Asia Pacific News Updates

The truth behind C2 Melbourne

Amid claims of mismanagement and “unethical” business practices, former employees and suppliers say the three-day event could have gone ahead. 

Touted as a “conference like no other”, C2 Melbourne was supposed to bring the innovative C2 (Commerce + Creativity) Montreal event model to Asia Pacific. Beating off stiff competition, the Melbourne Convention Bureau excitedly won the bid to host the very first C2 event outside of Montreal. As the first instalment of C2 International, the three-day Melbourne event slated for 17-19 October, would serve as a platform to build the C2 International brand (and its creative event services) across the region.

But after much fanfare, regional and international promotion, and a failed attempt to launch the event in 2017 (this was scaled back to a one-day ‘preview’), the event was abruptly cancelled on 24 August.

The dominos began to fall when C2 International APAC CEO, Martin Enault, stepped down a week earlier (17 August), citing health reasons. Enault, who relocated to Melbourne to oversee day-to-day operations, aggressively promoted C2 Melbourne to the global business events industry with a series of marketing activations and speaking opportunities at events such as AIME (February), IMEX Frankfurt (May) and the Singapore MICE Forum (July).

Following the cancellation of the event, C2 Melbourne Pty Limited, a registered Australian company and subsidiary of C2 International, declared voluntary administration on 14 September.

So, what went wrong?

C2 International president and CEO, Richard St-Pierre previously blamed poor ticket sales and the cancellation of a government-backed event contract for the collapse of C2 Melbourne, but our investigations reveal a much darker picture.

Ron Gauci, known as a “go-to” corporate consultant for businesses in trouble, was hired as C2 Melbourne’s managing director in June (four months before the event) to address a supposed revenue shortfall.

“There were significant cost management issues,” Gauci said, “along with a lack of robust [financial] reporting.”

Despite this, Gauci claims he devised a number of investment solutions to address the cost overrun, but in the end he simply “ran out of runway” and Montreal-based directors decided to cancel the event.

“I thought we were heading down the right path, and was fairly confident the event would meet expectations,” Gauci said. “C2 is a brilliant concept with significant potential, so it’s a real pity they decided to walk away from it.”

VIDEO: Harness creative thinking to tackle event fatigue

Like Gauci, a number of event professionals previously employed by C2 Melbourne believe the event could have gone ahead.

One event producer told Biz Events Asia that even after the event budget had been slashed by AU$1.5 million, the delivery of a successful event was still feasible.

“Our [AV and venue] suppliers were still willing to help us even when we started crying poor. Like us, they were inspired by C2 and remained 100 per cent invested.”

And as for the 30+ staff working in the Melbourne office (some of whom had relocated interstate and internationally to work for C2), he said “no one saw it coming”.

He added that internal revenue issues were linked to poor business management, rather than the operational costs of the three-day conference.

Another former C2 Melbourne event producer stated on social media that he believed “it could and should have worked”. He added: “The methodology and concepts behind C2 are all very sound. Unfortunately the ability to adapt to different global markets, and commercially market the product were not.”

Yet another event professional said C2 “didn’t understand the Australian market” and focused more on tickets rather than creating a value proposition for corporate sponsorships.

According to an Administrator’s report released in October, C2 Melbourne owed more than AU$2.4 million to ‘unsecured creditors’, however Biz Events Asia believes this has since been reduced to AU$1.7 million.

C2 Montreal

Michael Petrani, CEO of Diversity Rigging, who was commissioned to build and install a number of structures for the event, including C2’s famous Sky Lab (main image), is one of the major creditors, claiming AU$117,793 in unpaid services.

“At the time of cancellation, we were still in a position to deliver the job on budget, even after budget was cut,” Petrani said.

He also claims that once the decision to cancel the event was made by C2 bosses in Montreal, all communication with suppliers was suspended. “Everyone was gagged,” he said.

C2 allegedly left another debt of more than AU$94,000 in Hong Kong after executing an event for a prominent multinational accounting firm in September.

Along with unpaid bills, rent and superannuation for employees (a legal obligation for any Australian business), the Administrator’s report claims to have evidence of unethical business practices.

According to the report, in the weeks leading up to the company’s voluntary administration, approx. AU$1.4 million was moved from C2 Melbourne’s Australian bank account, in a series of transactions, to C2 International in Montreal.

