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News Stories, Media Releases and Articles Last updated 14/10/2018
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Corporate Insolvency reforms (UK) - new tools for business rescue r3.org.uk, 20 September 2018 "Over the August bank holiday weekend, the Government published a package of corporate insolvency reforms, setting out the most substantial changes to the UK’s insolvency and restructuring framework since the 2002 Enterprise Act. The Government’s proposals are based on two earlier consultations: a 2016 consultation on new insolvency tools and procedures, and a 2018 consultation on tools to improve corporate governance. This post summarises the changes that could be introduced based on the 2016 reforms; the 2018 reforms will be addressed in an upcoming R3 Thinks post. The proposals include: a business rescue moratorium, to give struggling businesses a short ‘breathing space’, which would allow companies to put in a place a turnaround or rescue plan free from creditor action; a new court-based restructuring tool for both solvent and insolvent companies; and new measures to allow companies in a rescue procedure to continue to receive essential supplies...."
Revised Report as to Affairs (RATA) drafted ASIC Corporate Insolvency Update - Issue 9, September 2018 "ASIC’s project to launch a revised RATA (now ROCAP - Report On Company Activities and Property) is nearing an end after an extensive process including law reform and industry consultation. It reflects ‘best practice’ forms design and use of behavioural design tools to ensure you receive better information to help you do your job. We’ve shared our work with AFSA as it reviews the Statement of Affairs. ASIC intends releasing the ROCAP in November 2018."
AAT affirms decision to cancel registration of NSW liquidator ASIC Media Release, 18-116MR, 27 April 2018 "The Administrative Appeals Tribunal (AAT) has affirmed a decision to cancel the registration of Sydney liquidator, Mr Randall Clinton Joubert. The AAT found that Mr Joubert's actions as a registered liquidator of several companies were deliberate and dishonest and that he was not a fit and proper person to be a registered liquidator by: * in three external administrations, failing to disclose a relevant prior relationship with the directors in the Declarations of Relevant Relationships and Indemnities (DIRRIs); and * in one external administration, failing to investigate suspicious asset sales to a trust and subsequently failure to mention in the annual report to creditors the circumstances of the sale as known to him .... "
ASIC and DJSB sign Memorandum of Understanding for enhanced co-operation ASIC Media Release, 18-112MR, 23 April 2018 "The Australian Securities and Investments Commission (ASIC) and the Australian Government Department of Jobs and Small Business (DJSB) have today announced the signing of a Memorandum of Understanding (MOU). ... ASIC is Australia's integrated corporate, markets, financial services and consumer credit regulator. Its responsibilities include oversight of Australia's insolvency framework for corporations and the conduct of insolvency practitioners..... The Department of Jobs and Small Business is responsible for national policies and programs that help Australians find and keep employment and work in safe, fair and productive workplaces. Among its responsibilities include administration of the Fair Entitlements Guarantee (FEG) Scheme, which provides financial assistance to help employees who lose their job due to the liquidation or bankruptcy of their employer. The associated FEG Recovery Program is designed to strengthen the recovery of unpaid employee entitlements provided under the FEG Scheme. Ms Hartland (DJSB) said the new memorandum provides a framework for both agencies to enhance the impact and effectiveness of programs such as the FEG Scheme. ... An example of future liaison under the MOU between ASIC and DJSB that may be facilitated includes combatting illegal phoenix activity through the Phoenix Taskforce. The Phoenix Taskforce, comprising over 20 Federal, State and Territory government agencies, including ASIC and DJSB, provides a whole-of-government approach to combat illegal phoenix activity. This will help inform policy reform to address corporate misuse of the FEG Scheme, and key information obtained in the future under the MOU may include ASIC's applications to ban directors from involvement in the management of a corporation."
Former Noodle Box franchisee convicted for engaging in illegal phoenix activity ASIC Media Release, 18-101MR, 12 April 2018 "Ms Amy Timko, of Spreyton, Tasmania, has been convicted and sentenced after pleading guilty to two counts of fraudulent conduct under the Corporations Act 2001. On 10 April 2018, Ms Timko was sentenced to 2 months imprisonment by the Court of Petty Sessions in Hobart, which was wholly suspended on condition she not reoffend for 12 months. Ms Timko, a former sole director of A Twisted Little Company Pty Ltd ("the Company") operated a number of Noodle Box franchises in Northern Tasmania. Following an ASIC investigation, it was alleged that Ms Timko: * entered into a Bill of Sale to sell the plant and equipment of the Company for $30,000 to another company; * had authorised the plant and equipment to be transferred to other company without receiving the $30,000; * placed the Company in liquidation soon after the plant and equipment was transferred to the other company; and * reassigned a number of leases entered into by the Company to operate Noodle Box stores to the other company which was contrary to a franchise agreement entered into between the Company and the franchisor, Noodle Box Franchising Australia Pty Ltd...."
Paradise papers: The Cook Islands millionaire who never has to pay his debts Neil Chenoweth, The Australian Financial Review, 25 March 2018 "Allan Endresz is the face of business nightmare. In two decades of evading pursuit by government regulators, the disgraced share trader has found a way to ensure he never has to pay his debts – to anybody. In the epic saga Endresz was telling his Cook Islands bank that he secretly owned $50 million in stock and property in Australia even as he was fending off a 16-year campaign by the Australian Securities and Investments Commission to bankrupt him for unpaid debt. Endresz is Mr Teflon. Assets don't stick to him. And neither does debt. "I own things, but it's always qualified by declarations of trust," he told The Australian Financial Review...."
