News

Tarnishing a Reputation

Tarnishing a Reputation or is this Defamation?

Background – The Reputation

Leigh O’Brien is the power and energy behind the Ettamogah Group, its new restaurant in Melbourne, the well known Ettamogah Pub in Albury and the several Ettamogah licensed venues around Australia. He is a successful business man from Melbourne with over 30 years experience in property development, hospitality development and licensing.

From the age of 18, Leigh has been developing properties around Melbourne. He later began his own building company on the Gold Coast where his major clients were from Asia as well as Australia. In addition, he ran several types of companies including a large plumbing and maintenance company with Coles, Bond University and Woolworths as clients.

In 1997 he took over the leasehold at the Craig Hotel in Darling Harbour, Sydney and installed the Ettamogah concept. He then built it into a business which at its peak was turning over almost $1 million per week. This was eventually sold at a considerable profit. Following this, he took over a the lease of a property at Rouse Hill in Sydney, on which he built an Ettamogah Pub and Family Restaurant valued at $4 million. At its peak, it handles up to 2,500 people and serves up to 1,800 meals every day. The lease was eventually sold for a considerable sum within 18 months. This model was continued with equal success in Campbelltown which had another Ettamogah venue which was eventually sold at a significant profit. Leigh also bought the original Ettamogah Pub in Albury in 1997 and still owns it today as his flagship for licensing with plans to further develop the area with shopping facilities and a theme park.

Leigh extended the Ettamogah brand into children and family entertainment animation. In 2005, he created and built his own high tech animation studios in Brighton, Victoria. This studio developed and produced childrens’ animation for television and film and successfully negotiated deals with Network 10 and the Nine Network for television broadcasts in Australia of two series L’il Larikkins and Wakkaville.

In parallel with this, Leigh carried on his property development business. He leveraged several properties in Brighton to provide necessary funding for the establishment and growth of the animation business.

In the 2007, a series of events caused significant problems for Leigh’s businesses. Leigh’s wife passed away and, as the couple were extremely close, this affected Leigh’s involvement in the business. At around the same time, the problems associated with the coming Global Financial Crisis caused a bank lender to review Leigh’s arrangements for funding his animation business. Also at around the same time, a dispute with an architect over a property development resulted in the need for Leigh to start selling some of his properties. This together with the bank calling in its debts accelerated the rate of property sales, some at a considerable loss compared to assessed value. This knock-on effect brought troubles for his animation business and he employed an administrator to trade its way out of its losses. However, it soon became apparent that this administrator did not understand the business. In collusion with other interested parties, he hastened the demise of the animation company Ettamogah Entertainment. At the time, there was mis-reporting of the downfall of Leigh’s company in the press mainly because the main protagonists against Leigh painted an unduly negative picture of the business to support their attempts to gain benefit, or minimise their exposure in the wind up of the business.

Although Leigh lost a substantial number of his properties which were sold at a significantly reduced value, he has been able to recover and demonstrate through litigation that he had been unfairly treated by some involved in the windup of his business. He has also retained all of the intellectual property associated with the Ettamogah brand and has been able to regain control of the Ettamogah Pub property in Albury.

However…..

However, If you do a google on Leigh O’Brien, you find out all sorts of unsavoury pieces of information on the man. Is it true?

Further googling indicates that all of this unsavoury information is being supplied by the Fairfax Press. Is their information well based? Are they carrying out some group hounding to pull down Leigh’s reputation?

It would be easy to form they view that they have some sort of unstated vendetta against Leigh O’Brien. However, from our experience of having been the focus of negative articles by the Fairfax Press, we have concluded that this is the result of poor, low quality journalism heightened by a lack of preliminary research and a tendency of Fairfax journalists to ask leading questions to make “their facts” fit into their biased views in order to gain profile for their article.

