Staff laid off from failed buy now, pay later (BNPL) lender Laybuy are at risk of not getting paid the money they are owed, or holiday pay, despite being preferential creditors.
This is due to the way employees were classified in the group of companies that comprised the Laybuy concern, a source who spoke to interest.co.nz on condition of anonymity said.
Furthermore, it appears Laybuy was unable to pay the Southern Cross health insurance premiums for staff in April, two months before the company was wound up. This led to some staff who had availed themselves of care under the employment benefit being billed later on by Southern Cross in arrears, the source said.
This amounts to "a double whammy" for some staff who are struggling with meeting rent and mortgage payments, after being let go following Laybuy going under.
A spokesperson for Deloitte said the receivers for Laybuy, David Webb and Rob Campbell, are aware of the issues. The receivers are currently working through the issues with Laybuy employees, the spokesperson said.
Laybuy founder Gary Rohloff would not be drawn on whether staff could end up unpaid, or the issue of Southern Cross health insurance premiums going unpaid.
"The affairs of Laybuy are now in the hands of the receiver and I am providing any support they (the receivers) request from me," Rohloff told interest.co.nz.
Following a failed attempt to sell Laybuy earlier this year, understood to be to online Swedish finance company Klarna, the New Zealand BNPL lender went into receivership on June 17.
Laybuy Group Holdings Ltd, Laybuy Holdings Ltd and Laybuy Australia are in receivership, with the latter entity's liquidation being managed by receivers at Deloitte Australia. Laybuy Group's UK businesses and other entities are not in receivership however.
Rohloff said in June that he was "absolutely heartbroken" by Laybuy going into receivership, and that he would do everything he can to support the BNPL lender's team as the company is being liquidated. Laybuy had around 70 employees when it failed, but it is not clear which unit of the group of companies had contracted them.
As of June, Laybuy counted over 10,500 merchants and around half a million users. The BNPL lender, set up in 2017 by Rohloff, had a $30 million Kiwibank loan facility that matured in June, and $38.1 million from Britain's Partners for Growth (Pfg). How much of this will be repaid remains to be seen.
The first official report from the receivers on Laybuy is expected to be released mid-August, the Deloitte spokesperson said.
Update Laybuy's UK business is under administration, run by business consultants FTI. Around 484,000 UK customers are affected.
3 Comments
"Rohloff said in June that he was "absolutely heartbroken" by Laybuy going into receivership, and that he would do everything he can to support the BNPL lender's team as the company is being liquidated."
Except reach into his own pocket.
Also, isn't it illegal to operate a going concern that is insolvent? Why do we so rarely hear about directors being charged ala Mainzeal?
The Rohloff's will have earned a lifetime worth of bad karma from this mess. They cashed out for hundreds of millions, stayed on the payroll to run the company into the ground, all the while maintaining an unrealistic forward outlook and spending most of their time travelling the world in luxury. Sickening.
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