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Father's failed Maclean Computing reborn as son's Maclean Technology in largest 'Phoenix' sale

UPDATE / July 20: The first liquidator's report has revealed failed Maclean Computers owed more than $3 million.

The company had a $1.07 million liability to preferential creditors (staff and IRD), $1.05 million to secured creditor ANZ and $930,000 to unsecured creditors.

Assets of $1.13 million are listed.

The IT services company's 91 creditors include ANZ, IRD and a roll call of tech firms that includes CallPlus, Cyclone, IBM, PB Technologies, Renaissance and various Telecom divisions including Gen-i.

The list also includes accounting company Hayes Knight. Haynes Knight director Matt Bellingham is a shareholder in the new Maclean Technology.

The report says a decision was made to despense with a creditor's meeting as their were no known issues.

Earlier, reciever Damien Grant, of Waterstone Insolvency, told NBR ONLINE that creditors were consulted over the sale of Maclean Computers' assets to the new Maclean Technlogy.

Creditors' approval was needed as a condition of Section 386D of the Companies Act – the so-called "Phoenix law" that allows for a liquidator to sell a business to a related party to the old company under specific criteria. 

The report notes that secured creditor IRD, owed around $300,000, will likely make a claim for outstanding GST and PAYE.

It also anticipates preferential claims from former employees for outstanding pay and holiday pay (Maclean Computing employed 50; CEO Chris Maclean did not reply to a query about how many people will be employed by Maclean Technology).

At present it is "unknown" whether unsecured creditors will receive any payout.

RAW DATA: Read the full liquidator's report (PDF)


July 18: The assets of Allan Maclean's Maclean Computing, which went into liquidation on Friday, have been bought by Maclean Technology, a new company set up by his son Chris Maclean and Hayes Knight director Matt Bellingham.

Receiver Damien Grant, of Waterstone Insolvency told NBR ONLINE the deal was done pursuant to Section 386D of the Companies Act – the so-called "Phoenix law" that allows for a liquidator to sell a business to a related party to the old company under specific criteria, which were met in this case.

Mr Grant was certain it was the largest "Phoenix sale" since the law came into effect in November 2007.

IT services company Maclean Computing was founded in 2003. Its current roster of clients includes Hyundai, Pharmacy Brands and Halls Transport. It claimed 50 staff servicing 200 customers.

CEO Chris Maclean told NBR the pressure of the recession was exacerbated after its financial controller, charged in May this year, allegedly stole $500,000. 

"Debts mounted and it all came to a head last week," Mr Maclean said, who took over day-to-day running of the company from his father – a high-profile figure in the IT industry – in 2009, in the teeth of the GFC.

The sale had proceeded at pace as rivals, including Code Blue, circled Maclean clients and attempted to poach clients (with gallows humour, Code Blue dressed up the process as an assistance effort).

NBR understands Maclean Computing owed around $2 million to IRD, banks and creditors, and had assets of around the same value.

Secured creditor IRD was owed at least $300,000.

Maclean Technology has a clean slate, free of debt.

Neither the receiver nor Mr Maclean would comment on the value of the Phoenix sale. Mr Maclean did say that he and Mr Bellingham had chipped in equity. Mr Bellingham had also been instrumental in helping to put the bid together.

Mr Grant did say it was enough to satisfy creditors, who were consulted during the sale process, and whose approval was required under the "Phoenix" law.

Chris Maclean told NBR that as well as the need to satisfy creditors, it was a competitive bidding situation.

"There were other parties interested in the business, but unfortunately, due to the time pressures, the liquidator were unable to seriously entertain any other offers," Mr Grant told NBR. 

Secured creditor IRD was owed at least $300,000.
Secured creditor IRD was owed at least $300,000.

More by Chris Keall

Comments and questions
34

"... its financial controller (charged in May this year) allegedly stole $500,000."

It's starting to feel like this is the 'rule' rather than the 'exception'.

A positive spin on a very shady deal that the industry is up in arms about on several of the industry forums.

Yet another example of leaving creditors in the lurch while they carry on happily.

An orchestrated, strategic liquidation while it is business as usual, for the team who steered the ship onto the rocks.

Where does this leave the number of employees who had filed PG's against the company ? I guess like other creditors, no chance of justice......

In Reseller News Chris MacLean states "We tried absolutely everything to sort this out including hundreds of thousands of dollars from the wider family". This article states their old financial controller stole $500k, yet MacLeans owe their creditors $2,000,000. Come on guys don't use use excuses...... this down fall was casued by poor customer service....as an ex custoemr I know! I bet you haven't sold the car yet Chris.....I hope this comes back to bite you.

There are rumours doing the rounds today that
a) the new entity was formed in November
b) some staff were offered new contracts to review pre-liquidation
c) some customers were given new contracts pre-liquidation
Phoenix Law indeed!
And management has obviously been under a great deal of stress with all the upheaval. Here they are last week trying to rescue the business
http://www.maclean.co.nz/maclean-boardroom-boat-race-championships/

**IT Happens...is the rather apt ad headline running beside this story. And $2 million **IT is happening to McLean creditors, staff and customers. Surely, this new McLean Phoenix can't rise from the ashes without a considerable amount of that **IT sticking. How are customers - already in revolt over sub-standard service levels - going to feel about signing up for the new entity?. Is this Phoenix going to attract and keep high calibre staff? Are suppliers going to be comfortable supplying products and services? I think the industry has already written the catchy marketing slogan for the new McLean company? "We make **IT Happen".

cowboys, if anybody is out there that have companys have to pay ird and banks money owed, yet these cowboys can do what they want, why dont we all liquidate and wipe slate clean so we dont have to pay any of our debt to ird and banks. this is shocking that chris mclean is allowed to do this, only in nz this could happen.

