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Thursday 29 November 2012

I am sorry!

If you haven't heard the news yet Deloitte in Brisbane have been appointed by HSBC bank as receivers to my company, Skelton Sherborne. Therefore they are currently in full control of the company not me.

Deloitte have advised they intend to keep the business trading while offering it for sale. An advertising campaign began yesterday in various Australian newspapers.

Skelton Sherborne has truly great people who I can say without reservation are among the shipping  industry's best in the world. I am extremely grateful to every one of them for the incredible professionalism they are displaying right now in very challenging circumstances. I am so proud of them. Most of these people have given the business between 8-15+ years of their lives and I hope they think it has been an interesting, fun and personally rewarding ride with the company so far. I thank them for the dedication to company and I and for their hard work. I am personally doing my best not to let them or their families down.

This team has built the company's systems and procedures from the ground up and they are world class and very innovative. Skelton Sherborne's business model and processes are probably the most copied by competitors in the heavy logistics market. With some amusement, the team and I have always taken this as a compliment. 

The company would make an outstanding acquisition for someone and has a track record of good profitability and growth. If you are interested please contact Deloitte in Brisbane directly.

So what happened at Skelton Sherborne for the company to be currently in receivership?

Clearly we lost the support of our bankers, HSBC. Late on Tuesday the 20th of November without warning or notice they froze Skelton Sherborne's bank accounts. The company was not outside of any bank covenants or limits. Furthermore the company was trading very profitably having just delivered the best four months results in years. The company did not have a single default or judgment against it that would give justification for our banks action. 

Since late September this year HSBC had imposed a rapid step down of credit facilities the company relied upon. They required the business to reduce one of those facilities by $100k every Friday or they threatened receivership. I am proud to say that with the tremendous help and support of my team, long standing clients, suppliers and friends that Skelton Sherborne met this step down as impossible as it initially seemed. We were still trading profitably and I thought the receivership threat from the bank was removed. Increased attention was then given to reducing creditor balances as fast as we could. As a consequence of the rapid step down required by our bank our cashflow was under pressure but recovering.

HSBC's action in freezing our accounts last week paralyzed us to pay customs, shipping lines and other suppliers in order to ensure smooth cargo and service delivery to our valued clients.

The company immediately engaged our lawyers to try and get this freeze lifted, seek our banks justification for this action and to reserve our rights to claim for any losses and damages caused. As we were within all bank limits we had hoped that we could quickly resolve this with them and continue serving our clients and paying suppliers. Unfortunately we were unable to get HSBC to lift the freeze and their lawyers informed us that all of our banking facilities had been cancelled and withdrawn. At the same time we were also given an immediate demand to payout the full balance of the remaining facilities. The company could not meet an "immediate" demand of that magnitude and subsequently HSBC appointed Deloitte as their receivers.

I know this receivership is hurting people. I humbly humbly apologise to my team, our clients and suppliers who have been hurt or affected by what has transpired with Skelton Sherborne over the last 9 days.

I am working very hard to try and somehow regain control of the business and continue on trading after the receivers have done their job for HSBC if I can. This situation is temporary and I am fighting like hell and determined to be one of those many companies who have successfully emerged from a bank receivership. This situation is a massive setback that will slow me down but it will not stop me.

Deloitte are making decisions that they think are in the best interest of the company and no doubt their client, HSBC. Many of the these decisions and actions my team and I do not agree with nor in anyway condone. We are sad to see some of our great clients, who have become friends as well, incurring further expenses that in our view could have and should have been avoided or at least minimised. Client and supplier relationships are being damaged and right now losses are being incurred. I am powerless to stop this at the moment.

For the company's competitors, who are nearly all former employees of mine, this situation presents an amazing opportunity. It's not every day that the biggest player in their market suffers misfortune like this. I don't blame any of them for trying to exploit it. I would seize the opportunity myself and indeed would buy the company from the receivers if I were them. By the way to my former employees...if your non-compete obligations in your contract have not expired then I strongly suggest you think very carefully. You know that we always enforce them and seek our damages. This situation will be no different.

I take my responsibilities as director very seriously and have been at the office every day. I have not run away overseas as some competitors are saying. Everything that I can do to improve the situation is being done and I know and accept the ultimate responsibility rests with me.

My team and I have at times been overwhelmed with calls and emails through this period. I am sorry if we have not been able to get back to you in a timely fashion. We have frequently been reliant on Deloitte for directions on how to respond to people.

It has been heartening to my team and I to receive so many calls and emails of support from clients and suppliers. Thank you! It is nice to know that you believe in us and the brand. Skelton Sherborne is a great company and I am determined that it will keep going somehow and hopefully with me still at helm and the team intact.

