Netflix and Paramount are fighting over Warner Bros. Discovery. Here’s the regulatory outlook Courthouse News
Warner Bros CEO David Zaslav on Paramount offering ‘Big’ payout if company accepts merger at lower value: ‘It would be inappropriate to discuss…’ The Times of India
“Larry Didn’t Show Up, and David Got Ahead of His Skis” Puck
Netflix Just Bought Warner Bros. And HBO: Here’s Why It Matters bgr.com
Trump World is picking sides in the battle for Warner Bros. livemint.com
A few months ago, Ontario reporter Fatima Syed mentioned she’d been looking into “kind of complicated agreements” that the vast majority of municipalities in the province have signed with Enbridge Gas.
These contracts are technical, sure, but they’re also important: they allow the natural gas company to access public land to install pipelines, free of charge.
It’s not like that everywhere. Many Canadian provinces, including British Columbia and Alberta, permit municipalities to levy fees for this access, which can bring in tens of millions in annual revenue.
Ontario still has a law that prohibits this — it considers providing natural gas to heat homes a “public good.” But as home heating options expand and the world moves away from fossil fuels, at least two municipalities in the province are pushing back.
Fatima has been investigating energy issues in Ontario since 2019: cultivating sources, filing freedom of information requests and poring over opaque technical agreements.
Her persistence earned her this week’s scoop: the Waterloo Regional Municipality, which includes the cities of Waterloo, Kitchener and Cambridge, recently declined to renew its agreement with Enbridge, which would have locked in 20 more years of free access for gas pipelines.
A new survey reveals nearly one-third of renters are giving up over half their income to their landlord, despite rental prices across the country declining for a 14th straight month.
According to the Winter 2025 Renter Feedback Survey from Rentals.ca, over 62 per cent of renters spend 30 per cent of their income on rent, while a third report spending over half their income on rent, and 12 per cent spend 70 per cent of their income on rent.
For those aged between 25 and 34, 43 per cent report spending over half of their income on rent, while 37 per cent of renters aged 35 to 54 report about the same.
Rentals.ca spokesperson Giacomo Ladas tells 660 NewsRadio that, according to responses from 503 renters across Canada, 70 per cent of renters budget under $2,000 a month for a new apartment, but old sayings around how much to spend on rent appear not to apply anymore.
“Typically, we would see that 30 per cent was kind of that go-to number of ‘Hey, if you want to have any type of housing, try to spend around 30 per cent of your income towards rent,’ but that’s really not the case at all,” he said.
The perspective of renters across the country was also included in the survey.
Around 63 per cent of renters say rent prices have increased since the summer, and 69 per cent of respondents are most concerned about high rent prices in their online search, compared to concerns about supply, listing quality, or scams.
Ladas says while there has been an influx in rental scams, which typically target a “desperate consumer base,” the perspective of renters reveals the reality of the market.
“I do think when people are saying that 69 per cent are seeing that rental prices are the biggest challenge they face, I think that’s quite interesting when you factor that rental prices have been going down, because it shows how inflated they really are,” he said.
Statistics Canada says the annual inflation rate was 2.2 per cent in November.
Meanwhile, according to the latest monthly report from Rentals.ca and Urbanation, asking rents in Canada dropped to 3.1 per cent in November from the previous year to an average of $2,074 — the 14th straight month of annual declines.
B.C., Alberta, and Ontario had the largest rental declines, the average dropping to $2,392, $1,775, and $2,296, respectively.
Average asking rents were also down 1.5 per cent month-over-month, the largest such drop of 2025, with rents now at the lowest level since June 2023. However, average asking rents are still 3.4 per cent higher than three years ago.
Wall Street (Friday): S&P500 +0.9%, Dow +0.6%, Nasdaq +1.3%
Europe (Friday): Dax +0.4%, FTSE +0.5%, Eurostoxx +0.4%
Spot gold (Friday): +0.1% to $US4,338/ounce
Brent crude (Friday): +1.1% to $US 60.47/barrel
Iron ore (Friday): -0.4% to $US104.0/tonne
Bitcoin: +0.3% at $US88,431
Prices current at around 7:10am AEDT
Wall Street bounces on AI rally, ASX set to rise
We may not have officially entered the so-called “Santa Rally” zone, but Wall Street enjoyed some festive cheer ahead of the shortened trading week.
