ATO Warns Creditors About Fashion House

As her fashion label has incurred a $17 million debt last year, the Australian Taxation Office (ATO) is concerned that designer Lisa Ho may try to “phoenix” her new venture.

The designer, who recently unveiled her newest collection in Surry Hills, has actually sold her apparel brand to an undisclosed company for an undisclosed amount. But administrators from the ATO are concerned that this “new company” is actually a phoenix company that will allow for its owners to avoid paying the debts of its previous operators despite glaring similarities in business activities.

Representatives from the ATO raised this issue in a meeting with creditors last month, warning them of the possibility of phoenixing. The old company Lisa Ho Designs has changed to Lisa Ho IP Holdings.

Some administrators, however, have denied that this is the case, and defended this by saying, “The administrators had gone through the sale process and that the best offer they had received was from the director [Ms Ho] … The business was offered for sale to the general public, the transaction that took place was at arm’s length and the business was not continuing to trade.”

These statements were recorded during the minutes of the meeting with creditors and with the Australian Securities and Investments Commission.

The new administrators of Lisa Ho Designs have acknowledge that there were management structure problems, as well as challenges in trading with suppliers, in the old company. A manager have also been found to have misappropriated funds amounting to a $335,000 loss.

The previous company has posted a $2.3 million loss in the 2011-2013 financial year amidst staff cuts, forcing Ms Ho to actually sell some of her own assets, as well as borrow money, in order to pay her taxes.

Meanwhile, last June, Lisa Ho Eyewear brand was also dissolved and sold to Face Optics.

Ms. Ho has not yet made any comments.