Let’s look at some articles:

The Age 29 May 2011 by Mark Russell

The key “unsavoury” points in this article are:

Pursued for $9 million
Allegedly owes more than 9 million
Mr Ross from Hall Chadwick said he would be taking legal action against Mr O’Brien to recover money owed
Mr Ross said he had received claims in excess of $9 million owed to creditors
More than $600,000 owed to the Tax Office
L&D O’Brien Holdings placed in liquidation over unpaid fees
Mark Newbery applied to the Federal Court to have Ettamogah Pub wound up over $30,000
He pleaded guilty to charges including stalking and using a carriage service to menace
Writers, voice-over artists and animators owed more than $100,000 in unpaid wages
AFAC concerned about linkage to Mr O’Brien and his financial problems.

Having had the benefit of reading through material held by Mr O’Brien relating to the winding up of his companies and all other matters related to the key points above. The reality is (and Mr Russell never followed up his superficial hack work):

Mr O’Brien was never pursued for $9 million
Mr O’Brien never owed the “alleged” $9 million
Closer inspection of documentation provided by Mr Ross to Mr O’Brien indicated that if double counting and inappropriate entries were removed, Ettamogah Entertainment eventually owed around $6 million of which a little more than 50% was owed to entities controlled by Mr O’Brien himself. Mr O’Brien has said that if Mr Ross had carried out his job properly, the company would have traded out of administration.
Mr Ross never took legal action against Mr O’Brien to recover the money
No money was owed to the Australian Taxation Office
L&D O’Brien Holdings was not placed in liquidation over unpaid fees. It was the culmination of the liquidity crisis which commenced with the dispute over fees but really resulted from the National Bank no longer wishing to use mortgages on Mr O’Brien’s property to support the animation business.
Mr Newbery never applied to the Federal Court to have the Ettamogah Pub wound up. All outstanding wages owed by the Pub were paid. Mr Newbery himself instigated problems at the Ettamogah Pub which incurred unnecessary costs for Mr O’Brien. His subsequent history indicates that he himself was of unsavoury character.
The stalking issue is an interesting one. Exchanges of texts and emails between Mr O’Brien and the “aggrieved party” over an extended period clearly indicate that the “aggrieved party” provided a false statement to police in the initial application for an Intervention Order and in a subsequent statement to Police. The reality was that the “aggrieved party” pursued Mr O’Brien and his bank over a business deal that was refused by Mr O’Brien and when this became clear, as she indicated to her accountant, she “got even”. There is documentary evidence of this as well as witnesses to the relevant incidents. Mr O’Brien could have fought these matters in court but was advised by his lawyer not to fight the matter because of unnecessary costs. However, he did not plead guilty but was charged with breaching an order. The police were aware of the false statement and supported a diversion plan which would not result in any conviction. This matter would have disappeared except that a friend of the “aggrieved party”, one Jennifer Haydock, who worked for Mr O’Brien directly contacted the journalist to provide the incorrect information and the picture for the article.
All writers, voice-over artists and animators were paid in the wash up of Ettamogah Entertainment.
The reference to AFAC clearly resulted from a leading question posed by the journalist in order to paint Mr O’Brien in a negative light.

How much of the original article was accurate? Not much! What was the extent of preliminary research undertaken by the journalist? None! Did all of the negativity make good copy? Of course! The fact that this article full of falsehoods remains on the internet is a considerable source of concern to Mr O’Brien who feels that his business has suffered unnecessarily as a result of poor journalism.

This is not all. Fairfax has a number of newspapers around Australia that contain lazy journalists who are happy to draw on articles by other Fairfax journalists regardless of whether the articles were adequately researched. The next few instances demonstrate this.

The Sydney Morning Herald 12 December 2012 by Chris Vedelago

The key points in this article are:

Collapse of the Ettamogah Pub and entertainment empire cost creditors at least $25 million
Liquidators only recover a portion of what is owed
Mr Ross from Hall Chadwick appointed by the Australian Securities and Investments Commission
Mr Ross said that there was an ongoing dispute as to the ownership of the licensing for the animation
two entities could be staking claims to the signature Ettamogah Pub Mob, Li’l Larikkins and Wakkaville cartoons
The company still owes more than $9.2 million
Mr O’Brien could not be reached for comment.