Company directors abusing insolvency system to avoid paying creditors, research suggests Ben Chapman, Independent (UK), 12 March 2018 "Company directors are dodging measures designed to stop abuse of the insolvency system so that they can avoid paying their creditors, new (UK) research suggests. Experts have expressed concern about the number of “phoenix” companies, which are created by directors after a firm is put into what’s known as a pre-pack administration. In a pre-pack, a company’s assets are sold before an administrator is appointed. The company can then legally start up again under a new name, but often the same directors, or people linked to them, buy up the assets, while creditors are left with unpaid invoices. Despite the potential for abuse, just 23 such sales were referred for scrutiny in 2017 by the Pre-Pack Pool, the independent review body set up to police the system, research from accountancy firm Moore Stephens shows. The number was down by more than half from the 49 recorded in 2016 despite the total number of corporate insolvencies rising 4 per cent in that time...."
ASIC disqualifies director from managing companies for maximum period of five years ASIC Media Release, 18-046, 19 February 2018 "ASIC has disqualified Mr Peter Kalos of Kurnell, NSW, from managing companies for the maximum period of five years as a result of his involvement in nine failed companies. ASIC found that Mr Kalos: * improperly used his corporate position by causing assets to be transferred for little or no consideration to the detriment of unsecured creditors; * failed to prevent some of the companies from trading whilst potentially insolvent; * failed to pay tax and ensure that proper financial records were kept; * failed to exercise his duties as a director with due care and diligence; * failed to comprehensively monitor company operations and financial position; and * engaged in phoenix activity by transferring the business of an indebted company to a new company leaving the initial company with no assets to pay creditors while continuing what was essentially the same business using the new company.... In making its decision to disqualify Mr Kalos, ASIC relied on reports lodged by liquidators of the failed companies. ASIC assisted the liquidators of Always Demolition & Excavation Pty Ltd and PK Management Consulting Services Pty Ltd to prepare supplementary reports that were used to disqualify Mr Kalos by providing funding from the Assetless Administration Fund. The total amount of debts owed by the 9 companies to creditors was almost $8 million...."
“Holding DoCA” Foe Wins Special Leave: High Court Peter Gosnell, Sydney Insolvency News, 16 February 2018 "Those practitioners considering a holding DoCa would be advised to consider the decision this morning of the High Court of Australia to grant special leave in the matter of Mighty River International Limited V Hughes & Ors. The Hughes in this matter is Pitcher Partners’ Bryan Hughes, who along with colleague Daniel Bredenkamp has been battling Mighty River’s director, Australian-Chinese businessman Yuzheng “Eugene” Xie over the Mesa Minerals deed of Company Arrangement (DoCA) since August 2016. The Mesa DoCA is a “holding DoCA” and while they are regularly touted as a cost effective mechanism that avoids the need for administrators to apply to extend a convening period, it might not be impossible that they have a tendency to polarise creditors. And we know which profession profits then. Mighty River argued this morning that in its judgement in August 2017 the Court of Appeal should have held that the Mesa DoCA was void or invalid.... Now the High Court has granted special leave Mighty River’s various challenges to the validity of holding DoCAs under Part 5.3 of the Corporations Act – dispensed with in August last year by a full bench of the West Australian Supreme Court’s Court of Appeal – will be resuscitated. But given Hughes and Bredenkamp have already fended off challenges to their independence, facing another period of uncertainty in the event the High Court application succeeds probably won’t keep them up at night...."
Former director of Cairns tour company convicted for making a false or misleading statement to ASIC ASIC Media Release, 18-044, 16 February 2018 "Former company director Leigh Alan Jorgensen, of Cairns, Queensland has been convicted of making a false or misleading statement to ASIC. An ASIC investigation found that in February 2016 Mr Jorgensen lodged with ASIC a Form 6010 to voluntarily deregister his company operating under the name Trek North Tours (ACN 156 455 828), in which Mr Jorgensen falsely or misleadingly claimed the company had no outstanding liabilities. In fact the company, which provided tour services in Cairns and other Far North Queensland regions, did have an outstanding liability owing to the Commonwealth. Mr Jorgensen was the sole director of the company. In addition to being convicted, Mr Jorgensen was also ordered to pay a fine of $2,000...."
Transport company convicted for failing to produce books to ASIC ASIC Media Release, 18-040MR, 14 February 2018 "Victorian motorcycle transport company Motorcycle Express Australia Pty Ltd (Motorcycle Express) has been convicted for failing to produce books about its affairs to ASIC. Motorcycle Express was the subject of a phoenix surveillance activity in December 2016. As part of its surveillance activities, ASIC served a Notice on Motorcycle Express on 6 January 2017 to produce books about its affairs on or by 23 January 2017. After receiving no response from the company, ASIC subsequently served a second Notice on Motorcycle Express on 3 February 2017 to produce books about its affairs on or by 14 February 2017. Motorcycle Express failed to produce the books by the compliance date. On 28 September 2017, Motorcycle Express director, Mrs Jannine Fergusson entered a guilty plea on behalf of the company on two counts of failing to provide books listed in a Notice to ASIC. Motorcycle Express was convicted in the Magistrates' Court of Victoria and fined $500...."
Company convicted for failing to produce books to ASIC ASIC Media Release, 18-039, 14 February 2018 "Sydney labour hire company MJC Project Group Pty Ltd (MJC Project Group) has been convicted for failing to produce books about its affairs to ASIC. MJC Project Group was the subject of a phoenix surveillance activity in February 2017. As part of its surveillance activities, ASIC served a Notice on MJC Project Group on 14 February 2017 to produce books about its affairs on or by 24 February 2017. Before the compliance date, MJC Project Group advised ASIC that it had possession of the books listed in the Notice, but required more time to comply. ASIC subsequently served a second Notice on MJC Project Group on 11 April 2017 to produce books about its affairs on or by 21 April 2017. MJC Project Group failed to produce all the books requested by the compliance date. On 5 February 2018, MJC Project Group director, Mr Thomas David Jackson entered a guilty plea on behalf of the company for failing to provide books listed in the Notice to ASIC. MJC Project Group was convicted in the Southport Magistrates Court and fined $500...."
