No room for TLC in reseller's family feud

The $100 valuation

In March of this year, Alan Chapman had TLC IT Group, TLC IT Managed Services, TLC IP Networks and TLC Data Security valued by Whelan & Cook. The valuation - which took into account the company's assets and debts as at 31 October 2009 - was dated March 18, 2010.

An extract from the document stated: "We note that this valuation is contrary to paragraph 12.3 of the shareholders agreement dated 21 April 2006, which requires the valuation to be prepared on a going concern basis."

Boyle claimed the notification of the evaluation "was done in contrary to the shareholders agreements".

"It wasn't even done correctly, and all the companies were all listed as non-viable with ongoing concerns," he said.

But Alan Chapman said the valuation was an "independent agreement, valued on the books".

He said  the books were "carrying a lot of debt" because the company was "carrying a lot of investment at the time".

"We [had just] spent hundreds and thousands of dollars on software," said Alan Chapman.

Alan Chapman also claimed that the company's financial position had deteriorated from mid-2009.

"We had a lot of companies go bust on us and take us for a lot of money," he said. "We had five go so that was very unpleasant. We had our finances stop with the bank, a lot of companies did.

"I was not at all in the slightest bit surprised with the valuation," he said.

He said revenue at TLC Data Security revenue has disappeared since July, but declined to elaborate.

ASIC documents seen by CRN revealed that TLC Data Security is currently in the process of winding up. On March 25, 2010, distributor Avnet Pacific filed a NSW Supreme Court order over debts owed by TLC Data Security.

The fallout

Alan Chapman said his brother and Craig Boyle "left at the absolute worst time they could have left".

"The company is valued at the time they left", said Jan Chapman. "They owned 20 percent of the business each, so that's why they get $20 each.

But Jan Chapman disputed the assessment.

"By the end of October 2009, we had more of recurring revenue from clients," he said.

Craig Boyle said that TLC IT Managed Services was in the BRW Fast 100 list, and IP Networks was a "complete viable concern."

Jan Chapman also questioned why the company was valued as of October, 2009, as it did not represent the value of the business on the day the shares were sold.

Alan Chapman said he was disappointed at how far the relationship between he and his business partners had deteriorated. 

"Jan's my brother, he's got a big chip on his shoulder against me," he said. "It really is a family feud going on here."