The assets and customer contracts of troubled Melbourne IT reseller, TLC IT Managed Services, have been purchased by Genesis MSP.
According to former TLC IT Group shareholder , Jan Chapman, who attended the creditor’s meeting on June 29, the Genesis takeover meant TLC IT Managed Services employees would still keep their jobs.
TLC IT Managed Services was one of several subsidiaries under the TLC IT Group banner, run by Alan Chapman. It once held a 100 per cent stake in TLC Managed Services, but despite the failure of the parent company, it continued to trade.
Brad Tonks and Chris Wykes, from Lawler Partners, were appointed as joint administrators to the company on May 26.
ARN understands Alan Chapman also runs Genesis MSP. Jan and Alan are brothers.
Administrators recommended the creditors place TLC IT Managed Services into a Deed of Company Arrangement. Under the Deed, Genesis MSP will be required to provide records, accounts and information regularly.
The administrator's declined to comment on TLC IT Managed Services. ARN has obtained a copy of the administrator’s documents, which detail the company’s financial statements that record liabilities totalling about $1.14 million as of May 26.
Unsecured creditors are owed $1.02 million, including more than $900,000 to the Australian Taxation Office (ATO).
According to the report, employee entitlements stand at about $291,000, but since employees are continuing their employment under Genesis MSP, they are not entitled to redundancy entitlements.
In a previous statement, the administrators indicated Genesis will be responsible for all employment costs, expenses and liabilities as of May 26.
“In the event that the Deed fails and the company is placed into liquidation, employees entitled to GEERS maybe severely affected,” the administrator’s report said.
It also detailed Alan Chapman’s explanation of the company’s financial difficulties and listed a dispute among directors, poor economic conditions and CFO incompetency.
The administrator’s added their own reasons to the list including poor strategic management of business and inadequate management controls on both revenue and costs.
Alan Chapman had not responded to calls for comment at the time of publication.