Confidential ATO Data Shows Phoenixing On The Rise Peter Gosnell, Sydney Insolvency News, 9 February 2018 "More than 20 per cent of liquidations could involve illegal phoenix activity according to confidential Australian Tax Office (ATO) data divulged this week by Minister for Financial Services Kelly O’Dwyer, who also laid bare the inadequacy of efforts to curb the practice and eradicate complicit liquidators during a speech to Parliament on Wednesday.... In illustrating the levels of GST avoidance perpetrated by property developers who liquidate their companies after stripping assets O’Dwyer quoted ATO data that is not publicly available. “…. phoenixing to avoid paying GST has grown significantly over the last decade,” she said. “According to ATO data, over the past five years more than 3,700 individuals have been identified as engaged in this sort of activity. “These individuals controlled over 12,000 insolvent entities responsible for $1.8 billion in debt written off. The insolvent entities also claimed $1.2 billion in GST credits between 2013 and 2017,” the Minister said. The Minister’s office confirmed to Sydney Insolvency News that the figures have not been publicly released...."
Former director pleads guilty to fraudulently removing company funds ASIC Media Release, 18-028MR, 5 February 2018 "Ms Lorraine Bullock of Croydon, Victoria has pleaded guilty to dishonestly using her position as a director to fraudulently remove company property. Ms Bullock, a former director of Twently12 Pty Ltd operated a liquor store in Healesville, Victoria. An ASIC investigation found that soon after the appointment of the liquidator to the company, Ms Bullock caused funds in the amount of $20,655.18 to be transferred from the Company to a related company called Yarra Junction Pty Ltd of which her son was a director. At the time, Ms Bullock was not authorised to make the transfer. The company also had numerous creditors who were collectively owed in in excess of $700,000. The company was placed in liquidation on 27 October 2015. ASIC commenced an investigation after receiving a report from the liquidator of the Company; Brent Morgan of Rodgers Reidy. ASIC assisted the liquidator to prepare his report by providing funding from the Assetless Administration Fund. Ms Bullock appeared in the Melbourne Magistrates Court on 18 January 2018 and pleaded guilty to one count of fraudulently removing company property. Ms Bullock was discharged without conviction upon entering into a recognisance in the sum of $1,000 on the condition that she is of good behaviour for 18 months...."
ARITA, AFSA and ASIC held their bi-annual liaison meeting on 5 December 2017 ARITA website, 18 January 2018 A summary of discussion points from the meeting.
ASIC disqualifies Queensland father and son from managing companies ASIC Media Release 17-452MR, 20 December 2017 "John Thomas Shannon, of Dalby, Queensland and his son Jason Thomas Shannon, of Oakey, Queensland, have been disqualified from managing corporations for three and half and four years, respectively. Their disqualification follows the appointment of liquidators to five companies they managed .... As a result of information contained in the reports lodged by the liquidators of the failed companies, ASIC was concerned that both men had failed to discharge their director duties by: * accruing large debts owed to the Australia Taxation Office, WorkCover Queensland and unsecured creditors; * failing to observe requirements to lodge documents with the Australian Taxation Office; * failing to ensure the companies complied with their obligations to keep written financial records; and * engaging in conduct amounting to illegal phoenix activity. Liquidators reported that the total amount owed to creditors exceeded $4.15 million across all five companies....."
ASIC reports on corporate insolvencies 2016–17 ASIC Media Release 17-428MR, 12 December 2017 "ASIC today published its annual overview of corporate insolvencies based on statutory reports lodged by external administrators for the 2016–17 financial year. Report 558 Insolvency statistics: External administrators’ reports (July 2016 to June 2017) (REP 558) provides information on the nature of corporate insolvencies, supplementing the monthly statistics that ASIC publishes on its website. An external administrator's role includes investigating company failure and reporting both to creditors and ASIC. ASIC uses external administrator reports in its work, including in reporting to the market on corporate insolvency...."
Former director sentenced for director duties breaches ASIC Media Release 17-448MR, 19 December 2017 "Mr James Meaden, of Invermay, Victoria has been convicted and sentenced after pleading guilty to dishonestly using his position as a director of a company. Mr Meaden, the former and sole director of Brimarco Pty Ltd (the Company) operated a business specialising in the manufacturing of trailers in Ballarat, Victoria. An ASIC investigation found that Mr Meaden engaged in illegal phoenix activity by causing $34,800 to be transferred from the Company to a related company called Tough As Pty Ltd, of which he was also the sole director. The transfer occurred one day prior to a court hearing to wind up the Company. After the transfer, the Company had no funds to pay employees' wages and other entitlements. The Company also had numerous creditors who were collectively owed more than $2 million. The Company was placed in liquidation on 17 April 2015. Mr Meaden appeared in the Ballarat Magistrates Court on 12 December 2017. He was convicted and fined $5,000. As a result of his conviction on a dishonesty offence, Mr Meaden is automatically disqualified from managing corporations for five years from 12 December 2017...."
