Consolidated Rail Leasing

Many thanks

(Please do not over analyse this as I am typing from memory having met him a few times)

So he's not related to you then?

So he's not related to you then?

Graham, not he is not.  But I appreciate and can see Ray's talents and he is talented.

Regards
Brian

Ray is indeed a talented man. Downfall was running a business, trying to still be an engineman and not listening to advice early in the piece to allow outside investment in El Zorro. Not to mention trying to be everyone's mate.
It is a shame that this company went this way,because at one stage they had the big players worried.

Ray is indeed a talented man. Downfall was running a business, trying to still be an engineman and not listening to advice early in the piece to allow outside investment in El Zorro. Not to mention trying to be everyone's mate.
It is a shame that this company went this way,because at one stage they had the big players worried.

I am not sure that was the problem.  He is extremely talented but in my view lacked a sensible approach to governance and did not seek professional assistance in enough detail to ensure contracts where "viable" prior to signing.

He understands the industry well but needed the right people around him.  I don't believe he EVER needed outside investment.  He needed some smarter financial advice.

Maybe not.

But when well respected management  team offer advice and point you in a direction that will involve massive cash flow to a business that will minimize debt in the early stages it pays to listen.

I might just get back in my box and say nothing.

He may be talented, but at what?  ( I don't know the bloke. )

I don't think losing 14.5 million dollars in 3 years smacks of talent.

Setting aside recent events with El Zorro, I’d like to concentrate on areas that nobody has commented on to date.  

I started in the rail industry in 1979, and have worked in several depots, and for several operators. My last job was with El Zorro in Parkes, where I started my railway career, so the wheel has truly turned full circle. Some on this site have taken great delight in putting down El Zorro and Ray Evans & their employees since day one, but then I've seen the same with LVRF/IRA, so it’s always seemed to me to be fashionable to have a crack at the smaller operators trying to have a go. I don’t know Ray Evans, but I’ll say one thing- El Zorro as a company have provided long term work for hundreds of people, myself included and out of all the operators I have worked for in my career, they were by far the best and fairest to work for.

The next point I would like to address concerns the claims that El Zorro workers are receiving preferential treatment in re-employment with other operators. I can assure you that there are many former El Zorro drivers still out of work, again myself included. At last check NOBODY from Parkes & Dubbo depots had gained new employment, though no doubt that will change, so that’s 8 full time and at least 1 casual positions for a start- which effectively puts that ill-founded rumour to bed. I am sure that the same applies at Junee and probably Carrington depots as well.

If you listen to some on here El Zorro as a company was the anti-christ personified- well I've worked for the PTC, SRA, Freightcorp, PN, Lachlan Valley Railfreight, Silverton, ARG, Independent Rail, and lastly El Zorro- all companies have had their good and bad points, and some could be dead set bastards, but in respect to El Zorro I’ve never worked for a fairer employer. A pity people on here who have been critical don't know about things such as the employees who were unfortunate enough to be struck down with chronic medical conditions, life threatening disease or family tradgies that have been supported by EL Zorro while they recovered, where other companies have shafted their employees in similar situations- something I am very well aware of as one of those people concerned, and I’ll say here and now that this was far and above what El Zorro had a legal obligation to do, and for that I thank them.

OK, so I'm now owed some pay and entitlements, but without El Zorro where would I have been? I would not have had nearly 4 years of stable employment after being shafted along with all of its employees by another well-known operator when they walked away from NSW- don’t remember to much hue and cry about that. At best I would have been forced to move to Sydney, Newcastle OR Inner Harbour and uproot my family (again) and let me tell you that alone has been a huge thing. I’ve been there done that (Twice) with ARG. In the long term I believe by working for El Zorro I came out very much the winner, and am miles in front so I say whatever faults they may have had I truly believe that they had the best interests of their employees at heart in trying to battle on and keep us in employment.

I’ll end by saying there is a lot that has not come out in the wash-YET and just possibly when it does come out a few of you on here may be a little more charitable.

I’ll end by saying there is a lot that has not come out in the wash-YET and just possibly when it does come out a few of you on here may be a little more charitable.

What has come out in the wash is that El Zorro lost a huge amount of money over three years, and owes millions.  

I'm glad you're happy with the position, but creditors who are owed millions are not. There may well be people losing jobs from among the creditors - thought about them?
I can't see them feeling all that charitable.

Maybe not.

