Australia’s first music school empire collapses, owing $1.8 million

Australia’s first music school empire has collapsed, owing $1.8 million to creditors, as it attempts to rise again under another name.

Stormer Music, run by brothers Phil and Joel Stormer, touted itself as the next Silicon Valley-inspired business to disrupt Australia’s music industry and celebrated its success with a lavish yacht party on board the 75-foot Aquarius.

Now it owes $544,000 to the Tax Office, tens of thousands of dollars to employees, and $18,000 to its landlord Spa World Australia.

In his initial advice to creditors, liquidator Travis Pullen of B&T Advisory found the company, which once operated 16 music schools in NSW and Victoria, only had $10,600 left in the bank.

The actual money owed to creditors could be much higher, with former contractors, teachers and parents claiming they have yet to be contacted despite being owed tens of thousands of dollars.

Liquidators said that of the $1.8 million owed to creditors, $689,000 is owed to Mt Riverview Pty Ltd, a company also founded by the Stormer brothers, and $170,000 to Joel Stormer and his consultancy. Joel Stormer has since become a director of Wattletree Music, which has taken over the remaining Stormer Music locations in Parramatta and Blaxland.

Franchisees claim the company failed to provide them with basic facilities and refused to pay teachers or refund parents for lessons it routinely cancelled, even as it generated contracts with the National Disability Insurance Scheme.

As Stormer Music expanded and franchisees struggled to operate their businesses, Phil Stormer infuriated his suburban music school operators by telling them to think more like Jeff Bezos, the founder of the US technology giant Amazon.

“We are not Amazon,” one franchisee wrote in now-deleted messages on internal messaging service Slack. “There is a massive difference between spoon-feeding assumed competence and throwing people in the deep end to see if they sink or swim.”

Franchisees and staff have repeatedly raised concerns with regulators, including the Australian Securities and Investments Commission, the Tax Office, the NSW Small Business Commissioner, and the Australian Small Business and Family Enterprise Ombudsman.

“But most people felt like they just kept getting bounced around between agencies without anything really happening,” said one former franchisee.

“From both the franchisee and contractor side, a lot of the affected people were younger workers, international students or people already under financial pressure. Many simply didn’t have the money, confidence or ability to fight lengthy legal battles over relatively small amounts of unpaid wages, super or entitlements.”

Guitar teacher Sean O’Keefe said after paying for fuel, public liability insurance and tax, he was losing money working at Stormer Music in Gregory Hills while waiting up to eight weeks to be paid.

“It baffles me. I’ve worked for some gronks throughout my life, and even the ones that are really unreasonable still pay you,” he said.

Phil and Joel Stormer did not respond to requests for comment on the liquidation.

In March, Phil Stormer said he was “very, very sorry” for not being able to pay employees and refund customers and pledged to make good on their obligations.

“I deeply regret the harm and hurt that we’ve caused, and we have been actively working to rectify the situation as much as we can,” he said. “Our heart has always been to see musicians flourish and do well.”

He said the company had expanded too quickly and laid the blame on the cost of living, business regulations and accounting errors for its demise.

But three months later, following reporting from A Current Affair and this masthead, contractors and teachers say they still have not seen the money they say they are owed.

Former teacher Stella Mountain was shocked to learn how much the brothers owed others and surprised to hear that Wattletree Music was being run by Joel Stormer at the former Stormer Music locations.

“That is pretty audacious. It’s really disturbing they’ve resurfaced,” said Mountain, who is owed $4472 in payments and superannuation.

“It also makes me really sad because a lot of their students are little kids, like this is their first exposure to music, and it’s such a wholesome, joyful activity that they’ve turned into this.”

Mountain said that as a young teacher, she would be “extremely wary” of working for such a business. “I’d get out of there pretty quickly,” she said.

Vivienne Ni’s son was a piano student at one of Stormer’s now-closed locations. She is still owed for term fees that have not been reimbursed.

When told of the liquidator’s interim report and that contracted teachers and parents have not been included in the list of creditors owed almost $1.8 million, she was adamant.

“The world needs to know what they’re doing is not right.”

Wattletree Music’s manager Courtney Dunn, who also worked at Stormer Music, said many people had been hurt by the empire’s collapse.

After the liquidation of Stormer Music, Dunn said, the two remaining studios in Blaxland and Parramatta were purchased through a process approved by the liquidator, so jobs could be preserved for staff who wanted to stay, and the schools could be passed to new owners as soon as possible.

“The alternative would have been immediate closure and loss of livelihood for over a dozen team members. No previous owners will have any involvement moving forward once transition to new owners is complete,” Dunn said.

“Our team has stayed through what has been an incredibly difficult period because they love their students and their workplace. I am acutely aware that these schools would not have survived to the point of liquidation without them – without musicians.”

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