All the key US indices rose led in particular by the tech sector.
The S&P 500 gained 0.9%, the Dow 0.4% and the Nasdaq 1.3%.
The optimistic sentiment was widespread.
The pan-Europe Eurostoxx 600 gained 0.4%, while the global MSCI benchmark rose 0.7% across the day.
For Europe, it marked a record close. Once again, aerospace and defence stocks were in the hottest demand.
The performance of Micron Technology in the US, which jumped 7% thanks to a broker upgrade, buoyed the somewhat wobbly AI cohort.
Nvidia picked up almost 4% and Oracle rose 6.4% after signing a binding agreement with Byte Dance, the Chinese owner of Tik Tok, to run the US operations of the social media platform.
“The return to a more optimistic tone around the AI trade is certainly helping a number of things across the board,” Rosenblatt Securities trader Michael James told Reuters.
“It was certainly helping the Nasdaq in a meaningful way yesterday and again today,” he said.
“We’re not out of the woods, but it certainly feels a lot better today than it did most of the course of the last week.”
The US dollar index rose marginally, although the Australian dollar largely held its ground.
On commodity markets, the global oil benchmark, Brent Crude rose 1.1% to $US60.47/barrel on the prospect of supply disruptions from a U.S. blockade of Venezuelan tankers.
Spot gold edged higher and silver rose 2.8% to yet another record high, hitting $US67.22/ounce
Good morning
Good morning, and welcome to another day on the ABC markets and finance blog.
Stephen Letts from ABC business team limbering up for a blow-by-blow coverage of the day’s events, where every post is hopefully a winner, but none should be construed as financial advice.
In short, it looks like the local market will start the shortened trading week on a positive note.
Futures trading is pointing to the ASX gaining around 0.5% on opening, clawing back some of the 0.9% it shed last week.
As always, the game’s afoot, so let’s get blogging.
Australian childcare company Embark Education has launched a bid for rival early childcare company Mayfield Education, alarming experts who say for-profit providers that fail to meet baseline safety standards are being allowed to expand without oversight.
Embark is planning to more than double in size after announcing an off-market takeover bid for Mayfield Education last month.
If successful, Embark — which operates under brands including Appleberries, Brighthouse, Cubby Care and Roseberry — would grow the number of centres under its control from 39 to 84.
However, industry experts say the company is in no position to expand while its existing services fail to meet national quality standards.
Data from childcare authority ACECQA shows 26 per cent of Embark’s long-day care centres failed national quality standards — almost three times the for-profit industry average of 9 per cent.
“I think it’s extremely concerning that a company with such a bad record … is planning to expand dramatically,” Andrew Scott, an emeritus professor at Deakin University, said.
He said he was concerned Embark was able to act despite a wave of tighter childcare regulations introduced in July following scandals involving other childcare providers.
Mr Scott said the scandals gave rise to concerns about “companies pursuing profit ruthlessly from taxpayer subsidies at the expense of care and safety for Australian children”.
Takeover bid flagged in October
Embark, formerly known as Evolve Early Learning, made its takeover intentions clear in October when it purchased nearly 20 per cent of Mayfield’s shares.
Former Genius Childcare boss Darren Misquitta has pleaded guilty after receiving money obtained through forgery. (LinkedIn)
Stock market filings indicate the shares were bought from Darren Misquitta, the head of embattled childcare empire Genius Education.
Embark is offering 50c per share to Mayfield shareholders, who have been advised by Mayfield to take no action over the proposal yet.
A booklet detailing the offer is due to be sent to shareholders in January.
Embark has been approached for comment.
Mayfield is flailing in part because of its dealings with Mr Misquitta, who in August pleaded guilty to receiving $120,000 in suspected proceeds of crime from a business associate not associated with the childcare industry.
Steps Early Learning was poised to take over at least six Genius centres in May, but that deal appears to have fallen through.
Steps had applied for provider approval to run childcare centres as long ago as May, but still had not received it as of November 2025.
Steps did not respond to the ABC’s questions.
Experts warn against ‘complex financial web’
The Productivity Commission is calling for a national Early Childhood Education and Care Commission to provide oversight of for-profit providers following concerns about the risk of putting profit over child safety.
The New South Wales government recently ordered another childcare giant, Affinity, to stop acquiring more centres after services it runs were at the centre of safety breaches and an abuse scandal at the hands of accused educator, Joshua Brown.
