SenateSHJ was involved in a lot of government lobbying work in Wellington. Photo / file
SenateSHJ was involved in a lot of government lobbying work in Wellington. Photo / file
A liquidators’ report reveals new insights into the closure of SenateSHJ - and the state of its books.
A top PR, communications and government lobbying firm owes at least $1.4 million, according to an initial liquidators’ report - including more than $500,000 for retired partners.
With listed assets of morethan $600,000 - and a further $1.81m in “intangible assets” such as goodwill - the liquidators of SenateSHJ say they expect to make some form of payment to preferential creditors, but just how much remains unknown.
Senate closed its Wellington and Auckland offices last Wednesday, with the loss of about 12 jobs.
The liquidators’ report, by Grant Thornton liquidator David Ruscoe, confirms the company’s earlier comments that market conditions had led to its demise.
“Over the last 12 months, the company has faced a number of financial challenges, including the resignation of partners, a significant downturn in their public sector practice and a weak/quiet new business pipeline,” says Ruscoe’s report.
“The result of this was an operating model that was no longer viable given the current market conditions.
SenateSHJ closed its New Zealand operation last week, with the loss of 12 roles.
“The company considered several options to try and recover from its financial challenges and included everything from the potential sale of the business to expanding more closely with its Australian arm, however, the directors found that none of the options available could address the issues at hand and decided the most responsible way forward was to close down the business and appoint liquidators.”
The company is owed just over $426,000 from clients for work completed, says the report. “These amounts have been invoiced and we will be writing to all debtors to recover the amounts due.”
The report reveals liabilities of more than $1.4 million - including $477,545 to ANZ as a secured creditor.
Almost $63,000 is owed to staff in holiday pay although the report says all salaries have been paid to date.
There is another $864,876 owed to unsecured creditors including $85,930 to 26 trade creditors.
These creditors include Air NZ Travel Card, Auckland Co-Op Taxi, political pollster David Farrar’s DPF Group, and several media companies including NZ Herald publisher NZME, Stuff and Newsroom - all of which are likely to be around news subscriptions.
“Additionally, c.$240k of capital loans is disclosed on the company’s balance sheet. We understand these balances relate to capital paid into the business by several parties and a c.$538k liability for the company as trustee for the purchase of retired partners’ units,” says the report.
Founding partner Neil Green stood down in March after 21 years and consulting partner Raphael Hilbron left in January. Another partner, Spiro Anastasiou, also left this year.
SenateSHJ managing director Brendon O'Connor.
Managing director Brendon O’Connor confirmed on Tuesday last week that staff had been advised of the closure of the New Zealand arm of the firm, and clients were being advised.
In a statement following Herald inquiries last week, O’Connor said 12 staff would be impacted.
“We have a fantastic team of people, the best in New Zealand, who work on incredibly interesting assignments with clients we love. The decision to close was not taken lightly but is the best choice for our firm and our people.
“We would like to thank all our amazing staff, past and present, and our fantastic clients who have made SenateSHJ a great place to work. We all feel lucky to have been part of a brilliant business over two decades. Our focus right now is supporting our staff and clients.
“The decision hasn’t been taken lightly. Fundamentally, in the last 12 months, we have experienced a tough and extended period of difficult trading conditions in a very challenging economy. The reduction in public sector consulting and contracting spend has been part of that.”
He said the move did not affect SenateSHJ Australia, which would continue as usual.
O’Connor told the Herald he could not comment on employment issues and “we can’t comment on what we’re saying to clients”.
Ruscoe said liquidators had written to the IRD to determine if any tax liabilities were owing.
“At this stage, we anticipate we will be able to make a distribution to preferential creditors, however, the quantum is unknown and subject to the recovery of debtors,” he wrote.
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
