Anger continues to build at the mess left behind by former business lounge operator Bureaux, with a stream of former clients and creditors still searching for money and answers.
Bureaux owner Rowena Murray announced on December 8 that the company had given up on attempts to re-open in business lounges and serviced offices in Melbourne and Sydney and said the “entire Bureaux business” had been handed to an “accounting firm to complete the wind-up”.
But ASIC records show that two months on from the closures, this is yet to officially occur. Neither of the two companies owned by Murray, Bureaux Operating Pty Ltd and Bureaux Australia Pty Ltd, have been placed in the hands of administrators, receivers or liquidators.
This means former suppliers and clients have not yet had a chance to register as unsecured creditors and begin the process of recovering any funds still left in the business.
However, Murray has told SmartCompany the business will be placed in the hands of administrators from Melbourne firm Brooke Bird in the coming days.
She said she would have preferred to place the company in administration prior to Christmas, but the holiday season meant this did not occur.
Peter Goodin, a partner at Brooke Bird, says the administration will be formally initiated “shortly”.
“We have also held discussions with the secured creditor for the company who is in agreement for the process proposed by the director. We do not have any further specifics until we are formally appointed and can commence the necessary investigations and recovery of assets for the benefit of all creditors.”
Bureaux operated a member-based serviced office business aimed squarely at small companies and solo operators. These business people could use the business lounges as a place to conduct meetings and functions with clients and staff, and could also use Bureaux’s CBD addresses as their own, providing entrepreneurs with a way to “underpin your business credibility” according to the company’s website.
However, problems began to emerge in the second half of 2010, with Bureaux informing clients in early November that its Melbourne office had been closed over a dispute with the company’s landlord – the former owner of the business, Ian Trevallion.
But the office was never to re-open. The Sydney office closed shortly after and an office in Brisbane that had been due to open in October was also abandoned.
On December 8, Murray told clients in a group email that she had been forced to give up the fight to resurrect the business.
“We have fought incredibly hard to regain possession of the sites and to continue to operate the business. All of these efforts, false starts, commitments and agreements have failed, and the entire Bureaux business has been handed over to an accounting firm to complete the wind-up,” Murray wrote.
“Up until yesterday, we genuinely had a fighting chance of re-opening, to the point of signing new lease documents, but it simply can’t go on without the support of a few key stakeholders.”
Since that email, a swag of former Bureaux clients and creditors have struggled to track Murray and Bureaux representatives down.
Mark Smith of Brisbane-based property firm Wateridge Australia paid about $1,500 in July 2010 to become a member, hoping to use the Brisbane facility when it opened.
“I started to get worried when I didn’t hear anything for months and months and months,” he told SmartCompany.
“There’s been absolutely no correspondence. It’s not a huge amount of money, but it’s money nonetheless.”
“I’ve spent $700 on business cards with the Bureaux address and they are useless.”
Maria Abadilla was both a former client and a creditor, having done a small amount of work for Bureaux in Melbourne.
She used debt collectors to chase unpaid invoices, but even the experts couldn’t prise cash from Bureaux. Abadilla says that after about a year of chasing, she finally gave up.
Mark Reading paid a massive $6,000 for a top-level 12 months membership just two months before the Melbourne office collapsed, while Bonnie Power joined just two weeks before the closures.
“We’ll survive, but it’s just the inconvenience of what they’ve done,” she says.
But Murray says three quarters of her former clients paid on a month-by-month basis and is only a “vocal minority” that are owed money.
“There are only a very small number of our members who will be out of pocket,” Murray says.
However, she would not disclose the amount owed to other creditors.
Murray says she is working directly with the administrators but says there are no plans to re-establish Bureaux, as the dispute with landlord Ian Trevallion had taken too great a toll on the reputation of the business.
“Our landlord did too much damage to the business. Without the premises we just couldn’t operate Bureaux.”
Ian Trevallion sold the company to Murray in 2008, but retained the property on which the Melbourne and Sydney lounges sat.
Murray says she, the administrator and a group of key creditors and stakeholders are considering their legal options in relation to Trevallion’s actions.
But Trevallion told SmartCompnay he is unfazed at the prospect of legal action.
“On what basis? She just didn’t pay the rent.”
Trevallion also denies Murray’s claim that he was in some way to blame for the collapse of the business.
While he acknowledges there had been a dispute with Murray over claims she had been misled about financial state of the business – a claim Trevallion strenuously denies – this had been resolved.
But by the middle of the year Trevallion says the unpaid rent was mounting and he was eventually forced to bring in two security guards to shut the Melbourne office in November 2010.
He claims he is owed $300,000 and estimates the total debts of the company at $800,000-900,000.
“The only thing that happened is that she started to go in arrears as people do when they are running out of money. She’d give us $20,000 here or $20,000 there, but she didn’t want to pay the rent.”
He says he will continue to try to recover funds from Bureaux and Murray, but is not hopeful.
“We’ll keep chasing, but I don’t think the cash is ever going to appear.”
Trevallion is attempting to recoup some his losses by re-leasing the Sydney facility, which is now back up and running under a new company.
Trudy Gilbert, who operates dating agency Elite Introductions and is a former Bureaux client, has taken over the lease of Bureaux’s premises and has launched a new business lounge.
However, Gilbert is at pains to point out that she is not connected in any way with Bureaux or its management.
She says she was a former client of Bureaux and is owed money by the business herself.
“I was a previous member. I love the place and I didn’t want to see it go to pieces. We aim to bring life back to the business under a new design and a new structure and a new vision.”
Gilbert plans to make the business more of an exclusive business club, with fewer members and slightly higher prices. She has started contacting former Bureaux members to gauge their interest.
“We are very happy to work out a relationship and keep them on. We are very happy to help people move on.”
Murray says she is aware of the new operator in Sydney but says she doesn’t “support or endorse it in any way”.
Trevallion says he has given the new owners eight weeks of free rent as they seek to restart the business. He says Sydney was always the most viable part of the business.
“Will Sydney do well? I don’t know. But the demand is still there.”
Having reflected on the closures in recent weeks, he says the Bureaux mess has left him with a valuable lesson about growth.
“The lesson in what we did is that we opened two sites too quickly, thinking that we were shit hot.”
Disclosure: SmartCompany’s advertising network, First Digital, is a creditor of Bureaux.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