But with only two of its present 39 services located in NSW, Embark is unlikely to fall under the same oversight.
Professor Scott said there “absolutely should be” closer oversight of deals like Embark’s Mayfair takeover by childcare regulators.
“There are too many gaps in these new regulations, including between state and federal responsibilities,”
he said.
“And in those gaps, this company is planning to weave yet another complex financial web to make profits.”
He said it was generally accepted there was a place for for-profit centres in the childcare system.
But he added that there was too much “excessive profiteering” and the federal minister responsible for the sector, Jason Clare, should use his powers to rebalance the system towards not-for-profits.
Jason Clare previously flagged a national register for childcare workers was needed. (ABC News: Adam Kennedy)
“What’s happened is that it has become an industrial-scale exercise in sweeping up taxpayer subsidies to make money, and care and education of children isn’t part of these companies’ agendas,” he said.
One of Embark’s New South Wales centres, Carlton House Childcare Centre and Preschool in Dubbo, came under scrutiny from the NSW regulator in 2024, according to documents released through a NSW parliamentary order.
In one incident detailed in the documents on July 16, an educator was allegedly found lying on a mat with an infant, with a child’s blanket completely covering her head.
The next day, an educator and a child were allegedly observed in a yelling match, with the child claiming the educator had “grabbed [them] on the shoulder and threw [them] on the log”.
Embark was issued a warning letter to comply with the national law.
The scheme will also include infrastructure for a further 300 future charge points across West Berkshire to ensure the network can grow as demand increases in public car parks and on-street locations.
Installations are expected to begin in 2026 and the council said locations would be confirmed once feasibility studies were completed.
Stuart Gourley, the authority’s executive member for environment and highways, called the project “a major step forward in delivering our climate and transport strategy”.
He said: “By expanding public EV infrastructure, we’re enabling more residents to support our net-zero goals by choosing sustainable travel and future proofing the district as demand grows.”
Connected Kerb chief executive Chris Pateman-Jones said the partnership was “all about giving every resident the confidence to go electric”.
The 20-year contract includes a revenue-share model, capped tariffs to keep charging affordable and “strong service level agreements to ensure performance and reliability”.
At the end of the contract, all infrastructure will transfer to the council for long-term public benefit.
Spending tens of thousands of dollars annually on staff Christmas hampers and cash bonuses is something regional Victorian employer, Paul Butko, is only happy to splurge on.
It is a tradition the Wodonga family owned company, JC Butko Engineering, which has about 150 employees, has kept alive since 1976.
“We have got a great team and your business is only as good as your employees,” Mr Butko said.
“We are probably a medium-sized company, but we treat all of our employees like family and we feel it’s the right thing to do at Christmas and Easter [that] everyone gets a share in the success of the business.
“It is a significant cost, but our employees are definitely worth it.”
A row of Christmas hampers at Paul Butko’s company. (Supplied: Paul Butko)
Less festive bonus season forecast
Christmas bonuses are not legislated in Australia and are given at the employer’s discretion, and experts warn, with tough economic conditions lingering, many employees yearning for a holiday bonus may be disappointed.
“Bonuses have always been tied to business performance and the reality is that many employers have been navigating tighter margins, higher operating costs and ongoing economic uncertainty,” Victorian Chamber of Commerce and Industry chief executive Sally Curtain said.
“While some organisations may not be in a position to offer the same level of bonuses as in previous years, we know that many businesses are still working hard to recognise and retain their staff in ways that are sustainable.
“As conditions improve, we expect to see more businesses re-evaluating their incentive structures, but right now the priority is keeping businesses strong and people employed.”
Businesses and shoppers face uncertain economic times. (ABC News: Danielle Bonica)
Australia’s unique Christmas bonus
Australia’s strong wages and some unique benefits, like annual leave loading, mean the cash Christmas bonus has not always played a strong role in the country’s workplaces, according to the University of Melbourne’s Professor of Human Resource Management, Peter Gahan.
Annual leave loading is not a universal benefit but is included in many awards, and began in the late 1960s to 1970s, primarily in manufacturing, when many workers were dependent on regular overtime but lost this pay perk during periods of leave.
