Sour taste as Puppie put on ice

THE company behind the iconic Slush Puppie business in Australia should be investigated for potential insolvent trading and wildly-inconsistent business valuations, its liquidator has claimed in an explosive report to creditors.

Doggone Qld was placed in liquidation in February after a court-ordered wind-up order over a $60,000 debt.

Doggone liquidator Stirling Horne has revealed the Slush Puppie business and stock was transferred to a related company for less than 20 per cent of what it had been valued at after the company obtained a second, far lower, valuation.

The Slush Puppie business had traded as Slush Puppie Pty Ltd for 23 years before changing its name to Doggone Qld ahead of the business selling to a related company last year.

The related company was then renamed Slush Puppie Pty Ltd and it continues to trade the popular ice drink from its Nerang depot.

In his report to creditors, the Doggone liquidator said his report identified possible recovery actions, which required further investigation, including potential insolvent trading and uncommercial transactions.

Doggone Qld owes $59,347 to one unsecured creditor – Robert McCallum, a former business associate who won a court claim against the company.

The transfer of the Slush

Puppie business out of the original company meant it ceased trading and was unable to pay the court-ordered debt.

Mr Horne’s investigation found the now-failed company commissioned two valuations of the Slush Puppie business before it was sold to the new company.

Both companies have businessmen Frank and Murray Stafford as former or current directors and major shareholders.

The report to creditors said the Slush Puppie business and stock sold to the new company for a total of $66,000 on February 28 last year. The sale was based on the second valuation, which was substantially lower than the first.

It said the other valuation, completed two months earlier in December 2017, had valued the business and stock at $393,200.

Further, Mr Horne said the company’s crucial licence to manufacture and distribute Slush Puppie products in Australasia “was transferred as part of this sale of business for apparently no amount”.

After trying “multiple” times since February, through Slush Puppie lawyer Richard Holt, to access the company’s past financials, Mr Horne said an incomplete Report on Company Activities and Property was provided on March 26.

The creditor’s report said the full company activities report was not provided until last Friday, after he’d applied to ASIC for assistance under the Liquidator Assistance Program.

It said Mr Horne was yet to receive the full books and records of the company and that there were “some indicators” the company may have been unable to pay its debts.

He said more investigations were needed once the full records were retrieved.

The report said another company owned by the Stafford family, SPA Property and Investment, registered a security interest against the failed Slush Puppie company for a debt of $129,303, however the liquidator did not have enough information to assess its validity.

Replying to the Bulletin’s questions about the creditors’ report, Mr Holt said neither he nor Frank Stafford had received any requests from ASIC to produce documents.

He said there was no evidence of insolvent trading at the failed company.

“There were no uncommercial transactions and the sale of the business was underpinned by the valuation obtained at the time of the sale of the business,” he wrote via email.

Mr Holt, himself a former director of the related company SPA, would not confirm whether or not the valuable Australasian licence for the Slush Puppie brand had been transferred free of charge between the old and new companies.

He also declined to say who made the decision to sell the Slush Puppie business on the substantially lower valuation and why the decision was made.

Mr Horne said the liquidation was likely to take at least another year.