that directors were confident ``we will move to profitability in the second half".
After the appointment of the administrators before Christmas and their creditors' report, it is now known that Infosentials was outa gas in October.
The insolvency practitioners said they thought that the company's cash reserves were exhausted in that month and that the group was losing money.
As reported here previously, the administrators said prima facie the group became insolvent in October.
The other piece of vital information in the administrators' report was recitation of results for the December half year.
The figures disclosed that Infosentials booked sales of slightly less than $7 million and lost a whopping $5,685,000.
That continued the sorry run of losses reported by this outfit since it went public in early 1998.
For the three previous June reporting periods to June 2000 and the latest December half, Infosentials' all-up scorecard looks like this: Sales $29,396,000. Losses $20,439,000.
This was a dog that just wouldn't hunt.
Meanwhile, 80 or so creditors assembled yesterday with 12 of them asking the administrators questions.
Shareholder activist Stephen Mayne widened his repertoire by attending the creditors' meeting - as opposed to a shareholders' meeting - as a proxy for a creditor owed $19,000.
Mayne's questions centred on directors' liability insurance, administrators' fees and the matter of any directors' buying assets from the administrators.
Following the adjournment of yesterday's meeting, creditors and shareholders will have to wait to see who, if anyone, emerges with some money.
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