As well as the movement of monies, the report claims that a major event contract worth AU$2.5 million was also transferred. The contract to organise and host a client conference in Sydney was originally signed under C2 Melbourne, but was cancelled and redrawn under the Montreal-based business in the week prior to appointing an administrator.

St-Pierre has previously disputed claims of malpractice and did not respond to Biz Events Asia’s request for further comment.

Before the fall… C2’s Martin Enault, MCB’s Karen Bolinger, and MCEC’s Peter King at IMEX Frankfurt 2018.

Following a November meeting with creditors, a deed of company arrangement (DOCA) was signed stipulating that C2 International will pay AU$525,000 to write off its AU$1.7million debt. Payment is excepted in early 2019.

Understandably, many creditors remain frustrated and disheartened, including the Melbourne Convention Bureau, which provided generous support and a government-funded grant.

In a statement, bureau chief, Karen Bolinger, said: “C2 International has had significant unwavering support from the Melbourne Convention Bureau (MCB), the events industry and the corporate community. MCB is deeply disappointed with the outcome of the administration process and the impact that the C2 event cancellation has had on the Victorian events industry and stakeholders. Having considered the recommendations of the administrators, MCB reluctantly accepted the proposed deed of company arrangement.

“From an MCB perspective C2 had all the right qualities and track record to be established in Melbourne as an annual, innovative business event. It is unfortunate that notwithstanding MCB’s financial and industry support, that this event was not able to be seen through by C2 Melbourne.

“The cancellation of the 2018 C2 Melbourne event came as a shock to MCB, particularly given the positive messaging being provided from C2 Melbourne’s management team in the lead up. The administration process is still ongoing and we anticipate a final outcome for the businesses and suppliers impacted in early 2019.”

Diversity Rigging’s Petrani said creditors agreed to the DOCA “because we had no other options”. He said they were strongly advised not to pursue litigation because of the differences between Australian and Canadian corporate laws, limiting the chance for success.

C2 Montreal

The Melbourne Convention and Exhibition Centre (MCEC), the host venue for C2 Melbourne, also expressed disappointment – especially after entering a “word first” partnership with C2 International earlier this year to offer C2’s signature Labs to clients at the centre.

“The announcement from C2 Melbourne regarding the cancellation of their event and subsequent closure of their Melbourne office was disappointing,” MCEC chief executive, Peter King, said in a statement.

“We had committed significant time, energy and resources into building the event and additional partnership opportunities with C2. MCEC is not a creditor of C2 and we have no formalised relationship with C2.”

This year, C2 International also formed partnerships with IMEX Group and Meeting Professionals International (MPI) and had previously “joined forces” with MCI Group to set-up operations in Australia.

IMEX Group CEO Carina Bauer told Biz Events Asia that the group will continue its partnership with C2 International in 2019 and is “currently in discussions on the best way for that partnership to be activated, in order to benefit meeting professionals attending the IMEX shows”.

Bauer added: “Ultimately, it’s important for all meeting professionals to learn from each other. C2 are a company which has set out to showcase new ways of achieving business results and we can all benefit from understanding these different concepts.

“This does not mean that what C2 showcases will be right for every event, but I believe that being exposed to new ideas is always beneficial and often sparks creative thoughts that we can put into the context of our own businesses and events.”

A number of event professionals involved with C2 Melbourne have described the company’s inner workings as “disorganised”, and its conduct in Australia as “diabolical” and “unethical”. Nevertheless, everyone we spoke to applauded the C2 concept and the idea of pushing delegates outside of their comfort zone.

In Quebec newspaper, La Presse, St-Pierre said that in the medium term, C2 International “doesn’t have plans” to deploy the C2 Montreal formula to other cities. However, the company has organised a number of corporate events for clients – including a Sydney conference for a multinational accounting firm in November.

“We are disappointed to cancel Melbourne, but we do not see it as the end of the world,” St-Pierre told Le Presse.

If there’s a silver lining in all this, one former C2 Melbourne employee said a number of corporate clients are now looking to integrate experiential elements into their meetings.

“C2 will always leave a sour taste in Melbourne, but there’s definitely room for events like C2 moving forward,” he said. “Corporates are now more willing to experiment and add more colour and movement to their meetings.”