Annual leave loading was used primarily in the manufacturing industry. (Supplied: Kimberly Clark)
Professor Gahan said the cash Christmas bonus was more typical in North America and some parts of Europe, while the separate Christmas bonus for salaried employees is a more recent development in Australia.
“Traditionally, what we have had is a Christmas bonus in the form of that annual leave loading,” Professor Gahan said.
“Probably in more professional areas, we have seen Christmas bonuses come into play as a fixed amount that might be received for people who are salaried and perhaps not covered by awards.”
Some employers give festive gifts instead of cash bonuses. (ABC Wimmera: Andrew Kelso)
He warned bonuses were a double-edged sword for companies.
“The effect of having it tends to become an expectation and then if it’s removed because of conditions in the economy generally as a discretionary element, people will feel that a lot more strongly and suppose will feel less well disposed towards their employer, and feel like there’s some breach of their psychological contract of employment,” he said.
But for those who do receive a bonus at Christmas, Professor Gahan said morale also climbs, at least temporarily.
“In the US, literally the law is silent around many of these entitlements, so it becomes really at the largesse of the employer, so people perhaps feel more positively disposed to their employer because it’s seen as a gift from their employer when it does happen rather than something that’s required by law,” he said.
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
Over the past few months, Zak Khire had been budgeting extra time to reach the Sadaqa Food Bank — and even more to get home.
“It’s not like five, 10 minutes. It’s almost half an hour — more than a half-an-hour walk,” he said.
Sadaqa — which is only open on weekends — had been without bus service for eight months, after OC Transpo cut route 189’s Saturday and Sunday runs back in April.
For people like Khire, who relies on transit, it was less than ideal.
But that changed on Sunday. After months of complaints from clients, and advocacy from both Sadaqa and Knoxdale-Merivale Coun. Sean Devine, route 189’s weekend service was restored, reconnecting the Colonnade Road food bank to public transit for the first time since the spring.
“I’m really appreciative of the fact that we [can] take the bus now,” said Khire. “It saves me a headache.”
Sadaqa Food Bank manager Salim Jam says the loss of service only added to his clients’ hardships, many of whom already struggle with food insecurity, mobility challenges or limited income.
“It is very important for them to at least have this peace of mind that they are not going to sleep hungry,” he said.
Some people simply couldn’t make the trip at all, Jam said. They began asking for their food to be delivered, he said, a service the food bank didn’t have the capacity to provide.
Salim Jam says the end of the bus route’s weekend service was causing hardships for clients of the emergency food bank, one of five in Ottawa and the only one to offer halal options. (Cameron Mahler/CBC)
Only halal emergency food bank
Sadaqa is one of Ottawa’s five emergency food banks and the only one that provides halal food. It serves people from anywhere in the city when other food cupboards are closed, but it’s only open on Saturdays and Sundays — the same days the bus route had been cut.
Devine said that mismatched schedule made the situation urgent.
His office began working with the food bank and OC Transpo earlier this summer, after learning that clients were facing long walks or booking expensive taxi rides just to access free food.
Devine said the decision to restore the route “is not about the number of riders, but about the experience of the people who have lost that bus.”
OC Transpo ultimately agreed, restoring weekend service on Sunday.
“Their challenges are already tough enough and this is going to make their lives a little bit easier,” said Devine.
Jam says the return of a warm bus ride, especially heading into winter, makes a real difference for families trying to put food on the table.
“This is really something wonderful for them. They feel less worried about the food at least, and that’s what we’re here for,” said Jam.
Khire agrees.
“There’s a lot of people who come to this location,” he said, adding that now, “it’s going to be easy for them.”
BOISE, Idaho, 22 December 2025 – Clearwater Analytics (NYSE: CWAN) (“CWAN” or the “Company”), announced that it has entered into a definitive agreement to be acquired in a transaction valued at approximately $8.4 billion by a Permira and Warburg Pincus-led Investor Group (the “Investor Group”), with participation from Temasek. The Investor Group has key support from Francisco Partners.
After a thorough process including engaging with certain strategics and financial sponsors, the Special Committee of the CWAN Board of Directors, composed entirely of independent and disinterested directors, upon the advice of its independent outside legal counsel and financial advisor, unanimously recommended this transaction. The CWAN Board of Directors subsequently approved this transaction.