What is the reality that can be gleaned from documentation held by Mr O’Brien

It is incorrect that the collapse cost creditors at least $25 million. The original amount borrowed by L&D O’Brien Holdings was around $12 million and a recent court case demonstrated that most of this was injected into animation. Sales of properties by L&D O’Brien Holdings satisfied most creditors but around $3 million owed by Ettamogah Entertainment was a loss to Mr O’Brien himself.
Liquidators recovered a substantial proportion of what was owed with Mr O’Brien being the only loser
Mr Ross from Hall Chadwick was not appointed by the Australian Securities and Investment Commission. He was engaged by Mr O’Brien to draw up a deed of company arrangement to get creditors paid and manage Ettamogah Entertainment out of administration. According to Mr O’Brien, Mr Ross did not understand how the company operated, reneged on his arrangement with Mr O’Brien and misled the Australian Securities and Investments Commission by pushing the company into bankruptcy (using an erroneous internal assessment by the ATO) when there were a number of arrangements and instruments in place to save the company.
Mr Ross’ lack of understanding about the business was highlighted by his statement that there was a dispute about the ownership of the Ettamogah licence. There was never a dispute as all Ettamogah intellectual property was and is owned by Southern Equity Pty Ltd, another company owned by Mr O’Brien
Furthermore, and in support of this, there were never any claims made to the Ettamogah Pub Mob, Li’L Larikkins and Wakkaville cartoons contrary to the statement made by the journalist. All of this intellectual property is still owned by Southern Equity.
At the time, the company (L&D O’Brien Holdings) was not owing more than $9.2 million. This was an internal accounting figure used by the bank and did not play any role in the eventual out of court settlement between National Australia Bank and Mr O’Brien
The final point is a marvellous line used by the journalist to absolve himself from any and all errors in the article and – Gosh – there were a lot.

And the Humdinger

The Land 18 April 2017 by Blair Thomson

This story is the humdinger of them all in showcasing the laziness of some Fairfax journalists.

The key points in this article were:

The Ettamogah Pub has closed
Closure was due to a dispute between the owner and the lessee of the premises
Social media page deleted and calls to venue rang out
Reference to previous bad articles by Fairfax Media on Mr O’Brien discussed above
Problems involving tradespeople including Chad Witney and a Border electrician
Discussion held with Mr O’Brien

Our discussions with Mr O’Brien indicate:

The Pub never closed its doors. The tenant was kicked out on the Good Friday and the Pub continued trading. The journalist was advised of this but he did not report it.
The journalist did not report on the exact details of the problem with the lessee. The lessee was Ms Yixin Meng of The Cupid Factory. Her main operational person was her husband, Keith Blackney who is unable to hold a liquor licence due to his background. The lessee was kicked out because she/they did not pay rent for 4 months and did not pay for any stock or insurance leaving behind bills exceeding $20,000 for insurance, power etc. Although they were locked out after their removal, they broke in during the night and stole most of the equipment in the Pub including tables, chairs and kitchen equipment and cut all wires including for the phones, the tills and the Internet. This was why calls to the venue rang out, but the journalist did not explain this although he knew the reason.
The social media page was deleted because Mr Blackney had access to the website and was making false comments. This had to be shut down and a new site established. The journalist was advised of this, but did not report this.
Mr O’Brien explained to the journalist why the previous articles by Fairfax Media were wrong but the journalist did not report this. Even so the previous articles were almost five years old and the journalist made no attempt to find out what had happened in the intervening period.
There was selective reporting on the comments by Mr Chad Witney and a Border electrician. Mr Witney invoiced the Pub for 160 hours work over 3 days and was eventually paid. The Border electrician’s work was of very poor quality and this can be backed up by the doctor renting premises on the site.
The journalist mentioned that Mr O’Brien had had fall outs with several former managers of the site but did not report what he had been told by Mr O’Brien, namely that at least one of these managers had stolen at least $80,000.
According to Mr O’Brien, the journalist showed no interest in the falsehoods in the previous Fairfax articles and deliberately understated the explanations of Mr O’Brien, or ignored them.

So here again we have the classic case of a Fairfax Media journalist having a wooden ear, not carrying out any in-depth research before interviewing relevant parties and deliberately skewing the reportage to ensure that the copy fits into a preconceived, biased view. Is it any wonder that the days of Fairfax Media in Australia are numbered.