But when well respected management  team offer advice and point you in a direction that will involve massive cash flow to a business that will minimize debt in the early stages it pays to listen.

I might just get back in my box and say nothing.

Perhaps we should compare notes.

As a person who has built a business from scratch I can tell you it is not easy and not for the faint hearted.  Ray Evans did a brilliant job to get the company off the ground and to build the business.  He was talented at building a business and also at obtaining business.  Where he let himself down was what he did next or didn't do rather.  

I was lucky enough to meet with him several times and we talked about ideas and what could be achieved.  IMHO there were people around him who let him down and they know who they are.

Setting aside recent events with El Zorro, I’d like to concentrate on areas that nobody has commented on to date.  

I started in the rail industry in 1979, and have worked in several depots, and for several operators. My last job was with El Zorro in Parkes, where I started my railway career, so the wheel has truly turned full circle. Some on this site have taken great delight in putting down El Zorro and Ray Evans & their employees since day one, but then I've seen the same with LVRF/IRA, so it’s always seemed to me to be fashionable to have a crack at the smaller operators trying to have a go. I don’t know Ray Evans, but I’ll say one thing- El Zorro as a company have provided long term work for hundreds of people, myself included and out of all the operators I have worked for in my career, they were by far the best and fairest to work for.

Exceptionally well written post in general.

I too have noticed a tendancy to attack the smaller operators and calling them "dodgy brothers" and other unflattering nicknames, which are less than fair - as Brian says, building a business up from nothing to be something is a very big ask, especially when one enters the small market of rail freight with high capital expenditure (locos, wagons, etc). People are quick to comment on the use of older locos (especially in the early days of open access, this is what gave most, heck, all of the operators a break, because they bought the locos for a song), and a lack of uniforms, maintenance etc  - I see it as a company trying to stretch the dollar as far as they can. Sometimes it backfires, with loco failures and the like, but then again, they're not alone - the big companies still fail on the mainline with modern, brand new horses.

The next point I would like to address concerns the claims that El Zorro workers are receiving preferential treatment in re-employment with other operators. I can assure you that there are many former El Zorro drivers still out of work, again myself included.

Sadly, I'm sure this will make some people happy - it shouldn't.

[...] all companies have had their good and bad points, and some could be dead set bastards, but in respect to El Zorro I’ve never worked for a fairer employer. A pity people on here who have been critical don't know about things such as the employees who were unfortunate enough to be struck down with chronic medical conditions, life threatening disease or family tradgies that have been supported by EL Zorro while they recovered, where other companies have shafted their employees in similar situations- something I am very well aware of as one of those people concerned, and I’ll say here and now that this was far and above what El Zorro had a legal obligation to do, and for that I thank them. OK, so I'm now owed some pay and entitlements, but without El Zorro where would I have been?

Thankyou very much for taking the time to write this personal and positive view.

As usual, we get too caught up in "this heritage unit is worn out" and "that train is no longer running", and people constantly forget the human factor. At the end of the day, you're the guys left holding the bag, and I don't hesitate in suggesting that a lot of those here, both in and out of the industry wish you the best.

Thanks again for the interesting read.

What an incredible extreme of opinions from across the spectrum of all those who are affected. Thank you for all of those of you who have posted on this thread.
No media, radio or newspaper or 'shock-jock' could have provided the insight that I have gleaned from those who have posted to this thread in an honest and definite way. ALL of you, and I mean that!
This has been a great Australian (rail) business tragedy and I feel for everyone who has been affected, with the pain to be felt by many for some time to come.

We may be just railway gunzels as when follow all these threads on RP, but at the bottom of it all we are people with souls and sympathetic hearts when we encounter such a business downfall as this. None of us want to see anyone out of a job in this, the rail industry we are trying to promote, not at business level and not at employee level.
Is there anything, we the RP reader could do to help?

I am not sure that was the problem.  He is extremely talented but in my view lacked a sensible approach to governance and did not seek professional assistance in enough detail to ensure contracts where "viable" prior to signing.

He understands the industry well but needed the right people around him.  I don't believe he EVER needed outside investment.  He needed some smarter financial advice.

Earlier post by Brian,

Ray has a well established history in the industry.  He was a driver for many years and move into Great Northern which eventually had issues. He then started El Zorro and the business took off. I have met with Ray several times and my view is he is a game changing person.  He is very knowledgeable and can inspire others. He is a worth entrepreneur. What he is not is a CEO or MD.  He also could not delegate.

