Independent creative agency Red Engine SCC has gone into voluntary administration with liabilities of more than $4 million, including staff entitlements and an unpaid tax bill.
CEO Julian Townley, a former sales manager at Ten and at Yaffa Media who founded the full service agency in 2012, confirmed today Red Engine was continuing to trade.
Christopher Darin, a partner at solvency management firm Worrells Solvency & Forensic Accountants, had been appointed administrator.
The firm is reviewing the company’s financial position and options, including a trade sale. Worrells said: "The company’s business has been advertised for sale and the administrator is also in the process of exploring avenues for a Deed of Company Arrangement with the director.”
Industry insiders say the issues at Red Engine pre-date the coronavirus crisis, with long-standing debt to the Australian Tax Office (ATO).
Staff at Red Engine say the company made an announcement on March 27. "All staff were let go on pay day and informed that the company couldn't make payroll," one told AdNews.
Another said: "We are all gutted and trying to move forward in this crazy time."
The company owes money to its employees and others, according to documents filed with corporate regulator ASIC.
In turn the company, Red Engine Strategy Content Creative Pty Ltd, is also owed money and has some assets, including plant and equipment.
Annual leave, superannuation and redundancy payments totalling $415,450 are owed, including entitlements for 13 staff.
The company also has bills and loans outstanding totalling $3.7 million, including $909,360 to the ATO.
It is owned $520,924 from a range of clients and others, including NSW Trains, PepsiCo, Peugeot Citroen Australia, Rest Super, Telstra and Princess Cruises.
Red Engine won the Princess Cruises’ social media and content account last year in a competitive pitch against incumbent MediaCom.
Assets include cash of $7,549. The founder’s car is listed as an asset valued at $60,000, plant and equipment at $143,401, a lease bond of $63,250 and shareholdings of $12,500.
Last year Red Engine acquired SixtyFour Films, a Sydney-based business started in 2012 to service demand for branded video content on digital and social platforms. Its clients included Nimble, Pernod Ricard, News, Tag Heuer and Service NSW.
The commercials to that deal were not revealed.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.