Queensland franchisee pleads guilty to breaching director duties ASIC Media Release 17-449MR, 19 December 2017 "Ms Sheila Anne McAulay, of The Gap, Queensland has pleaded guilty to dishonestly using her position as a director of a company. An ASIC investigation found that Ms McAulay, a former director of Greenlay Enterprises Pty Ltd (Greenlay), engaged in illegal phoenix activity by executing a Bill of Sale to sell assets of Greenlay to a related company called Pasta on the Run Pty Ltd (Pasta), of which she was also the director, for $20,000. However, no independent valuation of the assets was conducted and no consideration was paid to Greenlay by Pasta. This conduct resulted in Ms McAulay stripping the assets of Greenlay, leaving no assets for the liquidator to realise to pay creditors of Greenlay. The Company was placed in liquidation on 1 July 2013. Ms McAulay appeared in the Brisbane Magistrates Court on 12 December 2017 and pleaded guilty to one count of breaching her director's duties. Ms McAulay was discharged without conviction upon entering into recognisance in the sum of $2,000 on condition that she would be of good behaviour for two years."
Bankrupt sentenced to imprisonment AFSR Media Release: QLD (Trimble), 11 December 2017 "Mr Anthony John Trimble, aged 59, was sentenced at the Caboolture Magistrates Court on 4 December 2017, on three counts of removing property prior to bankruptcy, two counts of failing to deliver property in his possession to his trustee, and failing to disclose information about his examinable affairs to his trustee. Mr Trimble was also found guilty of failing to file his Statement of Affairs in an acceptable form...."
Sister of bankrupt pleads guilty to offences AFSR Media Release: WA (Lam), 6 December 2017 "On 17 November 2017, Ms Thi Thu Hang Lam was sentenced at the Perth Magistrates Court for receiving property from a debtor who became bankrupt, with intent to defraud creditors. Ms Lam was sentenced to 12 months imprisonment, to be released immediately on a $1000 good behaviour bond for two years. Magistrate DeMaio noted the need for general deterrence, given that Ms Lam used the money to benefit herself, knowing that the bankrupt’s creditors would miss out...."
Bankrupt pleads guilty to two offences AFSR Media Release: QLD (Romi), 24 November 2017 "In July 2014, Mr Romi received $30,000 as a result of a property settlement. Within two weeks he had withdrawn $24,000 in cash from his account, using $10,000 for a holiday and gambling the balance at a casino. This money should have been used to pay his creditors. On 28 July 2014, Mr Romi filed for voluntary bankruptcy with debts in excess of $113,000. He failed to disclose in his Statement of Affairs that he had sold a house in 2013, that he had made a profit in relation to the sale of another house and that he had transferred ownership of motor vehicles prior to bankruptcy. In an interview with AFSA investigators, Mr Romi admitted he received the $30,000 prior to bankruptcy and just ‘blew it.’ Magistrate Quinn convicted Mr Romi and placed him on a good behaviour bond for two years. In sentencing, the Magistrate considered Mr Romi’s early plea which indicated his remorse, his cooperation and the fact that he had no previous convictions."
Tax Boss Wins Access To Time Sheets In Tinkler Fight Peter Gosnell, Sydney Insolvency News, 22 November 2017 "In the latest skirmish over the multi-million dollar proceeds of sale of the Patinack Farm properties once owned by Nathan Tinkler, liquidators Neil Cussen and David Mansfield have been ordered to deliver their time sheets to the Commissioner of Taxation (CoT). Following a directions hearing in the NSW Supreme Court on Monday, Justice Paul Brereton ordered the Deloitte duo to produce the time sheets and pay $1,117,984.79c from the proceeds of sale of property at Sandy Hollow, Broke and Port Macquarie into the trust account of their solicitors, Kemp Strang...."
First Time Referrers And Mystery Mandarin Speakers Peter Gosnell, Sydney Insolvency News, 22 November 2017 "The issue of referrals initiated in a foreign language piqued SiN’s interest as we leafed through the Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) sent to creditors of CRCG-Rimfire Ply Limited last week. Grant Thornton’s Mike McCann and Said Jahani picked up the appointment as voluntary administrators (VAs) from Vincent Shi of Hanrick Curran, the company’s external accountants. According to the DIRRI, an unidentified Grant Thornton (GTAL) staffer then spoke with the only director of CRCG-Rimfire based in Australia.... "
New ASIC Boss Should Bring A Broom Peter Gosnell, Sydney Insolvency News, 25 October 2017 "Before one casts a critical eye over the back yards of others, one’s own patch must be beyond reproach; which brings us to the slightly unkempt quarter acre awaiting incoming ASIC chairman James Shipton.... “Culture is one of the great challenges for all financial markets globally,” Mr Shipton said.... But judging by the experiences of a former senior ASIC staffer catalogued in judgements of the Federal Court and Administrative Appeals Tribunal (AAT), Shipton might best be served by first cleaning up his own backyard.... "
ASIC accepts voluntary undertakings from three liquidators ASIC Media Release 17-351MR, 19 October 2017 "ASIC has announced the latest enforcement outcomes from its Published Notices Website and Lodgement project, an industry-wide project to improve publicly available information about failed companies through testing all registered liquidators’ compliance with the requirement to lodge forms with ASIC and publish notices on our published notices website. In each of the below cases, the liquidator had not complied with their statutory lodgement and publication obligations and took steps to rectify outstanding lodgements and publication of notices...."
