Adholics, a media agency which roared into life three years ago, fueled by a young team, has quietly gone into administration.
At its peak, it had 15 staff, all under age 30, and growing with healthy client roster. The lights went out with five people on the books.
The media agency was in mid 2022 drawing staff from the bigger players, including GroupM and The Media Store.
At the same time, Adholics was claiming to be handling $10 million in billings after winning a series of pitch wins.
In the end, it was a quiet death, a cash flow issue.
“We were a commission only agency with no clients on retainers,” one told AdNews.
The insiders, who didn’t want to be on the record, say ex-staff are employed and working hard to continue and build their careers.
Jake O’Donnell, who was just 20 when he founded the agency in Melbourne, was, according to documents lodged with corporate regulator ASIC, in Bali.
AdNews has confirmed he has been in Bali for several months. Those close to him say he is spending time working out next steps.
The final days of the agency are still unravelling.
Insiders say the end started when a major client failed to pay, creating a cash flow crisis.
“We were battling on pitches that were too big for us,” one insider says.
“We had clients, with their own financial issues, default on six figure bills. Ultimately it caused us issues.”
The agency was persuaded to call in a voluntary administrator, Terry Rose of insolvency experts SV Partners, on August 1.
“We engaged a specialist firm to assist us in a turnaround,” the insider says.
“By the time additional funding would have been secured to correct the issues, we were too far down the process … and ultimately it was in the best interests of all parties to cease trading.”
The administrator stopped Adholics trading on August 15 and terminated all employees
A meeting of eight creditors, with claims totalling $704,685.68, was held on September 5.
Creditors, according to the administrator, include ARN, GO TRANSIT MEDIA, JCDecaux, Money Magazine, oOh!, Nielsen, Octomedia and Moove, the ATO (Australian Tax Office), Q Media plus staff.
The remaining staff have gone to the Fair Entitlements Guarantee, a legislative safety net scheme of last resort. AdNews has been told this is for redundancy payments and not for any owed salary.
The meeting of creditors was told Adholics was insolvent. The creditors appointed administrator Terry Rose as liquidator
Total assets were put at $1,527,062, including a related party loan of $793,808 to founder Jake O'Donnell. Trade debtors owed $494,544. Liabilities were calculated at $1,660,162.
Founder O'Donnell has a property portfolio which, insiders say, he is liquidating.
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