Home > Latest News > EXCLUSIVE: Lifestyle Store A Mess Creditors Report Reveals, Missing Accounts A Major Issue

EXCLUSIVE: Lifestyle Store A Mess Creditors Report Reveals, Missing Accounts A Major Issue

The latest Lifestyle Store creditors report has raised more questions than it has answered, with suppliers still hanging out for a basic list of what was removed from the North Parramatta AV and Audio store when administrators were called in.

There is also no indication of what happened to the millions in revenue raised from their 70% discount sales that wen on for months ,because of a lack of bookkeeping after March 2023.

The lack of a stock count despite Greys online holding the stock in a “secure location” for more than 10 weeks, has still not been concluded, with some suppliers calling in their lawyers in an effort to get their stock back

What we do know is that the accounts of the business were a mess with the administrator Mark Robinson and Kenneth Whittingham of Fort Restructuring are now claiming that ‘ The last verifiable accounts that the Administrators have received are the director reviewed and signed management accounts as of 31 March 2023”.

“Our review of the online and other accounting records after this date strongly indicate that the accounts able to be extracted after this date, are likely widely inaccurate, and cannot be relied on, because there is no evidence of the accounts having been reconciled” they wrote.

The administrator reported that the Company had made losses in 2021 and 2022.

The Balance sheet reveals LSS total liabilities as of June 2021 was $8.395 million. In June 2022 this had risen to $12.754 million and as of March 23 when the business failed to pay their cloud-based accounting software licence the total liabilities were $11.4 million.

During the same period the Company’s borrowings increased from $2.6 million in Jun-21 to $5.8 million in Jun-22, before reducing to $5.3 million as of 31 March 2023.

In 2022 the business borrowed $4.5M from Westpac secured by the homes of Vinod David and his father a former tyre trader.

When the administrators walked in the bank accounts held by the Company at Westpac was in deficit by $83k, Westpac is a secure creditor.

Questions are also being raised over the performance of the business between March 2023 and April 1oth 2024 when the administrators moved in due to the lack of “financial information” with the business appearing to be doing deals for cash.

In their ROCAP report Vinod David, the director of the Lifestyle Store claimed that liabilities were $7.162M, the administrators begged to differ claiming that the Net position of the Company was a $23.68 million liability.

The administrator claimed that The Director in his ROCAP did not include amounts owing to the Company in relation to debtors or work in progress (receivables) due to a lack of access to the Companies accounting system.

According to the Company’s records, an amount of approximately $0.9 million is owed by Theatre At Home a business run by Vinod David that is also in administration.

Lifestyle Store Executives Left Vinod David, right John Kranatis

“We are continuing our investigations of this loan amount. However, given TAH is in liquidation, the prospects of recovery of this amount are low”. The administrator claimed.

On or around 10 April 2024, Danwa a Company that had loaned Theatre At Home $5M removed stock from the LSS’s premises and restricted the Director and employees of the Company access to the premises. Danwa claims that they had a right to the stock after Vinod David signed documents transferring the assets to Danwa. This is being contested.

Danwa claims that there is outstanding loan amount of approximately $7.9 million against LSS and has registered an AllPAP security interest over LSS.

Currently the administrators are working with Grays and Steve Nicols, the liquidator of TAH and ROQO, to ensure cataloguing of stock, identify secured creditors’ interests, and to determine ownership interests of these assets between the three companies, LSS, TAH and ROQO.

Grays have advised that due to the quantum of stock they have not been able to catalogue the inventory.

Danwa advanced funds in excess of $7.8 million to ROQO and TAH between March 2022 to November 2022.

Danwa then registered its security interest on the PPSR over LSS on or about 13 March 2024, Danwa claims it was earlier.

The administrator claims that in the event that the Company is wound up, this registration may effectively be deemed void by operation of Section 588FJ of the Act.

The Director has advised that LSS was not a party to the 17 June 2022 loan agreement and consequently should not be held liable for monies lent by Danwa to TAH and ROQO.

Lifestyle Store staff some whose credit cards were used to buy stock for the struggling store are owed over $2M million with staff now being urged to lodge claims with FEG the Government compensation scheme.

$1.5 million is owed to customers of LSS due to deposits taken from customers for goods and services yet to be delivered.

$6 million is owed to unsecured creditors, including amounts owned to trade suppliers, landlords, and statutory authorities.

Vinod David who appears to be in denial as to the reason for the collapse of the business is still ing trying to blame Danny Assagby the owner of Hudson Homes and Danwa who loaned Theatre At Home over $5M and wanted his money back or assets to secure the borrowings.

He clams ““Danwa who were a secured creditor to ROQO and Theatre at Home (but not Life Style Store), unexpectedly and without prior notice, took action to take control of Theatre at Home & ROQO.

Danwa were not a shareholder of ROQO, Theatre at Home or Life Style Store and Danny Assabgy had resigned from being a director of ROQO and Theatre at Home in March 2023 so their actions were taken under the individual General Security Deeds that they held between Danwa and ROQO and Danwa and Theatre at Home”

He admits that “On 18 September 2023, John Kranitis and I agreed with Danny Assabgy that Travolta Holdings who held 50% of ROQO and Theatre at Home would reduce those shareholdings to 25% in return for Travolta Holdings receiving a 25% shareholding of Life Style Store, to align shareholder interest across all entities”.

He further claimed that “ By virtue of Danwa’s position as a secured creditor to ROQO, and as the share of Life Style Store was held by ROQO, Danny Assabgy claimed that he was the “Mortgagee in Possession” over Life Style Store and had security escort all of the staff off of the property, taking control of the company’s assets”.

Since the events of 10 April 2024, Vinod David claims that he has engaged legal representation to try and recover the assets of Life Style Store.

He also claims that he engaged with his insurance companies in an effort explore options regarding the actions of Danwa.

There is no indication that his lawyers have taken any form of legal action including an application to the courts to secure assets from being sold.

We also understand that two insurance Companies have walked away claiming that there are no grounds for any claims.

On 11 June 2024, Nicols + Brien used their capacity as sole member and shareholder of Life Style Store to propose a resolution of appointing a liquidator to the Life Style Store.



You may also like
OPINION: Why The Lifestyle Store Really Failed & Why Its A Lesson For The CI & AV Industry
EXCLUSIVE:Former Lifestyle Store Executives Back Harrasing Customers Who Lost Millions In Deposits
EXCLUSIVE:Why Another Investor Walked Away From The Lifestyle Store After An Audit Of The Companies Dodgy Books
EXCLUSIVE INSIDE STORY: The $20M Lifestyle Store Drama, Missing Stock Questionable Insurance Claims
BREAKING NEWS:Lifestyle Store Placed Into Administration