Again I am deeply sorry for any hardship, expense or inconvenience this situation is causing anybody associated with Skelton Sherborne. I am sincerely doing everything in my power to make things right.

Please stay tuned to my blog for further updates as this situation is worked through. I might even lift the lid on a few secrets on people in the coming days.

All for now,

Brad Skelton

The Shipping Bloke. 


  1. I've known you for over 10 years and respected your determination and capability - seriously - appreciate the toughness of the situation and wish you the best in working through the adversity and overcoming it. Very much inspiring your sharing the challenge you face too. cheers,

  2. I'm lost for words and feeling extremely disheartened by this news. You won't find a more resilient, honest, hard working and determined entrepreneur than Brad Skelton. It takes an incredible amount of courage to face this situation and share it with the people I know he holds in the highest regard - you. We have every reason to believe that Brad and his team will pull through in some miraculous way and come of this stronger than ever.

  3. I've had the privilege of working with Brad Skelton over the past 10 years and have admired his integrity, toughness and business acumen. This will be a setback from which he'll rebound and prove that he has what it takes. I hear that banks are tightening up on credit and this often creates a domino effect within industries and related businesses. If a business as well run as Brad's is in trouble then we all need to watch out!

  4. Brad, as those that understand business know, businesses are built on relationships and relationships are built on trust. For this reason I know that you will pull through this and your customers will support you. As for HSBC, well the bean counters have just publicly soiled themselves and I hope that anyone that has dealings with them, pre-empt the end of their relationship with them given the way they view businesses.

  5. Hi Brad,

    I’ve been in this exact situation myself, and with similar unfounded circumstances, except the bank timed it more perfectly then - to 1 week prior to Xmas.
    I’ve have been one of the FEW who have survived a receivership in this side of the tassie - most principles are so weakend by this, unable to think sensibly, & rely on their professional advisers ( e.g. lawyers & accountants - a big mistake ) You must control the recovery procedure yourself – if your good mental health allows it
    Receivers are there for self interest only & to extend the receivership period so that they can bleed to remaining equity to death with their fees. Receivers & managers are not business people, they have a uni degree but no business sense, have no faith in them
    I have the same low faith in lawyers & accountants as advisers, they simply don’t know ways out of this kinda mess

    If I can give any advice : -

    first keep good health & mindset & family intact, this is important
    Second do all you can to satisfy the bank’s demand, and simultaneously sack the receivers, this is important. Call on your personal business friends to lend a hand with this ( with their financial help ) – maybe some of your faithfull & longstanding staff could also become shareholders
    Keep the business trading & then go “bank shopping”, you’ll be pleasantly surprised with this option
    If successful, your good customers will be behind you all the way

    Thinking of you &
    Best Regards,

    Don Hughes

  6. Oh this is awful after working so hard to push through after the GFC. Brought a tear to my eye. Your many friends in EO are thinking of you and hoping you steer the ship though this. You've done an amazing job coming this far, and I hope you look back on this dark period as just the final trough before emerging from the long storm.

    Scott Jones

  7. Brad, Not many people would go out on the front foot and talk about this - thank you for sharing. I am both a supplier and a customer - Happy to support you as much as we can!

  8. Brad, you are one of the most honourable and ethical person I have met. You are passionate, intelligent and a fighter. I send you strength and support and hope that your clients, employees and staff understand this difficult situation and support you as I know you have supported them.

  9. i have read with great interest and sadness the letter you have written, i in a much smaller way suffered a very similar fate with HSBC back in 2008... it never ceases to amaze me the short sightedness of banks... the problem with banks is they are run by people with degrees in the principles of business not in the actual running of business and therefore cannot have the practical experience of running a business! the reality is what has happened with your business... i wish you all the luck in the world and hope you come back bigger and stronger and wiser for it... as for HSBC.... hopefully one day they will need help and it wont be forth coming but then the goverments of the world will step in and bail them out..... Mike Tyrell Uk

  10. Hi Brad,
    This article was bought to my attention by one of my clients via his finance broker. This news has obviously travelled far and wide, I wish more small business owners can learn from this. Your bank can shut you down if they want to, even if you haven't defaulted. The broker who has forwarded this article has recommended to share borrowings around with different lenders, so no one institution has full control, I will be making some changes. I have also forwarded this article to some creditors I know that use HSBC with a beware message.

    I read some of the comments from your customers and creditors, they obviously respect the way you conduct business and yourself. This is a major hit, but I am sure you will maneuver your ship off the rocks and build a better and stronger one. There is always a way as long as you are still standing. This will just make the come back so much sweeter. I wish the very best of luck to begin trading again.

    James Muhling