Melbourne Storm

Disgraced sports administrator Brian Waldron, the man at the centre of the Melbourne Storm salary cap breaches that cost the club two premierships, has been dragged into the collapse of a clothing company that makes uniforms for grassroots sports clubs.

A week after telling staff at the collapsed clothing firm Kombat the firm was unable to pay their wages or entitlements, Waldron is leading a new company called Kombat Teamwork, which hopes to buy the assets of Kombat Pty Ltd.

As SmartCompany reported yesterday, Kombat was placed in the hands of administrators Andrew Beck and Paul Stewart of RSM Bird Cameron on December 17. The business, which employed 80 staff and had annual revenue of $10 million, was a subsidiary of ASX-listed group Beyond Sportswear International.

BSI, which has been struggling with poor trading conditions, told the ASX on December 17 — the same day Kombat was placed in administration — it had completed a deal by which it would spin off its key trading operating subsidiaries, including Kombat, to Melbourne businessmen Rod Butterss and Mark Kellett. Butterss was the president of AFL club St Kilda between 2000 and 2007, while Kellett was a former director of the club.

In a meeting with staff held days before Kombat being placed in administration — the audio of which has been posted on YouTube — Waldron told workers he was the third largest shareholder of BSI and had been brought in by Kellett to examine the state of the business.

He told the staff the situation was “grim” and they would not be paid their wages or entitlements, although promised they would be able to claim them from Kombat’s liquidator or through the Federal Government’s GEERS scheme, which guarantees a level of entitlements in the case of company collapses.

Waldron told staff the owners planned a “reorganisation” of Kombat, whereby the company would be placed in liquidation (although it is only in administration at this stage) and a new business entity created:

“We have had a meeting with creditors … and with their support it looks like in the next three or four days we’ll undertake … a reorganisation of the business which will see us move Kombat into a new entity. This entity will commence as soon as possible. We’ll eventually move the old BSI into liquidation to ensure all creditors receive the entitlements and creditors also being staff.

“Hopefully the business moves forward without all its existing debt, with its very good book of contacts, with its very good supply that it does deliver, but without the constant hassles of not making payments and the overheads that we’ve managed to keep.”

The plan appears to have been in place for some time. According to records from the Australian Securities and Investment Commission, Kombat Teamwear was set up on December 5. Mark Kellett is the company’s sole director.

Kombat administrator, Andrew Beck of RSM Bird Cameron, says Waldron is not a shareholder of Kombat, which is 100% owned by BSI. “I’m not sure what basis he was dismissing the employees but the comments are of interest for us in our investigation going forward,” he said.

“The assets of the business are under our control including IT systems, the customer list and equipment.”

Beck confirms the newly created Kombat Teamwear is one of the potential buyers of the collapsed Kombat business. “We have had three approaches from different parties and Kombat Teamwear is one of them,” he said.

“We are still in the early days of the whole process, but with three approaches already there should be some competitive tension.”

Beck says as the employees were dismissed before the administrators were appointed it is unclear what the status of their entitlements is — but if Kombat is liquidated the employees will be protected under government legislation.

“If Kombat goes into liquidation as a result of this process, that will trigger their rights under GEERS; that is likely once the assets are sold as nobody has come forward proposing a scheme of arrangement,” he said.

Waldron and Kellett were contacted for comment but did not respond prior to publication.

*This article was originally published at SmartCompany