Update (20 January 2020): A Federal Court in WA has since ordered Magnolia's purported administration of The Agency will have no effect, following an application for an injunction from the targeted property company. Click here for more.
The Agency Group (ASX: AU1) was in the crosshairs of Magnolia Capital yesterday after it called in administrators BDO over a debt repayment issue, but the fast-growing real estate company has disputed the claims in a letter to staff.
While The Agency has declined to release a public statement on the matter, yesterday its staff were reassured the voluntary administrators were not appointed to any operating subsidiaries, meaning the day-to-day operations of the business, their roles and clients were "not affected in any way".
The company told staff it was well financed with $27 million worth of cash and other assets along with a positive cash flow, and December quarter results to be released soon following an "outstanding" three months to 30 September.
This compares to the $379,000 The Agency claimed Magnolia - associated with AU1 shareholder and former director Mitchell Atkins - was seeking to be paid, although it "does does not believe the fee is payable and intends to defend any action in regard to the purported outstanding fee".
"The company has, and will continue, to pursue all legal grounds available to it in relation to the actions of Mitchell Atkins and Magnolia," The Agency told staff.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support