Publicis Mojo creditors feel no Joy
Creditors left out of pocket by failed advertising agency Publicis Mojo are angry that its Kiwi management have resurfaced with a new agency and a clean balance sheet.
The new agency, Joy, is the brainchild of former Publicis Mojo Australasia chairman and shareholder Graeme Wills, whom critics have accused of personally profiting from the demise of the agency.
However, Wills denies that, saying he left Publicis at the end of 2011 and had been planning to open Joy long before his former agency was liquidated by its French parent company.
That he is now picking up some of Publicis Mojo's former clients and staff is, to some extent, a coincidence, he said.
Food company Goodman Fielder and electronics business Panasonic have followed Wills, as has Publicis Mojo former managing director Kay Boyle.
Local creditors are still waiting to see whether any money will be left over in the liquidation to pay the old agency's bills.
Creditor Neville Carseldine of Auckland-based venue Security said no expense was spared at his most recent job with Publicis Mojo - a Hallensteins' promotional party involving three Playboy playmates being flown onto the grounds of a Devonport mansion by helicopter.
The playmates smiled, posed and chatted with Kiwi celebrities and sharply dressed competition winners at the heavily guarded soiree.
Carseldine said he was left about $3000 out of pocket after the party.
"The thing that annoyed me . . . was the liquidator's letter said the shareholders had placed the company into liquidation as part of a restructuring exercise.
"That just doesn't seem right."
French parent company Publicis Groupe's "restructuring" refers to its axing of the Publicis Mojo brand in New Zealand, although it still has other advertising holdings such as Saatchi & Saatchi and Zenith Optimedia that were unaffected.
Publicis Groupe's finance subsidiary is the largest unsecured creditor of Publicis Mojo, alongside other Publicis-related parties owed $15.5 million.
Trade creditors are owed $345,393. So if the proceeds of the liquidation are paid on a pro rata, or cents in the dollar, basis, then they could see little reward.
However, liquidator McDonald Vague's report also refers to a note in the company's accounts that assigns responsibility for Publicis Mojo's debts to its main shareholder, Publicis Groupe.
The note in the company's accounts filed in June last year indicated Publicis Groupe Holdings would provide funds as and when required to enable Publicis Mojo and its subsidiaries to pay their debts for at least one year from the date of approval of the financial statements.
Liquidator Peri Finnigan has requested a legal opinion on the enforceability of that letter of intention, but until that is settled she is unsure whether local unsecured creditors would be paid.
Publicis Groupe's net income was € 600m ($958m) on revenue of € 5.8 billion for the 2011 financial year.
Image Centre Group director Mike Hutcheson, a former managing director of Saatchi & Saatchi whose company is also listed as a creditor, said he believed Publicis Groupe would meet the debts to uphold its reputation in New Zealand.
"It would be in their interests to do so, otherwise it's going to cast aspersions on their other interests."
Wills said he was rebuffed in an attempt to buy Publicis Mojo last year by its French owner, but couldn't see why a liquidation was a better outcome for the main shareholder than a trade sale. Wills said Auckland was a crowded advertising agency market, with dwindling advertising spending by a small group of large clients and that made it a hard place to do business.
He said his new agency would be smaller, more flexible and less dependent on permanent staff.
- © Fairfax NZ News
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