Melbourne Landscaper Dave Franklin Sued Over Alleged $2.5 Million Unpaid Loan Amidst Financial Challenges
Melbourne landscaper Dave Franklin and Jane Franklin are currently subject to a Supreme Court lawsuit initiated by Bindy and David Koadlow, members of the Smorgon family. The Koadlows allege the Franklins failed to repay a $2.5 million loan, plus accrued interest, totaling $2.6 million.
This legal action follows a period of significant financial challenges for Dave Franklin, including the liquidation of multiple businesses and personal liability for substantial tax debts. A lawyer representing Dave Franklin has denied the allegations of loan default and disputed claims regarding the financial health of his businesses.
The Koadlows allege the Franklins failed to repay a $2.5 million loan, plus accrued interest, totaling $2.6 million.
Supreme Court Lawsuit Details
The Koadlows, through their family investment company Binvid, filed legal proceedings earlier this month. They claim Binvid lent the Franklins $2.5 million in March of the previous year for a 12-month period. The Koadlows assert that monthly interest payments were not properly fulfilled and are seeking the return of the principal amount and accrued interest.
The loan is registered as the sole mortgage on the Franklins' Black Rock home, which was purchased in Jane Franklin's name for $3.3 million in March of the previous year. This property acquisition occurred approximately three weeks after one of Dave Franklin's landscaping businesses entered voluntary liquidation.
The Koadlows' claim is directed at the Franklins personally and a company managing a family trust. It does not target Franklin Group Australia or other active business entities within Franklin's landscaping, design, and pool operations.
Broader Financial Challenges
The lawsuit comes amidst a period of notable financial difficulties for Dave Franklin:
Tax Liabilities
Last year, the Australian Tax Office successfully enforced a director penalty notice against Franklin, making him personally liable for $2.4 million in unpaid tax debts across four of his companies.
Business Liquidations
Over the past 14 months, two of Franklin's businesses have entered liquidation:
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Franklin Landscape & Design: This business entered voluntary liquidation last year, with a liquidators' report indicating it was suspected of owing creditors $6.5 million at the time of its collapse. This sum included an estimated $2.3 million to the Tax Office. An alleged $3.2 million debt to the Koadlows was also initially noted in this report; however, a later creditors' meeting report indicated the Koadlows had since discharged their security over that debt and refinanced the loan, with this $3.2 million debt not being listed as enforced in subsequent reports. Liquidators also noted a preliminary review suggested the company might have been insolvent since September of the prior year, or possibly earlier.
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Franklin Design Studio: This entity was ordered into liquidation by the Federal Court last year over unpaid tax debts exceeding $250,000. Reports stated the business had been transferred to a different entity before its winding up.
Restructuring Plan Lapses
A third company, involved in pool design, appointed a restructuring practitioner; however, its restructuring plan lapsed late last year after not being fulfilled. This pool business reportedly remains operational.
Franklin's Response and Ongoing Operations
A lawyer representing Dave Franklin has stated that the allegations of failing to repay a significant loan are false. The lawyer also disputed claims that Franklin's business faces financial issues or that it may not continue as a going concern.
Franklin Group Australia, identified as the main operating company for Franklin's business, reportedly continues to build outdoor living designs.
Additionally, Dave Franklin publicly announced a prostate cancer diagnosis in June, stating that doctors hoped to have caught it at an early stage. Franklin is widely known for his appearances on the television show "The Block."