Tech contractors still owed money after the $100m collapse of Plutus Payroll are worried they could be left penniless after corporate undertaker Deloitte revealed it wants $3 million in fees.
And the the bill for work winding up the sham company could go even higher.
Plutus Payroll offered a no-fee Payroll service that attracted thousands of IT workers, but collapsed after an Australian Federal Police and Australian Taxation Office investigation found the company was not paying all of the PAYG tax owed on behalf of its clients.
The two agencies have alleged that the company’s officers instead siphoned off much of the money.
Plutus collapsed in mid-2017, leaving thousands of its clients without several weeks pay and superannuation payments.
The AFP has since recovered significant funds and the courts have ordered a wind-up of Plutus and related companies, with Deloitte scoring the job of performing the company autopsy and handing out what little money is left.
Plutus carved out a niche in the tech contracting space where recruiters supplied contract labour to business and government. Former tech contractor clients are now considered creditors of the Plutus companies.
Deloitte wrote to those creditors early this week, sending a 56-page document that sets out the work it has done to date, future activities it expects to conduct and seeking exactly $3 million for its services.
iTnews has sighted the document and can report that just under $1 million of that sum is for future work; the firm believes it may be able to wrap things up for a mere $2.5 million.
But even that lesser sum exceeds Deloitte’s initial estimate of its fees on the job, which started at $1.5 million – $2 million.
The firm also says the case has proven more complex than it first believed, to the extent that forensic accountants are required.
Plutus has also produced more claims from creditors than expected, and verifying some claims has proven difficult.
The document also warns that Deloitte cannot predict future costs due to the matter’s complexity.
In a closed social media group for former Plutus clients, creditors have pounced on the $3m figure and the very high hourly rates mentioned in the Deloitte document.
Some members voiced concerns that the scale of fees will erode their eventual payments. Others say they’re yet to even hear from Deloitte, despite having registered as creditors months ago.
Deloitte’s document lists many activities it’s conducted as it works to wind up the Plutus companies, and says it will be “pursuing legal actions over the coming months, commencing with public examinations of relevant persons.
Notice of such examinations will be issued to all known creditors upon the approval by the court and dates set for such examinations.”
The document also says that the matter “it is necessary to apply for directions from the Supreme Court of New South Wales in relation to claims made by Workers in the liquidations.”
No date is offered for that application to be filed, but even once it reaches court Deloitte warns credits the outlook is grim: “At this stage in the liquidations, the likelihood of a distribution to any class of creditor remains uncertain.”