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Eight GEOS Australia Schools in 'Voluntary Administration'

Add this to the list of GEOS's woes: voluntary administration.

Eight English language schools operated in Australia by the GEOS group have gone into voluntary administration, leaving about 2300 foreign students unsure of their future.

Justin Walsh and Adam Nikitins of Ernst & Young have been appointed administrators to nine companies operating the schools in Melbourne, Sydney, Adelaide, Perth, Brisbane, Gold Coast and Cairns.

They have about 390 employees and international students from a number of different countries.

"The financial position of the companies is such that the directors appointed voluntary administrators," Mr Walsh and Mr Nikitins said in a statement on Friday.

"School operations have been temporarily suspended while the financial situation of the companies and ability to fund future operations of the schools is assessed over the next few days."

Voluntary administration is like Chapter 11 in the United States or corporate rehabilitation in Japan. In other words, they are effectively bankrupt. The eight schools affected are: GEOS Melbourne Pty Ltd, GEOS Adelaide Pty Ltd, GEOS Sydney Pty Ltd, GEOS Cairns Pty Ltd, GEOS Gold Coast Pty Ltd, GEOS Perth Pty Ltd, GEOS Brisbane Pty Ltd, GEOS Management Services Pty Ltd, and GEOS National English Academy Pty Ltd.

The administrators said a better understanding of the financial situation and a decision on future operations should be known by the close of business on February 1.

"Employees, students and creditors will be advised as soon as possible," they said.

It will be interesting to see what the administrators learn about GEOS's financial situation. It has been suggested in previous posts on GEOS that the company has had to rely on transfers from overseas schools in order to pay its staff in Japan. Is business so bad that they've drained their schools in Australia dry? So much for rumours about the company's health; now we know it's not good.

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Comments

The GEOS NZ accounts are giving us some idea of the internal finances of English language schools operating in this region. If we look at GEOS NZ for the year ending June 2008, in rounded figures their stated income was $6.1 million and they reported $3.3 million outgoing on salary and wages. So, like it or not, half of the NZ company's money stream is reported as flowing out to its workers.

what a waste of time that'll be

@ 20:23

I didn't realise you had access to my financials. I assume you must, of course, because otherwise you are talking out of your arse and will look even more stupid. Look, the market to a large part defines the price of a product, and the inputs into promotion and delivery. With marginal room for variation, that's the reality. How absurd to imagine a unilateral increase in price or decrease in commission And, as I said, I pay my staff the Award wage, which was negotiated between industry bodies and unions. I also have about 20 qualified applicants for each teaching position I fill and have almost zero turnover in teaching staff, so I am clearly doing something right.

I honestly think you must be retarded in some way. I can't put this in a simpler way for you: the ENTIRE ELT INDUSTRY outside of Japan is based on agents showing students different schools, comparing prices and getting commission for doing so. Schools that are able to offer students a product at a price they want to pay (and grease the palms of the agents that bring them to the school) will survive, the deluded fantasists that want to charge significantly more than everyone else and not give a cent to an agent will be out of business in a month.

School Owner and Yohoho are a tag team.
Again, charge the price so that you can run the business with out whinging about there not being enough money at the end of the month because you have discounted the price too much.
I uderstand that you need agents but if you can not offer the product to students in Australia to cover your costs then students might need to start going to a country where prices suit their budget. such as the Phillipines, New Zealand (,which isnt that much cheaper.)

If the price of the product is to be slaughterd to the point where there is no point,then there is no point.
Get my point.

Remember though that GEOS wouldn't have been offering a product that didn't cover their costs if it weren't for the demands of GEOS Japan. They were effectively supporting themselves plus more again, during a relatively tough time in the industry. A good analogy would be the mob demanding protection money from businesses in Chicago during the great depession.

I strongly also strongly suspct that they knew the end was coming but used high commissions and low costs as a way of maximising the amount of cash they could take out of the country before everything fell over. They never thought for a second that they'd actually have to provide the product at that pricepoint.

http://search.knowledgecommunication.jp/kuchikomi/s1050/p2/#14303

Some feedback seems to be trickling out from the Japanese. Some of those concerned are being lied to by the people answering the phones at corporate.

@22.07 When I want business advice, I will ask for it, thanks. And I can assure you that I will ask for it from someone who has at least half a clue about how things work, rather than a frustrated ex-teacher scratching a meagre living in Japan or whatever.

the ENTIRE ELT INDUSTRY outside of Japan is based on agents showing students different schools

That should read "the ELT industry in English-speaking countries". In non-native speaking countries, they don't really need agents.