He suffered from poor advice. The way he contracted AWB for one.  Given the opportunity I would work with Ray but he needs to understand what his strengths and weaknesses are.  This might help him with some internal reflection.


Brian,

So if Mr Evans hasn't got managerial, financial or leadership/supervisory skills and is apparently too arrogant or scared to seek out or accept sound advice, what you are saying is that he is a visionary, not an entrepreneur. A good employee/silent partner, working in the right area of business development, but as you say not an MD or CEO. As for internal self reflection, losing somewhere in the order of 20 million? I am sure there are many former employees who would hope he ends up in jail and self reflect there! From the apparent losses the company should have been wound up three or four years ago. I wonder what his bank manager and solicitor were doing over the years.

I agree the industry needs small nimble players like eZ but sheesh. Dudding groups like the SRHC is also there own fault, as mentioned they should have pulled the loco's on lease, but were obviously blinded by the potential income and probably friendship.


Cheers,
Hendo

What has come out in the wash is that El Zorro lost a huge amount of money over three years, and owes millions.  

I'm glad you're happy with the position, but creditors who are owed millions are not. There may well be people losing jobs from among the creditors - thought about them?
I can't see them feeling all that charitable.

If you’ve been personally stung then you have my heartfelt sympathy, I’ve been through it a few times now, so I try to look at the positives as well as the negatives- because if you just look at the negatives it will eat you up.

I wrote what I wrote because I wanted to show the human side of the company and highlight the fact that a lot of employees were given a very fair go by El Zorro, and hundreds of people have made a living from El Zorro over the past years that otherwise would not have occurred. I also know that a lot of the major creditors have made a smeg load of money out of El Zorro- yes they are owed a lot of money now but you have to consider how much did they also take over the years? (it was a lot)

I have intimate 1^st hand knowledge & experience of both the loco hire business and private railway operation from the management side, so am privy to a lot of sensitive information, fees and charges, and am more than aware of matters such as outlined above. I also have several good friends and relatives who’s rail businesses have been hugely impacted by El Zorro’s demise, so I am well aware of the impact it’s been having on them as well.

When all is said and done, most of the major creditors are a lot bigger concerns that El Zorro was, so can probably afford to take the hit- NOT that I am condoning in any way shape or form the fact that they should not be paid. But I’m looking at it from the other side as well. In the case of the major players, they & they alone allowed the situation to continue so there has to be a lot of accountability there.
If you take just two examples, and I’m not defending El Zorro as it routinely happens to all of the smaller operators- As an engineman I got to see all to often just how many times a particular engine/s would fail from a major creditor- the net resulting being a huge financial hit to the hirer, and seemingly no responsibility from the owner. Or the operator being routinely stuffed about from pillar to post by various controls, (again major creditors) through no fault of their own, again causing them immense on costs in extra crews, overtime, motel accommodation, taxi hire etc. As I said this applies to not only El Zorro but all of the smaller operators and places a huge financial burden on them, and there are no ifs but or maybes about it, this has had a massive impact on profitability that the smaller operators simply cannot afford in the long term.

I am also aware that some of the heritage rail operators have been badly stung, one of whom gets a regular airing on RP about its management problems, and again surely, it was their management or rather mismanagement that has allowed the situation to come about in the first place? Hiring out of heritage assets has never sat well with me, particularly those either donated or sold at less than market rates by their original owners. I have also seen over the years firsthand how many friendships it has destroyed, and the turmoil it creates when invariably you get those with big ideas from the heritage side that want to mix it with the big boys, and generally it ends badly from what I’ve seen, and we are seeing now. But that’s what you get when well-intentioned but from an railway operational viewpoint extremely naïve people get in on the act no doubt thinking that this will be the salvation of their particular railway/museum- it generally doesn’t work.

Anyway I’ve said far too much, and didn’t really want to get involved debating the pros & cons, so I’ll refrain from any further comment.

Anyway I’ve said far too much, and didn’t really want to get involved debating the pros & cons, so I’ll refrain from any further comment.

Not at all, thanks for the read. Interesting to see these view points. I'm just sorry for all the crews and hope they can get back on their feet quickly.

I just have to sit back and laugh at some of the comments in this thread which are either misinformed or misguided.

Firstly to all the El Zorro employees, I have worked with the majority of you and enjoyed every minute of it. The loyalty and professionalism was amongst the best I have experienced in my 25 years in the freight industry.

