Judo Bank tricked me into giving away my business ($10m value) and now they are taking my family home
In early 2022, when we upgraded the canning line at Black Hops I signed off on a multi-million dollar loan from Judo Bank. I was sold on them being friendly to founders, and at that time our business assets were worth more than the amount owing, so I wasn’t super worried about it. But I had personally guaranteed the loan, meaning if the company defaulted, they could come after me personally.
In July 2022 I stood down as the CEO of Black Hops. I gave multiple warnings to the other Directors that if they didn’t do something aggressive about costs and specifically restructure the production team, the company would become insolvent by February 2023.
Nothing was done, and by February 2023 I believed the company was being run so poorly that it was no longer solvent. And I knew the Directors were providing fraudulent numbers to investors and the bank about future projections. I had no choice but to either stand down as a Director or continue to trade a company that I believed was insolvent (a crime).
I left completely as a Director and ceased all involvement in February 2023. I started the process of working with the Directors to be released from the Judo Guarantee.
Judo made the suggestion that I hand back all of my shares for $1 and Tony take on a smaller guarantee, based around his level of ownership. Tony was a very minor shareholder, somewhere around 2%. I was the major shareholder with over 20%. Essentially Judo was prepared to do away with a guarantee worth millions in return for about $70,000 which I thought was very odd. But I had nothing to do with the business anymore, so it didn’t make sense for me to guarantee the debt.
In June, Petter Gleeson from Judo supplied the document to Tony to progress me being released. This was a document on Judo letterhead supplied by Judo with the purpose of “Daniel Roland Norris – Full release of personal guarantee from all facilities on account of the borrower”.
I attached it signed in June 2023 and sent it back. I followed up in late June with Tony and Eddie and did not hear back on why it wasn’t returned to me.
In September I attempted to reach out to Judo calling Peter Gleeson a number of times with no answer or return call, ultimately opting to email him.
“Hey mate was just calling to chat about this release from the personal guarantee. Back in June I was told everyone was agreeable to it if I gave up all of my shares and I signed a doc saying I was prepared to do that. I was wondering what the update on this was? I believe at the time you guys were waiting for an investment round to be completed which I believe has been completed?
I haven’t had any updates from the company since I left so I have no reason to change my position which I have held since I finished up over a year ago which is that I’m not in agreement on the current direction of the business.
I’m happy to chat on the phone or in person if that’s better.”
That email bounced back and I got 2 new contacts:
Ben Mullens & Alex Cottrell.
I forwarded the email onto Ben and didn’t hear back from anyone.
I chased Tony in October, he followed up with Judo to get the document done.
“Ultimately Black Hops formalised the arrangement later in the year with a legally binding agreement to give back my shares. In the agreement it mentions “Black Hops has agreed to release and discharge Dan from all Claims (as defined below) on the terms set out in this deed.” and it goes on to explain why the deal has come about in relation to Judo’s involvement “The Shareholder acknowledges that this clause 4 is fair and reasonable in the circumstances of:
(a) Judo Bank proposing to release and discharge Dan from the Guarantee; and
(b) Black Hops releasing and discharging Dan from all Claims in accordance with clause 2.”
I forwarded this onto Jesse from Judo to make sure they got it, although Tony had said he was in contact with Judo.
In March 2024 I tried again to get in contact with Peter Gleeson at Judo, once again offering to speak with him.
“G’day Peter, how’s things? I just wanted to follow up on this personal guarantee. I have signed everything with Black Hops and I’m no longer a shareholder – essentially giving up all of my shares. Can you please confirm there’s nothing else required for me to be out of the personal Guarantee with Judo? I’m not sure if there is a final step with you guys.”
He gave me a vague, odd response that was a bit concerning.
“Hi Dan – good to hear from you and hope all is going well.
Thanks for the follow up with regards to the overall process/requirements etc. with regards to your request for Judo to release your Personal Guarantee. At this stage we are still in discussion with all relevant parties at Black Hops regarding this, amongst other things.
Hope to have more of a response to you in the next couple of weeks, in the meantime should you have any queries or concerns please do not hesitate to call.”
I replied again a few days later offering to speak with him about the financials.
“For what it’s worth I’d be more than happy to chat to you about anything that happened in the past, either in person or on the phone. I ran the company for 6 years and I believe I understood the finances better than anyone else there. I was always open and honest with you guys and will continue to be. Let me know if that would be useful, otherwise I’ll just wait to hear from you. ”
He did not reply. It very much felt like the end was close and he was in on whatever plan was going to happen – in hindsight the plan was clearly to leave the guarantee with me and come after me years down the track for it.
In April 2024 the company went into Voluntary Administration. I had no contact from Judo.
Ultimately when the liquidation was finalised Judo took a deal that only got them half of what they were owed, leaving them the ability to come after me and Eddie for the rest. Again no one at Judo spoke to me. The media reports at the time indicated that Judo would take the hit on the remainder of the loan, stating “However, the liquidators say they “do not anticipate any additional asset recoveries subject to Judo Bank’s security”.”
Related: Business News Australia: Liquidators reveal Black Hops Brewing sold for $3.2m, leaving Judo Bank $1.7m in the hole
A few months ago, more than 2.5 years after I stood down as CEO, someone rocked up at my house with the legal letter from Judo, coming after me for $1.9m.
At the same time the landlord for one of the Black Hops sites (AWOL) sent legal demands to me for rent arrears and ‘make good’ on the lease that the Administrators cancelled.
I organised a loan with ANZ to pay back the AWOL lease and make an offer to Judo to settle. I got the maximum I could afford, which was obviously nowhere near the $1.9m they were chasing. Judo rejected the offer.
I still planned to settle the AWOL debt because it would at least mean we could keep our house for now while we worked out the Judo situation. But on the final day before being approved, ANZ reported that Judo had taken out a caveat on my property stopping me from getting a loan. That meant I couldn’t settle the AWOL debt, leaving the only option to sell our family home to pay it back.
I believe any reasonable person would see all of this and think it’s extremely unreasonable for Judo to now be coming after me many years down the track. And worse still, that Judo at some point had worked with the Black Hops Directors Eddie and Tony to plan out the ending in this way.
In addition, the SME loan scheme loans taken during that period prohibited banks from going after a person’s primary place of residence. They were aware I was trying to get finance to pay back the AWOL loan and they blocked it forcing me to lose my house.
I am now looking at bankruptcy options.
Eddie, the other founding Director still works at Black Hops.
Heartbreaking doesn’t come close to what we are feeling, after already losing my last house because of the Black Hops situation.
When we told our youngest, she tried to rip the for sale sign out of the ground.
I’m told by finance experts that not all banks act like this in situations like this. Judo Bank’s actions are disgusting and exemplify everything that everyone hates about banks.
Congratulations to the executives at Judo Bank for meeting their KPIs this month. Our house is going to auction on Monday and we are looking for rentals. Thanks Judo Bank.
