The credit managers at some of the country's biggest distributors must have been picking up the phone to their insurance companies after Queensland reseller Priority One was placed into liquidation.
The IT solutions and consulting services firms appointed BRI Ferrier as liquidator in November after operating for more than a decade. Its vendors included Dell, VMware and most recently Amazon Web Services.
According to the liquidators report, creditors have claims of $549,446 against Priority One.
BRI Ferrier's Amit Kumar told CRN that Priority One's directors put the company into liquidation.
The minutes from the creditors' meeting on 29 November suggests that Priority One had been trying to source external investors and had gone as far as preparing shareholder agreements when the investors backed out.
This led to the company being placed into liquidation.
Creditors at the meeting including disties Distribution Central, Express Data and Westcon, along with MoneyTech Finance and The Department of Communities, Child Safety and Disability Services.
They were told the Commonwealth Bank has a charge over the assets and undertakings of the business. "As such, all realised assets would be utilised to pay the employee entitlements and CBA debt," according to the minutes.
The largest creditor was Distribution Central. Executive chairman Scott Frew told CRN: "We insure our debts so we are covered, therefore, the insurance cost is more the cost of doing business. My broader view is more and more [resellers] will hit the wall if they don't evolve in to service providers of some description. "
Distribution Central said it is still owed more than $196,000 from an invoice worth $311,578. Express Data faces a $64,000 haircut and Westcon is exposed to the tune of $57,000.
Meanwhile, the Department of Communities, Child Safety and Disability Services said it is owed almost $64,000.
Neither managing director Marc Jolly nor chairman Steve Rudlin responded to CRN's requests for comment.
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