Under the terms of the agreement, CWAN stockholders will receive $24.55 per share in cash upon completion of the proposed transaction. The per share purchase price represents a premium of approximately 47 percent over CWAN’s undisturbed share price as of November 10, 2025, the last trading day prior to media reports regarding a potential transaction.
“This deal represents a great outcome for Clearwater Analytics and our stockholders,” said Sandeep Sahai, CEO, CWAN. “It also positions us well for our next chapter of growth. Operating as a private company will empower us to invest boldly as we integrate the platforms to deliver a next-generation front-to-back solution that natively addresses alternative assets, provides industry leading risk analytics, and delivers on agentic solutions powered by our unique and proprietary database. This will allow us to continue delighting our clients across global markets. We are thrilled to have the support of Permira and Warburg Pincus.”
“Both firms understand our business and the technology industry and have proven track records fostering growth for some of the largest and fastest-growing technology businesses globally. We look forward to building on our momentum and delivering advanced solutions for our clients and partners in the years ahead. I want to thank the Special Committee for the rigorous process and diligence with which they secured this outcome for our stockholders,” added Sahai.
“Clearwater Analytics continues to set the standard for excellence in the industry, and we are excited to invest behind the vision of creating an open, modular, front-to-back platform for institutional investment management,” said Alex Stratoudakis, Managing Director, Warburg Pincus. “We’re excited to leverage our deep financial technology expertise and partner with Permira and the CWAN team to drive the next wave of innovation and growth for the Company,” added Angel Pu Shum, Principal, Warburg Pincus.
“Clearwater Analytics built a single instance, multi-tenant platform for investment accounting in an industry that was and continues to be dominated by legacy solutions. We are excited about the vision for the platform and will continue to invest in building a true front-to-back solution by integrating the industry-leading solutions from Enfusion and Beacon. The next cycle will be shaped by AI and data, and we believe the business is positioned to continue to lead through this shift,” said Andrew Young, Partner at Permira. “We are very excited to back Sandeep and his team on their AI journey and in delivering a seamlessly integrated platform,” added Alberto Riva, Managing Director at Permira.
“The quality of Clearwater Analytics’ business and strength of its team are evident in the company’s growing leadership as it serves expanding segments of institutional investors across the US and Europe and, increasingly, delivers front-to-back solutions to these customers. We look forward to partnering with Warburg and Permira to drive the Company’s next phase of growth,” said Ashley Evans, Partner at Francisco Partners.
CWAN will continue to operate as usual during the pendency of the transaction, with the same commitment to clients, employees, and partners.
Certain Terms, Approvals and Timing
Following the recommendation of a Special Committee, the CWAN Board of Directors approved the merger agreement. The acquisition is subject to approval by CWAN’s stockholders (including a majority of votes cast by disinterested stockholders) and is expected to close in the first half of 2026, subject to customary closing conditions, including receipt of regulatory approvals.
Upon completion of the transaction, CWAN’s common stock will no longer be publicly listed on the New York Stock Exchange, and CWAN will become a privately held company.
The merger agreement provides for a “go-shop” period ending on January 23, 2026, during which CWAN, at the direction of the Special Committee and with the assistance of its advisors, will be permitted to actively solicit and evaluate alternative acquisition proposals, with a potential 10-day extension for certain parties that submit acquisition proposals during the initial go-shop period. There can be no assurance that this process will result in a superior proposal, and CWAN does not intend to disclose developments with respect to the go-shop process unless and until it determines that such disclosure is appropriate or otherwise required. CWAN will have the right to terminate the Merger Agreement to enter into a superior proposal, subject to the terms and conditions of the Merger Agreement.
The foregoing description of the merger agreement and the transactions contemplated thereby is subject to, and is qualified in its entirety by reference to, the full terms of the merger agreement, for which CWAN will file a Form 8-K with the Securities and Exchange Commission.
Advisors
PJT Partners is serving as the exclusive financial advisor, and Cravath, Swaine & Moore LLP is serving as legal counsel, to the Special Committee of the CWAN Board of Directors. J.P. Morgan is serving as the exclusive financial advisor, and Kirkland & Ellis LLP is serving as legal counsel, to CWAN. Goldman Sachs & Co. LLC is acting as financial advisor to the Investor Group. Private Credit at Goldman Sachs Alternatives provided 100% committed debt financing to the Investor Group. Latham and Watkins LLP is serving as M&A counsel to the Investor Group. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as finance counsel to the Investor Group.
