Quite a hit…
Gordy Merchant, the one-time almost billionaire creator of surf brand Billabong, has launched a lawsuit, described as “massive”, at tax heavyweights Ernest & Young and one of its partners, blaming bum advice for costing him around fifty-eight mill.
Merchant says the company’s advice on how to structure a company sale in 2015 got the Australian Tax Office on his tail, cost him thirteen mill in penalties and had him banned from running his self-managed super fund.
And, although he hasn’t calculated the exact damages, these things take time as you might imagine, Merchant says it’s been about fifty-eight mill so far.
The whole thing goes back to when Merchant sold out of bioplastics company Plantic in 2015 for fifty-four mill.
There was, according to Brisbane’s Courier Mail,
“A series of deals between Mr Merchant’s entities including his self managed super fund that he claims were done in accordance with specialist EY advice.
“Part of the deal included Mr Merchant transferring over 10m of his Billabong shares at a loss and writing off debts from cash he had loaned to Plantic. In 2017 the tax office audited the income tax affairs of Mr Merchant, his family trust and superannuation accounts and later looked into the deal.
“It last month declared Mr Merchant and his super fund owed about $45m in tax and interest and it also imposed penalties worth about $13m…Mr Merchant is claiming damages for breach of contract and negligence alleging EY should have known he was “vulnerable to suffering economic loss if EY failed to use reasonable care and skill” in structuring his affairs.”
The most I’ve ever lost via dumb tax advice was thirty-six gees.
The accountant said set up a trust, do this, do that, pay this on that day, all will be good my brother don’t you worry about a thing, and then, a few months later, a letter came in the mail advising the thirty-six k figure.
Called him and he denied everything.
The first instance of gaslighting I’d experience although it wouldn’t be the last.
Funny world.
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Merchant V Ernst and Young? Good luck with that Gordo.
I was thinking about suing Citibank or maybe Pfizer. Surf with a cool attorney, does some business stuff… yup, no retainer go after the giant boys.
They each gave me bad advice. Was also thinking about suing both of them so that my lawyer boy could earn double pay. Didn’t pass that thought by him yet, see how it goes.
Should’ve paid attention to Sunny’s chest
Geez, spot the accountant!
We’re supposed to feel sorry for the poor old rich guy??
I feel so sorry for him, what a tragedy.
Gaslighting – a term that has gained much more widespread use since 2016.
trending on twitter
Just wondering how former Pro Junior and Bells winner , Joe Engel ( German for Angel ) ended up ? I over heard him early 80s at Elouera ( ok midway ) call Larry Blair BARRY LAIR and thought he was so cool , and then a few years later at Bondi proclaiming that “he had had better waves on Mars this morning “ and thought he might have gone off with the fairies ….
Was working mines inland I think. Loved Joe surfing at Burleigh and Nias with Thornton Fallander. Met TF at Uluwatu one fine 6’+ day. He destroyed it on his backhand. Best live surfing I have ever seen there.
That combo he did at Nias … tube to roundhouse is burnt into my memory forever .
Yeah, that sequence in Tracks played a big part in my surfing aspirations. Even this morning, I was trying to wrap cutties around and bounce off the whitewater like that. Gotta admit, I nearly wet myself with pubescent excitement when the guy I had been casually talking to for 10 minutes in the warung introduced himself as Thornton.
Hi died a few years ago. Maybe 5 years ago but would not surprise if it was 10. Ended up in the Territory (I think) working in the mines. I might be wrong but I think he boozed himself to an early grave.
I remember reading an interview with Tom Carroll who said Joe Engel was unstoppable as a junior and how he could never beat him.
I had a mate who thought that Bruce Wayne was “Bru Swayne”. He also thought O’Neill wetsuits was “O’Leinn”. I guess he was dyslexic.
Thanks Stance .