Liquidator Shrugs Off Tycoon’s Affidavit Tirade Peter Gosnell, Sydney Insolvency News, 29 September 2017 "It’s not every insolvency practitioner who’s accused of connivance in a conspiracy so grand that the federal executive lies at its heart but for John Park, it’s not just fake news, it’s not even new. Where do I start,?” Park said yesterday when SiN rang to discuss the latest incendiary affidavit authored by former member of parliament and owner of the Yabulu Nickel Refinery, Clive Palmer. “Every time I read an affidavit I’m waiting to learn the next thing that I’ve done,” the FTI Consulting partner said. The affidavit in question is the ninth filed by Palmer in his current legal battle over Queensland Nickel (QN), a fight which is not in fact with Park as one of QN’s general purpose liquidators (GPL) but with PPB Advisory’s Steve Parbery, who with Michael Owen and Marcus Ayres was appointed special purpose liquidator (SPL) to QN a month after the company was placed into liquidation by creditors in April, 2016.... "
Two time bankrupt disposes of cash AFSR Media Release, Vic (Lock), September 27, 2017 "Mr Richard Lock, a 51 year old Mechanical Fitter, was sentenced on 17 August 2017 after pleading guilty to removal of property prior to bankruptcy.... Mr Lock was sentenced at Frankston Magistrates Court by Magistrate Gattuso who convicted and sentenced him to pay a fine of $2,500 plus costs of $262.00. In sentencing, the Magistrate stated that the offending was too serious to warrant a non-conviction. Had the defendant had prior convictions, he would have imposed a Community Corrections Order."
Bankrupt pleads guilty to signing false declaration and contracting further debts AFSR Media Release, SA (Woodall), September 26, 2017 "Mr Terry Scott Woodall, a 49 year old builder from Keith in South Australia, was sentenced on 20 September 2017 after pleading guilty to making a false declaration in his Statement of Affairs and contracting a debt without any reasonable or probable grounds of being able to repay it.... In sentencing, her Honour noted that Mr Woodall had committed the offences knowingly in the hope he would get away with them. She took into account the importance of deterrence, noting that the efficacy of the Bankruptcy Act 1966 relies on the honesty of bankrupts, and Mr Woodall’s conduct undermined the bankruptcy system."
Bankrupt failed to fully and truthfully disclose information as required by his trustee AFSR Media Release, SA (Usher), September 14, 2017 "Mr Danny James Usher was sentenced at the Christie Beach Magistrates Court on 23 August 2017 for failing to fully and truthfully disclose information in relation to the sale of a property.... Mr Usher was convicted and entered into a recognizance of $200 and 12 month good behaviour bond. He was also ordered to pay court costs of $260 and disbursement costs of $79.70 within 28 days, from 23 August 2017. The trustee has since recovered the house portion and sold it for the benefit of the bankrupt estate."
TEN Creditors’ Report More Grist For PCC Mill Peter Gosnell, Sydney Insolvency News, 8 September 2017 "First it was the DIRRI. Then the supplementary DIRRI. And now it’s the report to creditors. When it comes to TEN Network Holdings, voluntary administrators KordaMentha can scarcely issue a document that isn’t analysed by TEN’s unsuccessful bidders in the hope that some perceived misstep, omission or flaw will deliver the opportunity they need to reverse the consequences of their own miscalculation. This week we’ve seen WIN TV chairman and major TEN shareholder Bruce Gordon challenge the VA’s decision to hold the second meeting of TEN’s creditors next Tuesday on September 12...."
TEN Shares Transfer Challenge Likely: VAs Peter Gosnell, Sydney Insolvency News, 1 September 2017 "A critical element of the Network TEN – CBS transaction being engineered by voluntary administrators (VAs) KordaMentha looks set to be challenged, a court heard this week. On Thursday, barrister Ian Jackman told Justice Brigitte Markovic that “other parties are likely to appear and may well oppose” the application by the VAs to transfer shares controlled by TEN’s three billionaire shareholders to the American entertainment behemoth. Might two of the three – Lachlan Murdoch and Bruce Gordon – be preparing a last gasp tilt in expectation of an 11th hour shift in media ownership laws before CBS can digest the prize? ...."
Train driver convicted of Bankruptcy Act offences AFSR Media Release, Vic (Alter), August 4, 2017 "Mr Werner Martin Willem Alter was sentenced on 3 August 2017 after pleading guilty to 31 counts of incurring a debt without any reasonable or probable grounds of being able to repay that debt. With debts worth over $13 million, Mr Alter filed for voluntary bankruptcy on 6 May 2015. In the month prior to filing for bankruptcy, he made purchases and cash advances from nine credit cards totalling more than $222,000. Shortly before incurring these debts, he was served with a Judgment to pay damages of $380,000. It was alleged that after taking his assets and salary as a train driver into account, there was no reasonable expectation that he could repay those debts .... Magistrate Martin at Ringwood Magistrates Court sentenced Mr Alter to a Community Corrections Order for 18 months with a condition that he perform 300 hours of unpaid community work over 12 months. In sentencing, his Honour noted that a substantial discount had been applied due to his early guilty plea however, the offence was serious and a very large sum of money was involved."
"Why do they do it? Inside the mind of the white-collar criminal" Book by Eugene F Soltes, Ph.D. Perseus Books, LLC, a subsidiary of Hachette Book Group, Inc. Article By Dick Carozza CFE, Fraud Magazine (USA), July/August 2017 " .... Soltes says that when you’re driving on the highway you might speed up to pass some cars and glance down at the speedometer and see that you’re going 75 miles per hour — 10 miles over the speed limit. You probably won’t take your foot off the accelerator unless your spouse reminds you you’re speeding, you pass an accident or a police car is parked on the side of the road up ahead. It takes some kind of uncomfortable dissonance — an external influence or event that conflicts with your intuition — to motivate a behavioral change, Soltes says.... executives need to be surrounded by people of diverse backgrounds and viewpoints, Soltes says. “When we’re surrounded by people that have the same views and opinions, we’re less likely to actually have that dissonance,” he says. “And therefore, we’re going to comfortably proceed without really taking a step back. That dissonance, when it rises, forces us to take a second look at something.”