Obviously set up a lifeboat with funds that should have gone to creditors, more fool us to allow this legit status.

Interesting that Chris is cast as the white knight. hasn't he presided over a drop in revenue of the order of 50% over 4-5 years he has had the leadership? So what is going to change Chris? Allan handed over the reigns to you at the top of his game, any other company would long ago have dispensed with your sevices as CEO. more fool Allan...

Former employee here. Can't (and won't) comment on the ethics or otherwise of this manner of leaving debts behind.

I can say that this does reflect on just how hard it is to get managed services as a product right. A fixed price to look after a company's IT infrastructure in an NZ market where people are notoriously reluctant to spend what is needed to keep things running right. Getting that price point right is not easy. Added to it is that managed services makes you a commodity, just like telephony and electricity. Something to be dumped just as soon as a better deal comes along.

The only thing you have playing for you in such a market is your people and their relationship with the client. The fact that Maclean has kept (and I hope will continue to keep) long term customers reflects on that relationship.

I'm a client of CodeBlue and they have got their Managed Service solution right.
Maybe it just needs someone who knows what they are going and can run a business properly to be successful

Have they? It's rather unusual for clients to be told whether the service they're be provided with is only just profitable or massively profitable. How did you find out?

I too am a client of CodeBlue and am extremely happy with their services and being an ex-Maclean's client, I can see exactly how they got to where they are. Unbelievable what they have gotten away with

So many "anonymous" CodeBlue clients...

You're not fooling anyone, guys. Dirty.

Any business needs good people, that engender trust and respect y your customers.

I run a profitable managed services business, it's not impossible, in fact simply doing what you say you will do, being brutally honest and having solid cost models seems to work for us.

I agree completely that it is all about relationships in managed services. Lets face it, if you don't have that relationship, then you are just another supplier of a commodity and will be dumped the moment someone else comes along and offers to do the same thing for $50 a month cheaper.

Nice try Chris

Don't know how everyone can continue to defend these guys!! They run the business into the ground, go into liquidation and then two days later buy it back under a "different" name. What about all the creditors who are going to lose money??
This, while "legal" reeks of the recent Financial Companies debacle where lots of people lost a lot of money and yet directors are still living the high life and some have got off scott free.
MacLean Technology was listed in Nov 2011. They take all the staff out for drinks to celebrate how they have now got a “debt free company”. I bet the ‘30 and 40 Maclean Computing creditors (who will lose) “will be around the $1 million mark” are celebrating as well!!

So that's really cozy for Chris and Matt but what about the rest of the "senior" players?

Is Chris's father-in-law, Mark, involved in the new concern????

Of course he is.

Well done post #16 Finally someone has asked the right question about the father-in-law.

Lack of leadership, startigic vision and decisions done in secrecy without engaging the main stakeholders, staff!

"Loyal employees in a company create loyal customers, who in turn create happy shareholders. The process sounds easy but it’s not"

Let's not forget the moral story here,
Are we promoting new practices here, with "Phoenix law"
Where business can escape and dump creditors and then start fresh with few "hard to swallow " stories!

Was there really a "competitive process" on the sale? In 48 hours? Did the liquidator REALLY follow due process?

The moral story is:
The wake up call this saga ignited is loud enough to prevent such practices (Liqudation-Sell to same owners /different names-Trade again under failed leadership).
Professional & independent advisory comments need to be seen to reassure the public of such practices.

Stated above, the liquidator says the Creditors were consulted during the sale process.

In the Liquidators Report, however, is Appendix A noting the liquidators decision to dispense with meeting with the Creditors.

Clear as mud.

My heart bleeds for Alan Maclean, a truly ethically and morally aligned operator whom has lost what took a large part of his life to build due to the incompetence and the ego driven approach of those he trusted to take on his legacy.

It always amazed me how much radio advertising they used.

Yes, a company instantly born out of the ashes of a failed firm that couldn't pay employees or taxes is precisely the sort of firm I would entrust the information security of my medium sized enterprise with.

This should be investigated further and the transaction unwound if necessary. Phoenix laws are a disaster for honest creditors.

Yet again there is a failed business that did not pay GST and PAYE. This should raise red flags and force a solvency test, not just incur penalties.

A porly managed company indeed. As an ex major customer's CEO (unaffected fiscally by the liquidation) I had moved my business away upon taking the helm after meeting memebers of the MacLean family a little over a year ago.

Are we missing something here?

"it was a competitive bidding situation" How this could be quantified ?

This comment is total speculation, but if Allan let Chris run it out of some sort of family "blood Is thicker than water" moral obligation, then this is another example of fathers doing their sons more harm than sacking them when it's clear they are not competent.