A former AFL star has been able to wipe millions of dollars in company debt and reopen the collapsed business a few hundred metres down the road, despite owing $4.5 million to staff, suppliers and the tax office.
Chris Knights, a former Adelaide and Richmond footballer, is the chief executive of marketing agency Zib Digital, which engaged in a process known as ‘legal phoenixing’, which allows a company to wind up and start again.
Mr Knights told staff in May he was closing the company’s doors, leaving about a third of its workforce without a job or their owed entitlements.
A former employee said staff were given a day’s notice that “we were surplus … and the business was put into administration”.
Four days later, Zib Digital registered a new ABN without the insolvent entity’s debts. It has reopened in an office close to its original inner Melbourne headquarters.
“Change is as good as a holiday and the new facility’s going to be built for purpose,” Mr Knights said during a company-wide meeting in May that was shared with the ABC.
The new company has opened a new office with the same signage, one street over. (ABC News: Billy Draper)
Zib’s actions are within the law but have raised questions about what some in the industry call “legal phoenix” legislation, which allows restructured insolvent companies to rise again with the same assets — but without the debts of the previous entity, and usually with fewer staff.
Scott Cowen, the assistant national secretary of the Australian Services Union, called the practice “legal trickery”.
“Once a worker finishes their job for the day, they expect to be paid,” he said
“We really need to look at reforming the laws in this area, because workers are definitely at the bottom of the pile when it comes to priority creditors in these situations.
“They’re really left powerless in terms of what they can do and in terms of what legal rights they have.“
Millions wiped
Mr Knights, lauded in an AFL article after the collapse of the company, has remained at the helm of the new entity, which owes more than $4.5 million.
“Don’t be afraid to make mistakes, that is where growth and wisdom come from,” he told the AFL this year.
Former AFL player Chris Knights is CEO of Zib Digital. (AAP: Ben Macmahon)
According to the administrators’ report, the insolvent business has debts to staff, suppliers and the Australian Taxation Office (ATO).
Of that, $3.8 million is owed to subsidiaries and external suppliers, while staff are owed almost $450,000 in entitlements, and the ATO is owed almost $350,000.
Unpaid entitlements continue to plague Australian workers. This month, the ATO said $1.1 billion in unpaid super had been returned to nearly a million individuals’ super funds in 2024-25, with $200 million raised by the ATO in penalties.
Former employees who agreed to speak to the ABC anonymously said Zib told them to apply for the Fair Entitlements Guarantee (FEG), meaning taxpayer dollars would fund financial assistance as part of a safety net when companies go under.
“It was very much like, ‘How is this even possible?’ when … about three weeks before this happened we were meant to be going to the Philippines to celebrate how wonderful our year was,” a former staff member said.
In a statement to the ABC, Mr Knights said: “We’ve been navigating an extremely challenging economic period.
“Our industry, in particular, has experienced a sharp decline in advertising spending since the end of COVID, which has forced many major media and digital organisations to make difficult redundancies.
“No-one ever wants to let people go but, unfortunately, market conditions made it unavoidable.
“Throughout the process, we appointed an external administrator and followed their guidance and all required procedures diligently and correctly.”
Same name, same logo, new ABN
A staff member who was not made redundant said that, when the business went insolvent, he was given 24 hours to sign a contract with a new company, Zib Holdings.
In an email seen by the ABC, his manager confirms “the only thing that changes is the name of your employer”.
The former employee says he was given 24 hours to sign a contract with a new company, Zib Holdings. (ABC News: Billy Draper)
“Same name, same logo, same communications [and] emails — nothing changed,” the employee, who is no longer with the company, told ABC News.
“The communications were not to let clients know — business as usual. There was no difference to the previous business and the current business.“
According to the Australian Securities and Investments Commission (ASIC), Zib Digital’s ABN closed on May 19 and entered into administration. On May 23, a new ABN was registered under Zib Holdings.
It was not until the former staff member spoke to the administrator that he realised he had not been paid superannuation since March, something not covered by the FEG scheme.
“It’s really hard to now believe people on face value, given that we were told that we were excellent and everything was going great and the business is very profitable, to find out almost within a couple of days that the messaging had changed and this had happened,” the ex-employee said.
