Failed Aussie e-commerce firm owes $32m to US investor

Failed e-commerce software provider IP3 Systems owes nearly $35 million to creditors in the US and Australia.

A report from the first creditors meeting shows that the secured creditor, USA Health Investors, is owed $32 million, much of it overdue interest – IP3's debt to the investor was $14 million in 2012.

USA Health Investors had been "financially supporting" Melbourne-based IP3 Systems for an undisclosed period of time; when the investor decided it could not continue to support IP3, the company was placed into voluntary administration.

David Vasudevan and Gess Rambaldi of Pitcher Partners were appointed on 23 March.

Vasudevan told CRN that there had been some expressions of interest from buyers, but any details are confidential.

At the creditors meeting, Vasudevan had advised that IP3 Systems was likely to go into liquidation because USA Health indicated it was not prepared to propose a Deed of Company Arrangement.

In the 2015 financial year, IP3 Systems did not generate any revenue and had incurred software development costs, according to the report to creditors.

The other major creditor is former CEO Ahmed Youssef, who is owed $900,000.

Youssef told CRN: "As a concerned shareholder, I believe we (company shareholders) are all hopeful for a resolution to this situation, which would protect and cater for the interests of all shareholders."

IP3 Systems was founded in 1999 and its alliance partners included IBM, HP, Microsoft and Unisys.

The company has two products, Electron and Ether. Electron is a direct sales software for application in procurement, sales, logistics and supply chain management. Ether is a product directory that can be integrated with Electron.

The e-commerce software vendor offered product training, implementation services and customer and partner support, including a partner program.