Lion’s share of Stockford sold
Morethan 90 per cent of theStockfordconsolidator group has now been sold off with only one large Sydney practice remaining in the hands of administrator KordaMentha, says Melborne-based partner for the corporate recovery firm, Mark Korda.
Korda expects the sale of the various business units to top $18 million, and anticipates the full winding-up of the firm within 60 days.
“We have sold 57 of Stockford’s 67 business units, and the 10 remaining units other than the Kent Street Sydney practice are small bits and pieces and would amount to perhaps 5 per cent of the group’s overall assets,” he says.
Korda says the difficulty with the Kent Street business, which he expects to sell by May, is that it is an amalgamation of a number of different practices with 70 staff and is therefore taking longer to divest.
“We’re working with the principals at the moment and are in discussions with a number of potential buyers,” he says.
KordaMentha was appointed as administrator six weeks ago after the Stockford group ran aground.
“Our strategy was that Stockford needed to be de-merged before it could be sold and we adopted a very aggressive de-merger strategy that included closing down its head office in Melbourne, which has since become self-liquidating.
“The Stockford employees have been great as the reality is if we get the business sold and keep the costs down in the process, they get all their entitlements paid,” he says.
The biggest sale was Stockford’s software system, APS, which Korda says was sold to an unnamed “leveraged buyer group”.
“Our strategy was to sell off the simplest business units first as time was very important. And in the first two days we sold a number of businesses back to the principals.”
As for reasons the group failed, Korda believes a flawed business model was to blame.
“There are many visions that turn into mirages, it’s all about execution and at the end of the day they [Stockford] had too many overheads at head-office and lacked incentive schemes for the principals,” he says.
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