Secondly anyone who thinks Ray Evans is some kind of genius is sadly mistaken. He was given plenty of sound commercial advice on contracts, corporate governance and financial matters. The fact is it he would never listen or take it on board. It was either Ray's way or see you later. The business grew fast and sadly in my humble opinion Ray was well out of his depth when it came to running commercial private business.

El Zorro had the opportunity to be something great, sadly this opportunity has been lost.

More news and confirmation of last week's meeting......

CREDITORS of EL Zorro Transport are believed to be owed well in excess of $10 million.
The rail company closed its doors early last month and was placed in external administration by El Zorro Transport director Ray Evans on June 14.

A creditors meeting was held in Melbourne last week, with the appointment of the administrator a central issue.

Reports from the meeting indicate Cargill is owed more than $6 million – with counter claims by El Zorro against the grain trader – Victorian Government rail authorities owed more than $3 million, Chicago Freight Car Leasing Australia about $2 million, former employees $1.4 million and the Seymour  Rail Heritage Centre more than $1 million.

One former employee, who did not wish to be named, said a string of country motels were owed an average of about $5000.

She said the list of creditors was "pages and pages and pages''.

She said some employees had not been paid for the last four weeks of their employment, time off in lieu, redundancy and annual leave, with claims as high as $90,000.

A spokesman for the Department of Transport, Planning and Local Infrastructure confirmed government rail authorities were owed money by El Zorro Transport but said it was commercial in confidence.

Cargill spokesman Peter McBride told Weekly Times Nowthe grain company was owed $6.9 million through direct debt owed by El Zorro and leases for rail wagons Cargill had taken out with a third party – believed to be the Commonwealth Bank of Australia.

"Cargill is disappointed with the way the meeting was conducted and the way the administrator adjudicated Cargill's claims,'' Mr McBride said.

"We are currently seeking legal advice regarding what options are open to Cargill as a result of the issues which arose out of the meeting.''

Creditors were told by the administrator El Zorro Transport made a $3.5 million loss in 2010, a $6.5 million loss in 2011 and $6.5 million last financial year.

Last Friday, Mr Evans appointed liquidators Con Kokkinos and Matthew Jess, of Worrells, to wind up related company Regional Port Enterprizes Pty Ltd.

A creditors' meeting has been called for next Tuesday to consider winding up the company.

RPE has debts of nearly $2.8 million, including $1.77 million owed to the Australian Taxation Office, about $223,000 to El Zorro Transport and $89,000 owed to  Mr Evans.

Another company, RLG Pty Ltd, of which Mr Evans is co-director and part owner, is owed about $23,000.

The large majority of the creditors are former employees.

Australian Securities and Investment Commission documents show Regional Port Enterprizes (Aust) Pty Ltd and Railway Employment Co. Pty Ltd were set up on April 30 in the name of Mr Evans’ sister Pamela Lopez.

Mr Evans told Weekly Times Now a month ago if he had his time over again, he would run a rail operation as two separate companies – one for trading and the other to hold rail accreditation from Transport Safety Victoria.

Transport Safety Victoria said El Zorro Transport had advised the rail authority it would discontinue its rail operations in Victoria.

Weekly Times Now understands either Regional Port Enterprizes (Aust) Pty Ltd or Railway Employment Co. Pty Ltd has applied for rail accredition.

http://www.weeklytimesnow.com.au/article/2013/07/02/575479_grain-and-hay.html

It always fascinates me to see creditors allowing their debtors to run up huge bills, yet continuing to trade with them. . . the ultimate wish for the pot of gold at the end of the rainbow.
Unfortunately, it's a never-ending rainbow.

If the two new entities named do receive accreditation, anyone who trades immediately on credit terms with either will need his head examined. Sensible business practice has new clients on a cash basis until their bona fides are well established.

And what's this nonsense about the debt to the Department being "commercial in confidence? Would somebody please tell the Department's hierarchy that this money is owed to us - the poor benighted taxpayers.

It always fascinates me to see creditors allowing their debtors to run up huge bills, yet continuing to trade with them. . . the ultimate wish for the pot of gold at the end of the rainbow.
Unfortunately, it's a never-ending rainbow.

If the two new entities named do receive accreditation, anyone who trades immediately on credit terms with either will need his head examined. Sensible business practice has new clients on a cash basis until their bona fides are well established.

And what's this nonsense about the debt to the Department being "commercial in confidence? Would somebody please tell the Department's hierarchy that this money is owed to us - the poor benighted taxpayers.

