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Getting Scalier: David A. Collard’s creditors, lawsuits, now a thing of Scale

by Sean Johnson | Aug 9, 2023 | Business, Latest Posts

Australian entrepreneur and ex-PwC partner David A. Collard is being sued for rent on both his fancy apartment in Manhattan as well as Scale’s 88th floor World Trade Centre head quarters. That’s on top of an ATO tax raid, unpaid staff and creditors, and defaulting on the purchase of Britishvolt in the UK. Sean Johnson of Open Politics reports. 

When Deputy Prime Minister Richard Marles described David A. Collard as a “force of nature…innately entrepreneurial…values driven”, he at least got part of it right. As Collard’s mounting retinue of creditors would see it, he is certainly a force of nature.

Same goes for Peter Dutton. The Opposition labelled the former PwC partner “a Superman” with “the ability to see around corners and over the horizon.” Surely, he is a superman of not paying his bills. 

Collard is the chief executive of Scale Facilitation and Scale’s landlord is taking legal action against the company over unpaid rent on its 88th floor office at the World Trade Center in New York, Open Politics can reveal. 

A petition lodged with the New York State Civil Supreme Court on 28 June by Hyperscience, a sublandlord of the 88th floor, alleges Scale Facilitation Partners LLC is in rental arrears of US$455,518 (A$696,924) and has refused to vacate the premises. 

Scale only took possession of the 88th floor in February this year, adding to their existing lease of the entire 82nd floor, and on 9 May Hyperscience issued their subtenant with a default notice for “defaulting on their monetary obligations”.

Scale didn’t respond to the notice and nor to the subsequent Notice of Cancellation and requirement to move out of the premises, forcing Hyperscience to commence legal action the following month. 

The $455,518 in alleged arrears comprises non-payment of rent in May and June 2023, at the monthly rate of $200,561, a cleaning charge of $8,778, and various water, electricity, and security charges.  

Not the only legal action

These revelations come the same day The Australian revealed Scale’s CEO David Collard is being pursued in the courts by his landlord for not paying the rent on his luxury Central Park condominium at 157 West 57th Street. 

According to a summons and complaint filed with the New York Supreme Court on 7 July by plaintiffs Yiqian and Sichao Liu, Collard’s company 3C USA LLC (Sanitex Global) has not paid the US$75,000 (A$114,607) monthly rent since 1 May and owes at least US$150,000 to the Lius up until 30 June. 

The complaint states Collard is personally liable for Sanitex’s rental arrears as he provided a written guarantee that the company would meet its rental obligations, which would now be around A$343,086 unless he has vacated the flat. 

Broke?

Surely the end is nigh for Collard and Scale Facilitation. 

In addition to rental arrears, Scale and subsidiary companies can’t pay staff and creditors in Australia and the United States (leading to people leaving in droves), has missed the final payment to purchase collapsed lithium battery startup Britishvolt, and has been raided by the AFP over an alleged $150 million tax fraud.

It’s difficult to see a way back. 

Is PwC caught up in Scale Facilitation’s alleged $150 million tax fraud?

Questions for Deputy Prime Minister and Opposition Leader

Deputy Prime Minister Richard Marles probably regrets describing Collard at opening of Scale’s New York office in December 2022 as “force of nature…innately entrepreneurial…values driven”? 

The same for Peter Dutton, flown to the shindig at company expense, who said Collard was a Superman with “the ability to see around corners and over the horizon.” (Well, he didn’t see the AFP coming, Peter.)

While Marles and Dutton were not to know about Scale’s subsequent tax and financial problems, they showed poor judgement in their effusive praise of Collard, someone with very thin experience in innovation and commercialisation and no track record of manufacturing and lithium battery technology. 

To be fair to Marles, Scale’s Australian offices are based in Geelong, in his electorate, and Collard has been promising to build a gigafactory there, so we can understand why he might’ve felt the need to promote the Geelong boy made good. 

But why didn’t Marles and Dutton ask themselves how a company with no obvious revenue stream, apart from a face-mask contract, was able to lease office space at the World Trade Center? 

They should’ve run a mile. 

As it is, they’ve both gone to ground, with Marles refusing our FOI for his communications with Collard on the basis that it would “substantially and unreasonably interfere with the performance of the Minister’s functions.”

Dutton didn’t comment, but we suspect he wouldn’t describe Collard as Superman if he had his time over again. 

Sean Johnson is the founder of political transparency website Open Politics and a former federal ministerial adviser and public affairs consultant.

 

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