Yes, I think you're right. Sorry, my typo.

There are a few fairly good exceptions though. Malta and the Phillippines (which I've already mentioned) for example, where schools operate in a very similar way to schools in a native-speaking country. I have no idea about agents and enrolments in Spain, France, Italy though and would be quite interested to know just where they get their enrolments from.

School Owner, If you get this upset and defensive on a website that your only defence is to belittle, name call and try to convince yourself that your opinion is the only correct opinion, I wonder what you are like in person. Your staff must all toe the line in fear your temper and the consequences when your opinions are questioned.
Come to think of it, it reminds me of Kuzunoki. Do you also make 1 hour videos?

You can not dictate to people what is written on this website and people will have different opinions about the industry. Maybe not the same as yours.

Have you to been privy to one of his one hour rants?, "control tower damaged", well said that man.

It's sad that this situation may also affect your school too, however, your comments are quite simply wrong, I don't know where you get your facts from but I can assure you that your percentages are way off the mark. I also find it surprising that someone not privy to any financials can make such wild and inaccurate claims, I pity your need to be so defense. Good luck with your school...

Which post is does this comment relate to?

@11.35

Is it defensive to say that I don't value your opinion, and, from the evidence here, I believe that you don't have a clue what you are talking about? If so, then I guess I'm defensive. Or perhaps, right.

Another rant from the School Owner asking himself questions that no one bothers to answer.

Except for our Anonymous friend, who just can't keep himself away.

In NZ, all student fees are in a trust fund and paid back to the school fortnightly (I think) as they 'use' the pre-paid weeks. It guards against unscrupulous managers running off with money, and against bankruptcy leaving students out of pocket. I don’t think Oz has this

I'm prepared to stand corrected on this one, but it's my understanding that some kind of trust account exists in Aust too. I have no idea how this is administered or monitored but it's clearly a flawed system. I believe that St Mark's account should have had a sum around $2.4million but on the Final Friday had closer to $150 000. It beggars belief that it should be possible for this to happen to a 'trust account'.

Re: school owner. Regardless of your business acumen or your own expertise, I do feel you could demonstrate a tad more respect for the teachers around you. Given your deficiencies in interpersonal skills I'd say they provide a skills set that you can't...

@23.17

There is no trust fund requirement in Australia. There used to be, for student visa holders, but it was phased out years ago. I agree that this is an issue.

PS to your PS - I respect my teachers very much. They are professional and do their jobs well. I just don't respect this online jerk who feels that he can comment on issues that are clearly far beyond his understanding.

I've been hearing about how the GEOS NZ staff are viewing the GEOS Australia demise.
With worry.

Consumer confidence not good. On Thursday evening GEOS NZ was, I am told, near collapse, with agencies trying to pull students out and all sorts of things going on. Luckily all student fees here are in a trust fund, and released to the schools as revenue as the pre-paid weeks are used up.

On Friday, someone senior in GEOS Chistchurch bought the three GEOS NZ schools. So it looks like they'll continue operating, with most of the students, and not sending profits off to Japan...but all staff are worried and students are confused.

Even so, one local branch is set to merge Elementary and Pre-Int clsasses from the end of this coming week, so that doesn't bode well...

School owner, i've had to endure your ranting and raving for some time now, but I must say that you simply have no idea what you're talking about, it would be better for all if you simply said nothing, 'cause all you seem to be doing is spreading lies to creating further unstability or just doing it for you own morbid entertainment. Please just enjoy your school and leave your rants for your staff.

So, I am to believe that this new owner has taken on the debt of the New Zealand schools, including the money that is owed to the geos arms in Australia. It would be a highly optimistic and foolish individual to take on such a liability, i find that very hard to believe.

I am not privvy to those details.
I am aware that sme profits from Oz were used to support some of the NZ operations at times, but I don't know if that was a direct loan or came through Japan (so technically, they owe Japan)

But without having to send profits overseas, and with schools now established (I think the financial help was during set-up some years ago), they should be profitable...if recent events have not destroyed consumer confidence.

And they were owed back another 3.3 million from GEOS related entities!

All the proof is in the documents. Hey have you guys got the 124k when the administrators ask - or will they lodge a letter of demand? should be good viewing.

You are well behind the times. Look at the new GEOS thread to see now GEOS NZ doesn't exist.

