Liquidator of Altada says directors chartered private jets and took first-class flights

Altada’s Collapse: Inside the Downfall of an AI firm

the once-promising AI firm Altada has fallen into governance,leaving behind a trail of unpaid creditors,questionable business practices,and unanswered questions. John Healy, the appointed liquidator, painted a grim picture in a recent report to creditors, outlining a company grappling with significant financial distress and potential misconduct by its directors.

Troubling financial Picture

Healy’s report revealed a company riddled with financial problems dating back at least 12 months before his appointment. Altada, established in 2017 to deliver AI solutions across various industries, had incurred losses for 19 consecutive months, accumulating losses exceeding €9.5 million.

unpaid tax liabilities totaling €2 million to Revenue, coupled with a mountain of creditor claims stretching back five years, underscored the company’s dire financial situation. Unpaid Revenue claims amounting to €2.1 million, including an unsecured sum of €490,000, further highlight the extent of Altada’s financial woes.

Concerns Over Director Conduct

Beyond the financial troubles, Healy expressed serious concerns regarding the conduct of Altada’s directors. The report raised red flags about potential misuse of company funds, including:

• Private jet charters
• €300,000 in undisclosed expenses
• First-class flights and five-star accommodation
• Payments towards the running costs of a school
• Large bonuses to staff and directors in December 2021, despite the company’s inability to meet its payment obligations
• ATM withdrawals and bank transfers to a personal Revolut account
• Unusually high expenditures at bars, restaurants, and nightclubs

“However it must be noted that the directors dispute most of my concerns and believe they acted honestly and responsibly at all times,” Healy stated. “This may ultimately be a matter for the High Court to determine if proceedings are issued, having heard both sides’ accounts and considered the evidence.”

Ongoing Inquiry

Healy’s findings come amidst an ongoing Garda (Irish police) investigation into Altada’s activities. The liquidator is fully cooperating with the investigation, which remains active.

impact on Employees and Creditors

The collapse of Altada has had a devastating impact on its employees and creditors. Multiple former employees have successfully pursued claims through the Workplace Relations Commission,highlighting the company’s failure to fulfill its contractual obligations.

Healy estimates unsecured creditor claims at approximately €6.4 million, with the likelihood of them receiving a dividend from the liquidation being slim.

Altada’s downfall serves as a cautionary tale, emphasizing the importance of financial openness, ethical conduct, and responsible stewardship, especially within the rapidly evolving AI sector.

What lessons can other businesses, especially in the rapidly evolving AI sector, learn from Altada’s cautionary tale?

Altada’s Collapse: A Deep Dive with Liquidator John Healy

Archyde: Thank you, Mr.Healy, for joining us today to discuss the dramatic fall of Altada, the once-thriving AI firm. Could you walk us thru the financial picture that led to its eventual collapse?

Financial Distress

John Healy: Thank you for having me. Altada’s financial troubles were indeed severe and longstanding.The company had been incurring losses for nearly two years before I was appointed as liquidator, accumulating losses of over €9.5 million.Additionally, they had notable unpaid tax liabilities and a mountain of creditor claims stretching back five years, totaling approximately €6.4 million.

Archyde: that’s alarming. How did such extensive financial problems go unnoticed for so long?

John Healy: That’s a question I’ve been investigating. It seems Altada’s financial reporting may not have provided a full and accurate picture of the company’s health.

Concerns Over Director Conduct

Archyde: Your report raised serious concerns about the conduct of Altada’s directors. Could you elaborate on some of the questionable spending highlighted in your findings?

John Healy: certainly.Among other things, the directors sanctioned private jet charters, first-class flights, and five-star accommodation, and also personal expenses like school running costs and unusual expenditures at leisure establishments.Moreover, staff and directors received large bonuses in December 2021, despite the company’s inability to meet its payment obligations.

Archyde: Were these expenses justified, or does it seem like misappropriation of funds?

John Healy: I have my concerns, but it’s vital to note that the directors dispute most of these issues. They claim they acted honestly and responsibly, which may ultimately be for the courts to decide.

Ongoing Inquiry

Archyde: The Garda is currently investigating Altada’s activities. How is your role as liquidator interfacing with this investigation?

John Healy: I’m fully cooperating with the Garda investigation, providing them with all relevant data as I uncover it during my liquidation process.

Impact on Employees and Creditors

Archyde: What consequences has Altada’s collapse had on its employees and creditors?

John Healy: It’s had a devastating impact. Many former employees have successfully pursued claims due to unmet contractual obligations. As for creditors, they’re facing slim chances of receiving a dividend from the liquidation, with estimated claims at around €6.4 million.

Archyde: Given Altada’s troubles, what lessons can other businesses, particularly in the rapidly evolving AI sector, learn from this cautionary tale?

John Healy: The importance of financial openness, ethical conduct, and responsible stewardship cannot be overstated. Regular and transparent reporting, mindfulness of company spending, and respect for contractual obligations are key to maintaining trust and integrity in any business habitat, especially during times of growth and innovation.

Archyde: Thank you, Mr. Healy, for providing such insight into Altada’s collapse and its implications. It’s a Complex and troubling case that raises many questions about the future of AI firms and corporate governance.

Readers’ Thoughts

What do you think about Altada’s downfall,and the questions it raises about AI firm governance? Share your thoughts in the comments below.