ARITA COPP Makeover Underway Before Korda’s Call Sydney Insolvency News, Peter Gosnell, 26 July 2017 "In correspondence obtained by Sydney Insolvency News (SiN), Ten Network Holdings’ administrator Mark Korda expressed his view that the ARITA Code of Professional Practice (COPP) required an upgrade if it was to adequately accommodate the realities of modern restructuring, particularly the realities represented by his firm’s work for Ten’s stakeholders in the months prior to its appointment as voluntary administrators (VAs) of the Ten Group. “KordaMentha recognises the important roles ARITA plays in our profession,” Korda said in a letter to ARITA chief executive John Winter dated July 13. “However, we would have preferred a more consultative approach to a bespoke, modern day restructuring issue which has arisen in circumstances where you acknowledge that at all times KordaMentha and the Administrators have acted with the utmost good faith,” Korda said...."
Ferrier’s Gothard Appointed Ten SPA Sydney Insolvency News, Peter Gosnell, 19 July 2017 "Ferrier Hodgson’s Peter Gothard has been appointed special purpose administrator (SPA) of Ten Network Holdings but in insolvency’s incestuous world of mutual referral, can any of the parties claim to be above the apprehension of bias? Gothard was appointed SPA yesterday by order of Federal Court judge David O’Callaghan. Those orders came after weeks of industry rumbling about the contents of the Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) published by KordaMentha’s Mark Korda, Jarrod Villani and Jennifer Nettleton after they were appointed voluntary administrators (VAs) of Ten Network Holdings on June 14 .... Justice O’Callaghan ordered yesterday that Gothard be appointed to examine whether if the almost $975,000 in fees paid by Gilbert + Tobin to KordaMentha pre-appointment would qualify as voidable transactions in the event a liquidator is appointed. As the Ten group’s VAs KordaMentha could not be expected to undertake an impartial analysis of this question and in response to questions from SiN Gothard said there was no referral relationship existing between Ferrier Hodgson and Gilbert + Tobin that would prevent him from undertaking the tasks laid out in Justice O’Callaghan’s orders...."
Court orders winding up of 18 companies associated with Macro Group ASIC Media Release, 17-240MR - 19 July 2017 "The Federal Court of Australia has ordered the winding up of 18 companies associated with the Macro Group, all of which have Desiree Veronica Macpherson as a director .... Justice Barker made the orders to wind up the companies on the grounds that it would be just and equitable to do so, appointing Mr Hayden Leigh White and Mr Matthew David Woods of KPMG as joint and several liquidators of all 18 companies. ASIC has concerns that the companies have been involved in multiple breaches of the Corporations Act, were not being properly managed and were potentially insolvent. The winding up of the companies is part of ASIC's ongoing investigation into a number of land developments in the Pilbara region of Western Australia, in particular a development known as 'The Newman Estate', which was subject to ASIC action and Federal Court permanent restraint orders in May last year."
Five time bankrupt convicted of multiple offences AFSR Media Release, NSW (Raffie), 14 July 2017 "Ms Aziza Raffie of Cecil Hills, New South Wales, was sentenced on 11 July 2017 for making a false declaration on five occasions, providing false information to her bankruptcy trustee and obtaining credit without disclosing her bankruptcy. Ms Raffie was convicted and ordered to perform 250 hours of community service. Ms Raffie has been bankrupt five times since 1998. She was bankrupt twice using her current legal name of Aziza Raffie in 1998 and 2011, twice using her previous name of Lenka Carovska in 2007 and 2011 and most recently in 2014 using the name Azira Raffie. Ms Raffie made false declarations on her bankruptcy forms on each occasion when she filed for bankruptcy. She obtained a loan without disclosing to the finance company that at the time of the application she was bankrupt under the three different names. During her most recent bankruptcy she provided false information in a questionnaire provided to her trustee ...."
ASIC's cost recovery framework finalised ASIC Media Release, 17-235MR - 14 July 2017 "ASIC’s cost recovery framework has been finalised, incorporating changes made after broad industry consultation .... As a result of legislation passed on 15 June 2017, industry funding will see regulated entities share the costs of ASIC’s regulatory services for their sector. The first invoices will be issued in January 2019 and will recover costs for regulatory services for the 2017–18 financial year. The invoices will be based on the number of regulated entities in a sector and, in most cases, information provided by regulated entities via ASIC's new online portal...."
ASIC accepts Victorian liquidator's cancellation ASIC Media Release, 17-211MR - 28 June 2017 "ASIC has accepted an enforceable undertaking (EU) from Victorian registered liquidator, Mr Raymond Anthony Sutcliffe, following an investigation of his conduct in relation to 43 external administrations which indicated he had not adequately discharged his duties as a liquidator...."
Criminal syndicate and outlaw motorcycle gang members removed as company directors and business proprietors ASIC Media Release, 17-207MR - 27 June 2017 "The Australian Securities and Investments Commission (ASIC) and Queensland Police Service (QPS) have collaborated in a joint agency surveillance operation to identify and remove criminal syndicate and outlaw motorcycle gang (OMCG) members from managing corporations or having a registered business name...."
Bankrupt found guilty of an offence under the Bankruptcy Act AFSR Media Release, NSW (Phung) – 23 June 2017 "Dr Van Thien Phung, of Potts Point, New South Wales, lodged an appeal after being convicted and sentenced for removing property within 12 months of going bankrupt. He relied on a defence that he gambled money without intent to defraud any of his creditors .... On 15 June 2017, District Court Judge Tupman accepted that Dr Phung gambled some of the money but concluded that he had failed to establish his defence. Judge Tupman confirmed the conviction and released Dr Phung without passing sentence on a $500 good behaviour bond for 12 months."