Now don't worry too much about the unsecured creditors of these GEOS entities. and chasing money from NZ. Nix they expect and nix they will get. Now let's think about the professional remuneration EY, the administrators, are going to rightly charge and rightly pursue. For Sydney GEOS this has been suggested to be capped at about $250,00 Multiply by 8 schools and,woopsie doo, we've got about $2 mil. (Course there might be a bit of a charge for GMS and the Holding Company, but what the heck - lets round it off at $2 mil.) Wonder where that is going to come from?

How the tittle say who pay or have legal responsibility for this move at GEOS Australia, Seeing the bureau carried with the 80% for not say the 100% ,, is Amazing how a collapse of that magnitude and nobody for part of Geos International say nothing only bankruptcy and so laugh at the people.

I think this not should be so, someone should to page besides of Students, Teachers and the Bureau.

That's the beauty of a pty ltd comapny. Limited liability is what it said in the name and limited liability is what it means. Unless a comapny director/s/owner engages in illegal activity (eg trading while insolvent) or is stupid enough to link personal assets to the company/company loans, pty ltd means just that. On the positive side, pty companies encourage entrepreneurs and business start up that would otherwise not happen. So, be careful, it's a rough but sometimes rewarding business world out there.

Unfortunately this person has limited skills in writen and spoken English which was not realised until after the contract was Manager was signed. Her reputation and so called experience at GEOS seems to be very questionable and as you said, 'competency was never a requirement'. Knowing all about the business was her shoe in to our school, and the high commissions for the agents seems to be her forte. How can we get rid of this rude, unqualified person? Just sits at the desk and yells out orders to everyone - any ideas?

Where exactly is she?

Shouting out nonsense and doing everything ass-backwards is the GEOS way, didn't you know? I would never hire a GEOS manager. Simply the lowest rung on the ladder, and maybe some are not even on the ladder to begin with.

So...mmmmmmm.....so, we're talking here about a woman...an ex-GEOS woman manager...with limited English...mmmmm, a woman, ex-GEOS manager with limited English skills..who shouts a lot......mmmmmmmm......now, I wonder which one that could be. G'uz a clue c'm on. . Maybe, maybe.......Korean??????
Close?

OMG, she sounds ghastly! I think someone should kick her in the cunt, and be done with it! Be gone, ex GEOS whore, be GONE with YOU !

Same ex-Aussie GEOS manager that made her way to Canada...only to be kicked out of here, too?

Found this on another thread, but thought it would be interesting...

Some updates about GEOS NA:

- only one school in Canada made a profit in June and July....small one.
- GEOS Ottawa is targeting $120,000 profit this year...Except there second-best month this year was under $10K...Winter slow season still to come.
- Average school needs $7,000+ per DAY to make their cash targets. yup.
- Yes, all that Saudi money is their main target. Over 50% of students in some schools ("EAST team", yippee!) over 50% Saudi. Yee-hah! Except it is now starting to drain management time with ever-changing demand, etc. from SACB. Hence PATHWAYS.
- The infamous Uri Carnat will make a major announcement come the fall.

Stay tuned as I offer more when it is appropriate.

One a me mates is teaching in med at a uni in Ottawa with some Arab students and he was telling me on the net last night that he hears the buzz that GEOS there had about 70 new students last month and that almost 40 were from the Middle East and that other students are getting pissed off with the change in the feel of the school.
Back to Oz, anyone seen any GEOS Group Certificates yet for our tax returns? Or is that yet another GEOS **ck-up?

They did not have 70 new students, although short student group visits are common, so that might have bumped the number temporarily......More likely

HOWEVER, the Saudi student influx and percentage is right on target. This is also happening in Montreal, and students are not happy. Heard of at least a few who were changing schools because of it. At least one had ALL Saudi students except her in class! Not a good trend for "multicultural learning and experience" they try to promote and students expect while studying in Canada.

Ottawa GEOS advertising last week for Arabic speaking Office Receptionist.

Anybody Ozzies got their Group Certificates from the GEOS administrators yet???? Are they going to happen????

What are "group certificates"?

Umima is "sick" and off work. Go figure. Saudi student enrollment starting to taper off, but the highest concentration. Other students leaving. Last month they will turned small (read: very small) profit, maybe. Still got to make thousands a day to do so. Uri Carnat won't be happy. Then again, Uri Carnat not making any money. Here comes slow winter season!

Did anyone notice they hired an Academic Coordinator at GEOS Montreal only to see her leave in, oh, a month? They have ANOTHER AC now. Higher turnover than WalMart. At least WalMart makes money, unline GEOS Montreal.

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