His dad would park his car at Cronulla Station , catch the train to go to work , and Occy , without a license , would steal it and drive to SummerCloud and then try to get it back and park in a similar spot …. still remember the orange Jim Banks he was riding at 16:40.
you need to write a book…. Sean D probably could use some material.
so… “Only a Surfer Knows the Feeling”?…
I was told this was a surfing website with great writers and blogs.
All i’ve seen is shit shark stories and crap real estate reports.
Should I sue the cunt for damages who told me this was a surf site?
For a millionaire to even entertain having to pay tax his accountant must’ve really fucked up.
What is a “super fund” in Australia? Are they akin to a hedge fund in the States? Sounds like it holds equities, and Merchant losing his ability to manage his super fund appears as though he ran afoul of Australia’s version of the SEC.
Super funds, or superannuation, is a compulsory scheme where employers
pay a portion of your earnings into an investment fund which is only
accessible after you reach retirement age. Perhaps analogous to a 401K in the States,
though here every employer must make contributions on your behalf (even for
casuals).
Most people just sign up for whichever fund their employer recommends, although some people may choose to have a self-managed fund. Not sure exactly what Gordon has done wrong, but an example of what could get you in to trouble is something like a person selling shares in a company to their own self-managed super fund (essentially themselves) at a loss to avoid paying tax.
You can avoid paying super if you work overseas. Or, pay yourself a dividend (via trust) rather than a wage. Works if you are a consultant or sole trader. Then you pay 25k (max) of cash into your super fund at the end of the year and claim it as a tax deduction.
My loose understanding of the crazy concept is the Australian government forces a employer too thieve 10% of a workers wage and put it into a ” FUND” that than invests the stolen wages anyway it wants and once the worker turns 70 he gets the cash back minus fees the “FUND” charges.
that’s if the employer even bothers too put the money into the FUND.
IT’s a ridiculous system too fund old age.
Its popular in two or three other countries around the world who are actually dumb enough to use the system.
Trusts are good dude but if you tried to do income splitting by chucking your whole wage into a trust and then split out dividends to the wife and kids you’re gonna get caught.
Philanthropists don’t pay tax, poor people do!
That’s the one good thing about being flat broke for years–taxes pretty much turn into a wash.
Nice idea but Rich cunts be rich cunts, can’t help themselves. Their 15 won’t equal your 15.
If you vote left you should pay 65% and donate the rest to Tyler Wright.
Give this man a Trump cock sock.
Prolly got one already ….
Notice how everything is slanted in bex’s world… never equality or balance, nope.
He is, unashamedly, BGs Filthiest Troll.
It’s been said before
Only a Tax Accountant
Could Know the Feeling
When you’re old and your dick stops working do you just collect money?
I also enjoy watching sunrises and throwing sticks for long-haired spaniels.
The last bit a sneaky euphemism?
A sweet transvestite w keyboard.
Grndr skills.
I just spat out my dentures
A bright future indeed
Fucking hell haha.
I love it when tax avoidance backfires. Think of all the good that the state will do with that money – social housing, health care etc – and weep!
… paying the politicians’ rich mates’ companies.
We have been trying to get a shed/storage space/ cupboard at Elouera Surf Lifesaving Club for the last 40 years to stow our Boardrider’s Club’s contest tents , bbq etc …. no deal .A couple of years back the Mayor builds himself a Cafe attached to the northern end of the club 30m from the shoreline ? Apparently he was so honest , he actually walked out of the room just before the vote was taken so it would appear fair ……
I saw with my own eyes a local councilor who had schemed a scheme up, get very upset when that scheme was foiled by one of the other guys he had done a deal with didn’t show up and therefore ruined his cunning plan.
How much ya got left, Gordo ?
More than EY ? Coz you’re gonna get bled white …… while the briefs send each other letters for years n years n years. The court dates getting shoved out into the dim, distant future.
It’s a tax write off
Ya still gotta pay, bexy.
It gets old really fast.
They’re gonna bury him on account of principle alone, we’re EY, don’t fuck with our reputation.
Exactly.
He could always do a Skase and say goodbye Australia hello Majorca …? . There a more waves in the Med than they would have us believe ?