ASIC reports on supervision of registered liquidators for 2016 ASIC Media Release, 17-194MR - 22 June 2017 "ASIC today released its sixth annual report into the supervision of registered liquidators. Report 532 ASIC regulation of registered liquidators: January to December 2016 details the supervisory, enforcement, stakeholder liaison, policy and educative work ASIC undertook in its commitment to continue improving regulation of the insolvency and restructuring sector...."
Korda’s TEN DIRRI A Gameshow Script Sydney Insolvency News, Peter Gosnell, 21 June 2017 ".... The Ten DIRRI disclosed that the KordaMentha team attended upwards of 50 meetings during late February 2017, jawboning with Ten’s management, its lender CBA, its board – including the now ex-guarantors of the company’s loan facilities – and its corporate advisor Moelis and legal representatives Gilbert + Tobin, the ultimate referrer. Almost $1 million in fees were paid for this pre-appointment advice. The DIRRI also outlined KordaMentha’s relevant relationships with active players in the Ten saga, like CBA, which flicks plenty of work Korda’s way and Gilbert + Tobin, which does likewise. So, how does KordaMentha square that up with the Code’s insistence that disclosing interests or relationships the create a perception of a lack of independence doesn’t remedy the conflict? On one measure, any professional or commercial relationship within two years creates a conflict that cannot be dealt with simply through disclosure...."
Safe Harbour/Ipso Facto model: Final consultation www.arita.com.au, 21 June 2017 "Following significant consultation, the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 was introduced into the Senate on 1 June 2017 in what was widely expected to be its final form. However, the Bill has been referred to the Economics Legislation Committee for further consultation. Submissions are being accepted until 12 July 2017 and ARITA will again be advocating that a registered liquidator, or a specially qualified sub-class thereof, must form part of the turnaround team to provide the advice necessary for ‘safe harbour’ protection. The perils of inadequate qualifications of advisers are evident in the financial planner space, where the Government has been forced to take dramatic action across the sector to enforce qualification and continuous professional education standards. This consequence of the lack of qualifications has been significant loss to countless individuals and small businesses who were taken advantage of. We also note the current issues presented by the proliferation of unregulated ‘pre-insolvency advisers’, again to the detriment of innocent stakeholders. We are strongly of the view that the same situation is likely to arise if adequate professional standards are not put in place requiring a qualified and regulated professional to be formally engaged for a safe harbour protection to be effective. Indeed, the simple engagement may afford directors a higher level of protection both through qualified advice and to give certainty that they are provided a safe harbour protection. Taking account of the interests of all stakeholders in a distressed entity, we do not accept that this is, or needs to be, an onerous requirement. ARITA is aware that a number of other organisations hold similar concerns regarding the unregulated nature of an ‘appropriately qualified’ adviser in the Bill. We urge members to consider making a submission in support of ARITA’s position, or outlining their concerns in relation to the Bill as it is anticipated to be final opportunity to do so. Should the reforms be enacted, ARITA will provide its members with specific guidance on their operation."
Reforms to facilitate restrucuring introduced ("Safe Harbour" and Ipso facto") www.arita.com.au, 1 June 2017 "It is pleasing to see the culmination of ARITA’s thought leadership work with the introduction of safe harbour and ipso facto protection into Parliament today...."
MFS case: $2bn lost, 217 breaches, but watchdog failed to growl The Australian, Anthony Klan, Journalist, Sydney, 17 June 2017 "... The Supreme Court of Queensland last week found directors of MFS had breached 217 laws and illegally shifted $147.5m of investor funds, then forged and backdated documents to cover up the crimes...."
Companies face levy in ASIC funding overhaul The Australian, Andrew White, Associate Editor, Sydney, 5 May 2017 Australia’s biggest public companies face a levy of $664,000 each under a radical overhaul of the corporate regulator’s funding that will shift the cost to those who require the most attention.
AFSA, ASIC and ARITA publish guide for people in business AFSA Media Release, Tuesday, April 4, 2017 "Australian Financial Security Authority’s Chief Executive Veronique Ingram PSM, Commissioner John Price of the Australian Securities and Investments Commission (ASIC) and the Australian Restructuring and Insolvency Turnaround Association’s Chief Executive, John Winter have announced the release of a new guide for people in business .... AFSA, ASIC and ARITA worked together to develop this new guide. ASIC is responsible for Australia’s corporate insolvency system and AFSA is responsible for the oversight of Australia’s insolvency systems for individuals. Together with ARITA, the peak professional body for insolvency practitioners in Australia, development of the guide has drawn on the expertise of each organisation."
ASIC requests inquiry into conduct of Sydney liquidators ASIC Media Release, 17-014MR - 24 January 2017 "ASIC has lodged an application requesting the Supreme Court of NSW inquire into the conduct of Sydney liquidators Andrew Hugh Jenner Wily and David Anthony Hurst concerning the performance of their duties as joint liquidators of 12 companies to which they had been appointed. ASIC's concerns include: a lack of independence and a failure to disclose potential conflicts; the failure to report to ASIC suspected shadow directors and offences underlying suspected illegal phoenix activity; and a failure to undertake basic investigations into the companies' affairs."
Former director of plumbing company charged with fraud ASIC Media Release, 17-013MR - 24 January 2017 "(A company director) has appeared at the Magistrates Court of Victoria in Melbourne, charged with three counts of fraud under the Crimes Act (Vic) .... ASIC alleges that approximately eight months after (his company) was placed in liquidation, the director transferred $124,763.84 from a (company) overdraft bank facility to the personal bank account of a family member. The director then arranged for the family member to withdraw the funds, which he used for his own personal use .... ASIC was alerted about the alleged contravention by the liquidator of the company. The maximum penalty for the offence is 10 years imprisonment."
