Supreme Court sets aside statutory demand against Smiles Inclusive
Written on the 5 December 2019 by Matt Ogg
Within a week of having a major suit against it dropped, dental care company Smiles Inclusive (ASX: SIL) is today claiming victory in another legal matter.
This morning the Supreme Court of Queensland set aside a statutory demand served by the former owners of Sydney-based Future Care Mobile Dentistry (FCMD), who sold their business to Smiles in December 2018 for $1.1 million.
The company was awarded costs in connection to the application for setting aside the statutory demand.
Former FCMD owners Arthur Bushell (pictured) and Christian Perez claimed they were still owed $330,000 by the company, but Gold Coast-based Smiles disputes this.
"The Company remains of the view that it has an offsetting claim against Future Care for amounts owed under a sale agreement with the Company," Smiles Inclusive said in today's announcement.
When the statutory demand was served, Smiles Inclusive CEO Tony McCormack described it as a "nothing more than an abuse of legal process to exert commercial pressure on the business".
Speaking with Business News Australia today, Bushell said he would now be taking the issue to the next stage.
"I'm not happy to say the fact remains they owe us $330,000 and we'll progress it to the next stage," he said.
"We're not giving up because they owe us the money, they know they owe us the money, the documentation they've got says they owe us the money. We'll just have to go to a court of law."
Today's decision will be a silver lining in what has been a very stormy year for Smiles Inclusive, which launched an IPO in April 2018 with the purpose of raising funds to acquire clinics and set up joint ventures.
That enterprise has been managed poorly with repeated instances of overoptimistic guidance released to the market, leading to disillusionment amongst many joint venture partners (JVP) and a collapse in shareholder value over the past 12 months.
Drastic executive changes have also failed to turn the company's fortunes around.
In the company's prospectus it set out to raise $35 million, equating to a market capitalisation at the time of $57.9 million.
That value has eroded to just $5.7 million today, propped up by a $3.3 million injection in October from a highly underwritten capital raise.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg