The inside story on the All Class collapse

The inside story on the All Class collapse | Insurance Business

The inside story on the All Class collapse

“I feel duped,” concedes Koert Slik, the managing director of Chiswick Consultants. “I was led to believe All Class was a healthy business. I was effectively lied to and sold a dud.”

In January this year, Slik was contracted to help All Class create an authorised representative (AR) distribution model. He had known of the All Class managing director Leroy Bowmaker for some years, so it seemed like a good business proposition.

Nothing could have been further from the truth. Just three months after Slik started due diligence on the company to establish if All Class could implement an AR model, the broker was in liquidation, owing creditors $1.9m. The final straw came this week when Bowmaker was  banned from broking.

Slik stresses he was unaware All Class was in financial difficulty, and effectively “trading insolvent”, when he agreed to work with Bowmaker.

“There was nothing to indicate to me that Bowmaker was anything other than a seeking to grow his broking business. Leroy had total control of everything.”

Slik began working with All Class on 29 January. In his first three weeks there, he insisted Bowmaker provide him with the company’s financial information for the due diligence process.

“Whenever I asked him for the information, he would say he was still compiling the data,” Koert says. “I pressed him for that data for three weeks. By the fourth week the information was still not forthcoming. I made it clear to him that unless he made the financial information available that I would not be able to continue working with him.”

It was in the final week of February that Slik realised why Bowmaker had been so reluctant. Called into a meeting with Bowmaker, the All Class MD told him he had made some “significant mistakes” and now wanted to sell the brokerage.

“I was absolutely shocked. I didn’t know what to think.”

Ironically, to sell the business, Slik needed to do a financial audit of the business – the task he had originally been contracted to do. Under instruction from All Class’ lawyers, Slik was appointed interim Responsible Officer (RO), a position previously held by Bowmaker. During the audit, in the first two weeks of March,  Slik discovered All Class owed creditors $1.9m.  He also learned that Bowmaker had fallen behind on premium payments to insurers and that ASIC had requested a meeting with Bowmaker.

Slik says it was one of the “most stressful periods in his career” but he never considered jumping ship out of “a moral obligation to All Class’ staff and stakeholders”. In the second week of March, Slik stepped down from the RO role and left the matter with ASIC.

Koert has not spoken to Bowmaker since the meeting in February and does not know what he is doing now. Although, Bowmaker owes him money, he has no plans to pursue it. Instead he will “take it on the chin and learn from it”.

“I don’t think there would be a positive outcome. There is enough on Bowmaker’s plate. I just feel sorry for him.”

Read the second part of Koert’s exclusive interview in tomorrow’s newsletter.