Worker misconduct causes collapse of health food store
A HEALTH food store which made 'no sales' for two financial years has blamed its collapse on a former employee's misappropriation and failed plans to expand into Byron Bay, according to an administrator's/liquidator's report.
Blessed Health Foods operated at Bundall on the Gold Coast and Byron Bay in northern New South Wales before it was put into administration on December 10, owing $230,000 to creditors.
The company self-described as "a healthy and growing business" with a "youthful spirit".
"Our aim is to rejuvenate people, our planet and improve health and happiness through education," its description noted.
A report on the company, authored by Brendan Nixon of SM Solvency Accountants and handed to creditors, noted the accuracy of the company's financials was "uncertain".
Director Shane Reynolds, who was himself bankrupt in 2014 after owing $812,000, blamed the administration of Blessed Health Foods on low cashflow among other problems.
According to the company's profit and loss statement for 2018-19 and 2019-20, $0 in sales was recorded.
"The company's demise was due to inadequate cashflow, an abandoned plan to expand to Byron Bay NSW, a breakdown in relations with a potential investor, and misappropriation by a former employee," Mr Nixon's report noted.
He said the company appeared to be insolvent, and recommended it be wound up.
Creditors are unlikely to see any cash, with a dividend likely to hinge on the outcome of any claim against the director.
"The pessimistic estimated return to unsecured creditors is nil," Mr Nixon said.
In December dozens of businesses were placed into administration or liquidation.