Car Auction Blues

By: Unique Cars magazine

Date: 02.02.2018

Mossgreen goes under $12 million in debt

Auction House Mossgreen has collapsed under a $12 million debt.

It has been reported that an orderly wind-down by administrators BDO will now take place after it was unable to proceed with a proposed restructure.

This dramatic step was taken following the Australian Securities and Investment Commission announcement that voluntary administrators had been appointed on Decemeber 22, 2017.

According to an article on December 26 on The Age newspaper website, Mossgreen CEO and co-founder Paul Sumner claimed that creditors will not be out of pocket, but the reported BDO statement on January 17, 2018, made no reference to whether Mossgreen's 400 creditors will receive any money or what has happened with vendors' proceeds from previous auctions.

At the time of the voluntary administration, Sumner claimed the move was due to debts following the company’s expansion and the withdrawal of a key investor.

Corporate advisor BDO was appointed as voluntary administrator with Andrew Sallway, Nicholas Martin and James White undertaking an urgent assessment of the business and exploring all options.

The first creditors meeting took place on January 4, 2018.

Reporting on that meeting, Carolyn Webb of The Age wrote that Mossgreen has debts of $12 million and, when asked about creditors getting their money back, a former director said, "It doesn’t look good."

Administrators BDO told creditors that Mossgreen had assets of $3 million and up to 400 people were owned money.

The biggest creditor is Toorak businessman Jack Gringlas​, with his family company, Jadig Investments, owed $6 million. 

It is understood that Mossgreen owes vendors $5.8 million, with the remainder owed to unsecured trade creditors.

Vendors who had consigend goods to Mossgreen will be contacted and arrangements will be made for their return, following a stocktake.

Mossgreen ran the 2017 Classic car auction at Motorclassica, headlined by the most expensive car to be auctioned in Australia, a D-Type Jaguar.

Although it passed in after failing to fetch its advertised estimate of up to $8 million, it did receive a genuine bid of $5.5 million on the night.

Earlier in the year Mossgreen sold the ex-Bob Morris 1977 Holden Torana A9X race car for $705,000, believed to be a record for an Australian touring car of that era.

It realised the same figure for NSW registration plate ‘36’ and auctioned the collection owned by motor racing identity Clem Smith.

According to the BDO statement, offers to buy the business would be considered and expressions of interest sought.

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