Bouris’ bump on road
THE mortgage broking group led by Celebrity Apprentice Australia host Mark Bouris has been taken to court by a former business partner to settle a dispute over a performance bonus.
Yellow Brick Road announced yesterday that it had been served with a suit over earn-out provisions in a deal struck with non-bank lender Resi Mortgage, which it acquired in 2014 for $36 million.
As part of the deal, an earnout amount of up to $2.5 million in cash was agreed to be paid by Yellow Brick Road to the owners of Resi after a year of ownership if the business performed well.
Resi foundational shareholder Peter James was made the head of lending for the Yellow Brick Road-owned business once it was subsumed, but left the business in 2016 after a difference of opinion with the new parent group.
At the centre of the departure was the earn-out dispute between Mr James and Yellow Brick Road over what was described as a perceived change of conditions.
“The proceedings deal with the issue as to whether the earn-out conditions have been satisfied or not,” Yellow Brick Road company secretary Richard Shaw said.
“Based on advice it has received to date, YBR is confident that its interpretation of the share sale agreement is correct, and that no earn-out amount is payable.
“YBR intends to defend the proceedings.”
Although it booked its maiden annual profit last financial year, Yellow Brick Road has faced many hurdles.
The group’s share price is languishing at less than 10c a share — well below the 70c price it traded at in 2014.
Cornerstone investor Macquarie has sold down its stake in Yellow Brick Road from 18.4 per cent to 7.8 per cent.
Mercantile Investment Company increased its stake in the group from 9.1 per cent to 19.9 per cent.
Despite lofty ambitions for the mortgage lender and wealth manager, which made its stockmarket debut in 2011 with the aim to take on the banks, Yellow Brick Road shares have suffered.
The rout has wiped about $150 million in value capitalisation from the financial adviser and lender and behind unhappy investors.
Mr Bouris, best known as host of former Nine Network show Celebrity Apprentice Australia is now hosting Seven Network small-business program The Mentor.
The executive chairman at Yellow Brick Road, he made his fortune selling Wizard Home Loans to GE Money early last decade.
Yellow Brick Road went through a period of significant acquisition-led growth, buying out four separate companies in two years. left