Tuesday, 2 September 2014

EXCLUSIVE: Deadlys founder's demise leaves Equmen with $3 million loss

The late Gavin Jones (L) with his partner and Equmen CEO
Anthony Pavlakis
Photo: Deadlyvibe.com.au 
THE chief executive of premium underwear brand Equmen Pty Ltd has been forced to appoint an administrator after the death of entrepreneur  Gavin Stuart Jones left the company with no director and no way to pay its debts.

According to a recent judgement handed down in the Federal Court, Equmen Pty Ltd, which sells "proprietary, pressure-support underwear" is a start-up that "has lost approximately $3 million thus far." Jones, who died at his farm in Goulburn on July 12, 2014, was the sole shareholder of Equmen through another company he controlled, Gavin Jones Communications. He was also sole director of Gavin Jones Communications and was the only person with authority to operate Equmen's Australian and international bank accounts.

Equmen, which markets and takes orders for its products via its website, has had stock in US warehouses frozen for non-payment of warehouse invoices since July 22, 2014. A notice on the Equmen website tells consumers "issues with our warehousing channels" have delayed orders.

In the aftermath of Jones' death, his partner and Equmen ceo Anthony Pavlakis applied to the courts for an order under section 201 F of the Corporations Act. Section 201 F deals with companies that have only one director and may require urgent intervention if the sole director dies or is otherwise unable to discharge his or her duties.

On August 7 Pavlakis placed Gavin Jones Communications Pty Limited, Vibe Australia Pty Limited and Deadly TV Pty Limited into the hands of administrator David Levi of Levi Consulting. Pavlakis also applied to the Federal Court to have Equmen wound up. On August 20, 2014, Justice David Yates ruled that Levi be appointed provisional liquidator of Equmen Pty Ltd. 

The late Gavin Jones is credited with founding The Deadlys Awards for Aboriginal and Torres Strait Islander people and for advancing indigenous culture and opportunity through radio programs, magazines and other ventures. 

In his judgement of August 20 Justice Yates describes how Jones was co-director of Gavin Jones Communications until May 2012. It was around this time that then fellow director Corie Kim Chung suddenly abandoned her role as director and transferred her 25 shares in the company.

Chung's cessation as director has never been recorded with the Australian Securities and Investments Commission (ASIC) and her share transfer was never executed by Gavin Jones Communications or registered by Equmen. Pavlakis told the Federal Court attempts to contact her in Tel Aviv and the USA had been unsuccessful. SiN understands Chung is living in New York.

In granting the section 201 F orders sought by Pavlakis, Justice Yates said he accepted David Levi's affidavit evidence that he had no reason to believe that he would have a conflict of interest in being appointed to Equmen.

Levi found that Equmen had different offices, different staff and no connection with Gavin Jones Communications and its related entities other than its shared director, the deceased.

A list of creditors for Vibe Australia Pty Ltd shows no banks or major financiers. Vibe Australia had been recipient of Commonwealth grants prior to the Federal Government's announcement in June this year that the funding would instead be applied to front line services from July 1.

The decision is believed to have come as a shock to Jones and his staff and supporters given the entity receiving the Commonwealth funding via the Health and Indigenous Affairs Departments was given a positive report by KPMG following an independent audit in 2013.

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