Bitter E3 Style Infighting Revealed After Voluntary Administration
The CEO of Queensland based distributor E3 Style Vanessa Garrard claims that her Company, has not been placed into liquidation, she claims that E3 Style, which is suffering from cash flow problems, was deliberately placed into voluntary administration.
Garrard claims that the Company ‘became the largest licensed electronics distributor in Australia’ and that “her” Company will continue to trade, and that she has every intention of fulfilling all existing orders. She has not said whether she has the ongoing financial capacity to fund the placing of further orders with overseas manufacturers.
Documents lodged with the Australian Securities and Investment Commission clearly states that a registered “Liquidator” Domenico Alessandro Calabretta has been appointed as an External Administrator to the Company.
E3 Style, called in the administrators on April 15, Domenic Calabretta from Mackay Goodwin was appointed voluntary administrator, he has not returned our calls.
A creditors’ meeting is scheduled for April 28 in Brisbane, past clients of E3 Style are Dick Smith who dropped using E3 Style instead choosing to run their own house brand sourcing operation, along with JB Hi Fi who also cut their relationship with E3 over problematic deliveries and contracts.
It’s believed that revenues have slumped from around $23M in 2012 to sub $15M this year.
The business claims that it holds the licenses for branded Star Wars, Batman, Scooby-Doo!, Hot Wheels and The Simpsons products. ChannelNews understands that the Company has lost some license rights this year.
Also placed into administration is KreativeDNA Pty Ltd which is a E3 Style related Company.
Garrard, claims that the decision to place the Company into administration was a direct result of claims against the Company including a statutory demand from a business linked with Crawford Giles the CEO of Powermove who are a highly successful consumer electronics distributor based in South Australia.
She is also describing the current Supreme Court action between The Crest Company asnd E3 Style as being based on “theft of information”.
Garrard claims everyone will be paid in full when the administration is completed however she has not explained what will happen if both the Court cases that E3 Style are involved with go against the Company.
Estimated costs spanning the original claims and the cost of running the action against The Crest Company which has already ran up legal bills of $2M for both sides in the case could total over $3M.
When asked about the decision to place the Company into administration she said “This is to control the situation,” Garrard says.
Garrard who is embroiled in a messy court case with her former employers, The Crest Company claims that the E3 v Tomkins & Crest Court case that is being played out in the Queensland Supreme Court has cost E3 almost $1million to date and E3 Style, will continue on with the court case as the “direct financial impact to E3 “was substantial”.
Garrard is claiming that E3 incurred losses as a result of actions taken by The Crest Company and a former Crest employee Michael Tomkins who quit E3 to take on a role at Crest.
Garrard also claims that she was never employed as a PA or worked in the Crest call centre.
Investigations by ChannelNews reveal that Garrard was not PA to a senior director at The Crest Company for 4 years she also worked in the outbound Crest sales team.
Information has also been supplied to ChannelNews, that Crest management who Garrard later had a major falling out with, provided a $1,000 advance against her wages when she first started at the Company that E3 Style are now taking action against.
We have also been told that Garrard while employed in a sales role at Crest she was responsible for the loss of a $500,000 contract to supply Sanity Music, the fallout over the Garrard negotiated contract led to Sanity terminating their relationship with Crest.
Garrard told ChannelNews in one email “I have had a hard upbringing – I built this business with $10,000 and I built up almost $120k in debt on credit cards”.
She also claimed in the same correspondence that both Crawford Giles the CEO of Powermove and Dirk Olbertz who E3 is also suing are executives who have been “spoon fed”.
In correspondence with ChannelNews Garrard also claims that E3 Style has “not been sued for “over $250,000.00” by “Powermove”.
Crawford Giles of Powermove is, through another entity, beneficially entitled to a significant shareholding in E3 Style.
She then in the next sentence said “The references to the litigation with Powermove and funding issues do not disclose that Powermove failed to honour payments for orders placed by it with E3 Style under their Distribution Agreement”.
Garrard went on to claim that “As a result E3 Style funded those orders separately so as to ensure its customers receive their orders”
She said that “Reference to struggling to fund orders are limited to orders Powermove failed to honour and E3 was then put in a position to fund those which is outside of E3 normal business model, E3 did however fund those orders”.
The actual amount that Crawford Giles is claiming from Garrard is believed to be $285,000.
Garrard said that she has never advised anyone that Harvey Norman is buying into the business of E3 Style.
She also claims that “the Commonwealth Bank continue to be a banking partner but do not fund the company’s operations”.
She has not said whether the Commonwealth Bank has suspended borrowings to E3 Style or whether the Commonwealth Bank is a creditor of E3 Style.
She also said that her business partners were bought out, and that neither “quit”.
“Director’s don’t “quit”, they sell their shares” she said.
Garrard has not return calls made to her.