It will be interesting to see how long the directors El Zorro allowed the company to trade in this parlous financial state as it is possible that it may have been trading whilst insolvent. If this turns out to be the case then ASIC could take appropriate action. Have the directors been involved in any other insolvent companies? I think any sympathy for El Zorro is really misplaced.

I have had dealings with ASIC over a period of time on this and other issues and can say they are completely useless.  ASIC is a national embarrassment in this country and could not be relied upon (based on my experience with them) to do anything in the best interests of creditors or shareholders.

The issue with El Zorro really (in my years of board experience) comes down to the Directors forming their own view with regard to solvency.  Was a solvency resolution filed annually with ASIC is another question I have.

The Corporations Act requires directors to prevent insolvent trading pursuant to s588G which states amongst other things:

A director has a positive duty to prevent insolvent trading under s588G of the Corporations Act 2001 (Corporations Act).

Did the Directors take a positive approach to ensuring the company was or did not trade insolvently??

Section 588G requires a director of a company to prevent the company from incurring a debt if:

(a) the company is already insolvent at the time the debt is incurred; or
(b) by incurring that debt, or by incurring a range of debts including that debt, the company becomes insolvent, and, at the time of incurring the debt, there are reasonable grounds for suspecting that the company is already insolvent, or would become insolvent by incurring the debt: s588G(1).

A potential critical point in this case (IMHO) is:

A director must ensure proper financial records are kept by the company and take reasonable steps to remain properly and fully informed about the financial affairs of the company at all times so that they can reasonably form a view about:

(a) the company’s present financial viability; and
(b) the impact of incurring any further debts.

Did this happen?  What were the records like?  If the records were kept up to date then how could a Director NOT know the company was insolvent?


This document sums it up nicely. http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg217-29July2010.pdf/$file/rg217-29July2010.pdf

Regards
Brian

I have had dealings with ASIC over a period of time on this and other issues and can say they are completely useless.  ASIC is a national embarrassment in this country and could not be relied upon (based on my experience with them) to do anything in the best interests of creditors or shareholders.

The issue with El Zorro really (in my years of board experience) comes down to the Directors forming their own view with regard to solvency.  Was a solvency resolution filed annually with ASIC is another question I have.

The Corporations Act requires directors to prevent insolvent trading pursuant to s588G which states amongst other things:



Did the Directors take a positive approach to ensuring the company was or did not trade insolvently??


A potential critical point in this case (IMHO) is:

A director must ensure proper financial records are kept by the company and take reasonable steps to remain properly and fully informed about the financial affairs of the company at all times so that they can reasonably form a view about:

(a) the company’s present financial viability; and
(b) the impact of incurring any further debts.

Did this happen?  What were the records like?  If the records were kept up to date then how could a Director NOT know the company was insolvent?


This document sums it up nicely. http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg217-29July2010.pdf/$file/rg217-29July2010.pdf

Regards
Brian

No need to tell me how bad ASIC is as I worked for them and the its predecessors (CACNSW) from 1981 to 2008 inc. I did say 'could'. ASIC tend to take the view of caveat emptor in regard to creditors and unless fraud has taken place tend to leave to the parties to work it out. I was totally opposed to this approach but the trouble is ASIC is badly under resourced and cannot possibly chase up every case of corporate misfeasance.


*mod edit to fix formatting - JGS*

Well it looks like the people that didnt want heritage engines running trains have got there wish. So now what happens to them engines lay in a sideing like the clps at Ettamogah or a last trip to Sims

Well it looks like the people that didnt want heritage engines running trains have got there wish. So now what happens to them engines lay in a sideing like the clps at Ettamogah or a last trip to Sims

You, sir, are 100 percent wrong.

We do want heritage engines running, but on heritage trains - the very reason for their preservation.

Well it looks like the people that didnt want heritage engines running trains have got there wish. So now what happens to them engines lay in a sideing like the clps at Ettamogah or a last trip to Sims

What on earth has the CLPs in Ettomogah got to do with El Zorro and the disuse of heritage locos?

The CLPs are laid up by Aurizon who have taken delivery of new locos. They were never "heritage" locos, just workhorses.

You, sir, are 100 percent wrong.

We do want heritage engines running, but on heritage trains - the very reason for their preservation.

How many heritage engines do you need to run heritage trains and who is going to pay for there up keep. The engines at Ettamgah may not be heritage engines but there sitting there with no work and theres plenty more around.