Parents owe $1m to collapsed business
A Canterbury based after-school care business that has been criticised for leaving families in the lurch after it collapsed with little notice is owed about $1 million by parents.
Four companies connected to the Mash and Caspa childcare businesses went into liquidation last Friday with parents notified of closures only four days before. Another associated company, Magic Kids, was placed into liquidation on Monday.
The companies ran programmes, some subsidised by the Ministry of Social Development, at about 40 locations, mainly in Canterbury. The subsidies were paid to qualifying families and some grants went to the provider.
Brenton Hunt, who has been appointed liquidator of My After School Headquarters, Caspa NZ, Mash International, Commando M 2017 and Magic Kids Club, said about 1200 parents owed about $1 million to the businesses.
He would be sending out 1200 emails asking parents to pay their bills, he said.
When money came in, he would first pay staff their wages and entitlements and the companies’ director Craig Fortune had promised to pay any shortfall (to staff) from his personal assets. Hunt said he also hoped to pay parents who had prepaid for care.
IRD was owed about $600,000 in overdue GST and each company owed about $50,000 to unsecured creditors.
Hunt said from his initial review it appeared the operation had “just got too big” for the owners, who had not confronted the difficulties, as well as they might have. Numbers using the services had reduced.
Fortune had put considerable amounts into the companies, Hunt said.
It also appeared the Magic Kids business soaked up a lot of capital after Mash bought it in 2022.
The businesses had been impacted by Covid and been in difficulty since, Hunt said.
A Land Rover Defender, valued at about $130,000 and bought new by Fortune in April 2022 on behalf of Mash International, would be sold to meet debts, Hunt said.
He was also aware the couple had bought a 1300sqm section in Methven for $250,000 in June 2021 but did not know Fortune took his family to Bali for a holiday early last year.
His official report would be available by the end of the week, Hunt said.
Meanwhile, there are still questions about why Fortune, who blamed the collapse on the business not generating enough income, left it to March 4 to warn parents the business was closing in four days, leaving many with little time to make alternative arrangements and also owed money if they prepaid.
Fortune posted on the professional networking platform LinkedIn about two weeks ago saying he was “looking for a new role” and was seeking connections or opportunities.
On February 16 he presented documents registering a new company called Kids Matter 2024 naming his partner Nicole Pickard as the sole director and himself and Pickard as equal shareholders.
Pickard, a former police officer, was an employee of the after-school businesses now in liquidation.
When first questioned about the newly registered company, Fortune said it was “a potential way forward” before later saying it’s “just a registered entity”.
Fortune’s companies have received considerable help from the taxpayer getting about $1.8m in Covid wage subsidies.
Caspa NZ, for instance, received three instalments totalling $500,730 for 44, 47, and 50 employees respectively.
Asked a series of questions by email and letter, Fortune said he was angered by the media response to the closures and said the estioning had “ruined his life”.
He said he had documentation to show ery cent of the $1.8m had been paid to employees.
He did not respond to questions relating to when he knew he had to close the businesses or whether it was wise to take his family on an overseas holiday when his business was not in good health.
Alan Liefting, who owns Ecotech services, a business which repairs and refurbishes computer equipment and power supplies, said he had been chasing Fortune’s company to pay a $108 bill for laptop repairs since August last year.
He was just about to go to court to recover the money – more out of principle than because of the amount owed – when he learned about the liquidations. He was never told the company was in trouble and had wasted a lot of time chasing the debt.
Mash was founded by Fortune, now 49, in 2012, when he was a registered teacher with 10 years’ classroom experience. At the time he had four young children.
Community groups have jumped in to assist parents left in the lurch by the closures.
The Queenspark Community Trust offered to provide care Monday to Friday from 3-6pm at the church hall where Queenspark Mash had been operating.
Eastern Community Sport and Recreation has also said its after-school programme Rawhiti Oscar has capacity to take on new enrolments for its regular and April school holiday programme.