SINGAPORE - Luxury marketplace Reebonz, hit earlier this year by complaints from buyers and sellers on its platform, announced on Friday (Sept 10) that it is in creditors' voluntary liquidation.
In a notice in The Business Times, Reebonz director Samuel Lim Kok Eng said the company "cannot by reason of its liabilities continue its business".
He also announced the appointment of provisional liquidator Tee Wey Lih of Acres Advisory on Sept 3 for the winding up of the company.
Reebonz’s liabilities are estimated to be in the region of $65 million with the bulk of the exposure on financial institutions, Acres Advisory said in response to queries from The Straits Times.
A creditors’ meeting is scheduled for Oct 1 with notices to be issued to the creditors on Oct 17, it added.
In a creditors’ voluntary liquidation, directors of the company make an assessment that it is insolvent or likely to become so, BT noted. They then pass resolutions to put the company into provisional liquidation.
This liquidation decision is then confirmed by a subsequent meeting of shareholders, followed by a meeting of the creditors.
At the meeting, the creditors can decide if they want to keep the provisional liquidator nominated by the company, or if they prefer to change the liquidator.
Reebonz, which runs an online platform for buying and selling a wide range of luxury items, came under fire from disgruntled sellers who claimed that the company had not paid them on time.
The Straits Times reported in August that Reebonz owed more than $30,000 to 11 sellers on its platform as at Aug 26, according to complaints lodged with the Consumers Association of Singapore (Case).
Case received 22 complaints from buyers and sellers about the home-grown firm this year, up from 12 last year and three in 2019.
Although the agreed payout period is 20 business days, sellers complained they had not received payments even after waiting for several months.
Reebonz offers a White Glove service, where it picks up an item from the seller for free and makes an offer.
It then takes a cut of up to 40 per cent if the item is sold.
Sellers are notified after the item has been sold and past the return period. They will then be paid by bank transfer or through Reebonz store credits within 20 business days.
Mr Robson Lee, a partner at law firm Gibson Dunn, said: “Sellers and service providers who are owed money should file their proof of debt and be alert to any creditors’ meeting so they can have a better picture of the situation.
“The amount they are owed individually might not be a big enough sum to incur further costs. If they can start some form of group, they can exert (more) influence as a collective group of creditors.”
TSMP Law Corporation partner Felicia Tan added: “Unless the individual sellers have security, they are unsecured creditors who are most unlikely to receive full repayment.
“Unsecured creditors can only wait in line to receive some payment after everyone else is paid. It could take months, or even years, before these sellers see some cash.”
Chan Neo LLP partner Daniel Tay said any investigation or claims are nonetheless subject to proper evidence and may even prolong the winding-up process.
Reebonz’s website said it was undergoing maintenance from Sept 4, and added that “all orders till Sept 3 will be fulfilled”.
“We will not be accepting new orders,” it said, noting that it will keep customers updated soon.
Reebonz was started in 2009 by Mr Lim and co-founders Daniel Lim and Benjamin Han.
In 2010, it opened a physical store at Clifford Centre. The store closed in 2016.
It then opened a US$29 million (S$39 million), eight-storey headquarters and e-commerce hub in Tampines in 2017 to house its operations and warehousing and distribution facilities.
Reebonz, which reportedly had Temasek-backed Vertex Ventures and Mediacorp as early investors, was delisted from the Nasdaq last year, almost 1½ years after it went on the US stock exchange.