During a company-wide meeting after the business entered voluntary administration, Mr Knights referred to the insolvency as a “restructure” that had been planned for some time.
During the same meeting, one of Zib’s executives told staff the way to remove “frustrations” within the business was to “create a slightly leaner business, keep the right people in the right seats and ensure that people are being listened to”.
“There’s no impact on the client, so finance stays the same because we always bill the client from Zib Production,” the executive said.
About a month after the business entered voluntary administration, the new company opened an office a street away from the old business, with the same signage.
“The interesting thing for me about the whole thing is that this seems like it’s maybe a loophole that you can get away with if nobody talks about it,” a former employee said.
“Basically a business can just hand their debts over to the federal government and have them pick up the bill.“
‘Legal phoenixing’ used to wipe slate clean
The practice of phoenixing — where directors of a company deliberately shut the business to avoid debts, by transferring assets to a new company without paying true or market value — is illegal.
Corporate regulator ASIC has described illegal phoenixing as giving companies “an unfair advantage” because they have less debt and lower operating costs than other businesses.
However, there are lawful processes that can be used to wind up businesses and wipe debts, for example, a small business restructure. In Zib’s case, it used the insolvency process and then sold the assets to a new company for market value.
Zib’s administrator Adrian Hunter said the insolvency process was about making the most of a failed company’s assets and distributing money to creditors via a structured framework.
He said it allowed companies to essentially “start again”.
“[It’s known as] a ‘legal phoenix’, which is the lawful restructuring of an entity where the assets of the old insolvent company are sold at true market value to another entity, which is often a related party,” Mr Hunter, a partner at RSM Australia, said.
He argued it was a better outcome than if a company were to close down altogether.
“The value achieved for the sale of these distressed assets exceeds what would be realised in a forced sale liquidation scenario and generates a greater return for the insolvent company’s creditors,” he said.
But Mr Cowen from the ASU was critical of this kind of company restructuring and said it should not be used by companies as a way of getting out of paying their workers what they are owed.
“If we have a situation where a company can wind up one day, wipe its debts, have the taxpayer foot the bill for some of their employee entitlements, and open up … under a different legal name, you really need to question whether the law is fit for purpose.”
Scott Cowen says workers expect to be paid for the jobs they do. (ABC News: Patrick Stone)
Mr Cowen said the union had seen this practice across a number of industries and it was unfair on the workers, but also taxpayers, who ended up covering the salaries of unpaid workers once they went to to FEG.
“Sometimes [workers] see a notice posted on the office door, they can’t come into work because the company’s closed up, only to open up again in a few days time under a different legal trading name.”
In a statement to the ABC, a spokesperson for the ATO said it could not comment on individual cases, but “if a company is wound up in insolvency, the ATO will pursue recovery of outstanding debts owing to it through the liquidation process”.
“If there are insufficient funds after paying the liquidator’s or trustee in bankruptcy’s costs and priority creditors, the debt owing to the ATO is generally written off as irrecoverable at law.”
Sponsored staff lose thousands
Many of those made redundant from Zib could apply to the FEG scheme, but some were not entitled to.
Renee was sponsored by the company to work in Australia and said she was owed almost $20,000 in entitlements.
The Dutch woman, who asked that ABC News use only her first name, worries she will never see the money because the FEG scheme does not cover employees on sponsorship visas.
Renee said she had been encouraged to engage a lawyer, but would instead return to the Netherlands in January, a decision greatly influenced by her experience at Zib.
“Businesses can have financial hardship, that’s inevitable. But there is a huge difference in handling this with a human approach,”
she said.
Other staff said the impact of Zib’s manoeuvring affected them greatly.
“I think it’s the way that it’s been done, where it’s, ‘We don’t have any money’, but yet they’ve moved down the road,” one said.
“They’re telling clients nothing’s changed, everything’s still status quo.
“And yet there’s all of us who are left with nothing.”
Some staff have received their FEG entitlements, but say thousands of dollars were missing because there is a maximum weekly wage cap of $2,793 applied to all FEG payouts (meaning if you make more than that in a week, you miss out).
“It’s been really tough and I think the financial side of it is probably less so than the mental side of it. I was pretty broken,” another former employee said.
“I think if you’re going to make somebody redundant, you need to do it in the right way, which is provide them a runway to at least find another opportunity.
“I think it’s a really inhumane way of going about it.“
