An Australian tech company has become the latest victim in the country’s struggling startup sector after it collapsed earlier this month.
Sydney-based FirmGuard Pty Ltd, which taught other companies risk management and compliance requirements and issued $2.3 million worth of private shares, went into liquidation on August 1.
The company allegedly failed to pay staff members their full salaries or retirement in the months leading up to their disappearance and one employee was in the process of taking legal action when the company went bankrupt.
A former staff member alleged that a damning text message showed that the company’s founder and CEO, Dan Ussher, tried to keep his business afloat by manually paying the worker with his own funds.
Former employee Andrew Tierney, who worked as FirmGuard’s general manager for 18 months, claims he is owed $150,000 in unpaid wages and salaries, which he says went unpaid as of April of this year.
Tierney, 55, begged for his salary and eventually hired an attorney.
He then received an unusual text message from his boss, Mr. Ussher, who sent him a receipt showing that he had been sent $1,000.
“I have put $1k into your account from my savings while I get this shit sorted out,” Ussher wrote in the text message, seen by news.com.au.
However, this money never made it to Mr. Tierney’s bank statement.
“(The money) didn’t come through,” Tierney told news.com.au. “[The situation] It was making the hairs on the back of my neck stand up.”
In the text message thread, Mr. Ussher sent her a manual receipt and in subsequent messages assured her that the money would arrive.
Another $1,500 was transferred in the same manner, this time arriving in Mr. Tierney’s account.
“That was the last I really heard from him (Mr. Ussher).”
Tierney claims he was then fired from the company on July 28 and just three days later, FirmGuard appointed liquidators.
Ussher told news.com.au that he would not comment on the matter.
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Tierney alleged that he stopped receiving his full salary since April and between May and July of this year he did not receive any of his salary.
“I used up all my savings because I wasn’t getting paid,” Tierney said.
“I’m sitting there thinking, ‘I’m going to be kicked out of the house, I won’t be able to put food on my son’s table.'”
Around the same time, other “red flags” emerged.
He says he knew of a contractor who had also not been paid and a company that cut ties with FirmGuard, both of which appeared on the trustee’s list of creditors.
He then received an email from a US debt collection agency representing a technology company called ZoomInfo, claiming that FirmGuard owed them $18,000.
Mr. Tierney wanted to quit, but was hesitant because he had invested $50,000 in FirmGuard and claims he was also owed about $50,000 of retained earnings, which is where he received a lower salary because he would be receiving two large payments each year.
“In the run up to July 28, I was thinking, ‘Should I go, should I stay?’” he said.
“I was in a very difficult position. There was investment money, there was another $50,000 of retained earnings, it’s not just a few months of earnings.
“I felt a bit trapped. If it was one or two weeks (of unpaid wages) you could find another job and move on, but when it was around 150 thousand and something, I would get stressed.
Tierney said it has affected his health and in late June he was rushed to hospital by ambulance over fears he was having a heart attack.
Doctors concluded it must have been a panic attack due to the stress he was under and subsequently put him on a mental health plan.
Tierney also emailed investors and shareholders informing them that they owed him money.
However, after sending the email, he was fired.
“It’s been bought [sic] to our attention that on Wednesday July 20, 2022 at 11:06 am you sent an email from your FirmGuard email account entitled ‘Investor Notice’ to the FirmGuard Advisory Board and investors notifying complaints and allegations towards FirmGuard Pty Ltd”, the termination letter read.
“In this email communication and follow-up phone calls that I am aware of, you made or attempted to make various disparaging statements and false accusations.”
The email surprised Mr. Tierney, but days later, when the company went bankrupt, he believes it was because FirmGuard couldn’t afford to keep staff.
The terminated employee filed a workers’ compensation claim and the results of the investigation are expected in October.
He also contacted the Fair Work Ombudsman over his unpaid wages and the Australian Tax Office over the pension he was owed, as well as seeking to take action for unfair dismissal.
However, these government organizations cannot help after a company goes into liquidation.
According to a liquidator’s report on the FirmGuard collapse published on August 14, $2.3 million in equity was issued to investors, but only $113,000 was repaid.
Most of those shares were owned by Mr. Ussher, who invested $2.2 million in his company. Tierney was the second largest shareholder.
FirmGuard has 16 creditors chasing you for at least $320,000 that they claim is owed to them.
However, that number is expected to be much higher because the $150,000 that Mr. Tierney claims he is owed was not included in the report. He simply says that he is owed an “unknown” amount.
Two other creditors, the Fair Work Commission and iCare, are also listed as “unknown” in terms of the amount owed.
The Australian tax office is owed $150,000.
News.com.au has contacted the liquidator, Christian Sprowles of HoganSprowles, for comment, however emails and phone calls went unanswered for several days.
industry in crisis
Tech companies are struggling across Australia as investors have been spooked by dramatic drops in valuations, making it harder to find funding.
The latest tech outfit to be affected was a Melbourne-based esports startup called Order, which raised $5.3 million in funding last year but collapsed last week with liquidators looking to urgently sell the business.
Then there was an Australian tech company called Metigy, which left staff “shocked” by its sudden collapse earlier this month, after it planned to raise money at a $1bn valuation.
Last month, Australia’s first neobank founded in 2017, Volt Bank, went bankrupt and 140 employees lost their jobs, while 6,000 customers were told to urgently withdraw their funds.
Other failed businesses include grocery delivery service Send, which was liquidated at the end of May after the company spent $11 million over eight months to stay afloat.
A Victorian food delivery company called Delivr that billed itself as a rival to UberEats and Deliveroo also collapsed in July when it became unprofitable, despite making more than $6 million worth of deliveries since it launched in 2017 and had 18,000 customers. customers.
Last month, news.com.au raised questions about another Sydney-based technology company, D365 Group, which makes software for healthcare, real estate and accounting.
Staff claim they have not been paid properly for months and a contractor took the company to court claiming that their debts were not paid. D365 Group is due in court in late August.