Voluntary Undertaking for Victorian liquidator after failure to discharge duties ASIC Media Release, 17-007MR - 17 January 2017 "ASIC has accepted a voluntary undertaking (VU) from Melbourne-based registered liquidator, Richard Trygve Rohrt, after an ASIC review of several external administrations found he had failed to adequately discharge his duties. Mr Rohrt conducts his practice through Hamilton Murphy Pty Ltd; a company of which he is sole director...."
Victorian liquidator suspended ASIC Media Release, 16-453MR - 20 December 2016 "The Companies Auditors and Liquidators Disciplinary Board has suspended the registration of Mr Stan Traianedes, of Box Hill, Victoria as a registered liquidator for three years following an application by ASIC. The Board also ordered that Mr Traianedes pay ASIC's costs and give various undertakings, including that: he bear the costs of and incidental to the appointment of replacement liquidators to his external administrations; upon the expiry of the suspension period, his first ten appointments will be undertaken jointly and severally with another registered liquidator; if, during the period of three years following the expiry of the suspension period, he commences practice as a sole practitioner, he will have all template, checklist and procedure documents used in his practice reviewed by an ASIC-approved reviewer, and report to ASIC on the reviewer's recommendations and steps taken to implement them; and he will undertake further educational training...."
ASIC accepts voluntary undertakings from WA liquidators ASIC Media Release, 16-400MR - 21 November 2016 "ASIC has accepted voluntary undertakings (VUs) from WA-based registered liquidators, Mr George Lopez and Mr Evan Verge, both of Melsom Robson, Chartered Accountants. ASIC’s ongoing industry-wide project to test compliance with registered liquidators’ obligations to lodge documents and publish notices required under the law continues to identify practitioners not complying with basic obligations. Mr Lopez and Mr Verge acknowledge the non-compliance and have taken the necessary steps to rectify it...."
Federal Court prohibits Melbourne liquidator from accepting new appointments for three years ASIC Media Release, 16-345MR -11 October 2016 "The Federal Court has made orders prohibiting Melbourne liquidator, Ross John McDermott from accepting any new appointments as a registered liquidator (including appointments as a controller or administrator) for three years. The Court's orders followed an inquiry by the Court into Mr McDermott's conduct of 26 external administrations during the period 2009 to 2014...."
Court orders the wind up of fundraising companies ASIC media Release, 16-148, 18 May 2016 "Following an application by ASIC, the Federal Court of Australia has ordered the wind up of CME Capital Australia Pty Ltd, Boston Pacific Capital Pty Ltd, Boston Pacific Capital Australia Pty Ltd, GKN Capital Pty Ltd and IMCG Pty Ltd. In doing so, the Court also ordered that Mr Ross Blakeley and Mr Quentin Olde of FTI Consulting be appointed as joint and several liquidators of the companies. Justice Moshinsky ordered that the companies be wound up on just and equitable grounds given that there was a justifiable lack of confidence in the management of the companies, that the companies were insolvent, their records were in an unsatisfactory state and that there had been a number of possible contraventions of the Corporations Act 2001. ASIC's investigation into the activities of the companies is continuing...."
Bankrupt pleads guilty to two offences under the Bankruptcy Act: fined $500 for each offence AFSA Media Release, QLD (TOPLEY), 13 May 2016 "On 29 April 2016, Mr Rohan Miles Topley pleaded guilty in the Brisbane Magistrates Court to failing to file his Statement of Affairs and leaving Australia without the consent of the trustee. Mr Topley was made bankrupt on 27 August 2014, due to a Sequestration order against his estate by the Commonwealth Bank, trading as Bankwest. Mr Topley’s trustee advised him to submit a statement of affairs within 14 days of his bankruptcy and to obtain permission before travelling overseas. Mr Topley failed to file a statement of affairs and on 22 April 2015, departed Australia without his trustee’s permission. Mr Topley was convicted on both counts and incurred a fine of $500 for each offence. In passing sentence, the Magistrate noted the chronology of events and Mr Topley’s extensive failure to comply over a long period of time. The Magistrate further noted that there was no evidence that the offences were committed under extenuating circumstances—and that the personal hardships experienced by Mr Topley in late 2012, occurred well before he returned to work and before he failed to file the statement of affairs. The Magistrate concluded that there was nothing in Mr Topley’s character or prior behaviour that required consideration of a nominal punishment ...."
Turnaround business advisor sentenced for aiding and abetting breach of director's duty ASIC Media Release, 16-127MR, 29 April 2016 "Following an ASIC investigation, Mr Stephen Charles Hall, a director of Eagle Business Solutions Pty Ltd (EBS) has been convicted and ordered to pay a fine of $6,600 for dishonestly aiding, abetting, counselling or procuring another director to breach their director duties. Mr Hall, of the Gold Coast, Queensland and EBS provide turnaround business advice to directors of companies experiencing financial difficulties. ASIC's investigation found that Mr Hall had cold-called a company director who had received a wind up notification from the Australian Taxation Office. After being engaged by the director, Mr Hall aided the director to dishonestly use his position as a company director to conceal the actual ownership of company assets from the liquidator appointed to his company. In doing so, the director attempted to prevent the liquidator from realising the assets of the company that could have been used to pay outstanding debts owed to creditors. The director also attempted to gain a benefit when he continued to assert control over the company assets for his own benefit.... Mr Hall pleaded guilty to section 184(2)(a) of the Corporations Act as applied by clause 11.2(1) of the Commonwealth Criminal Code in that he aided, abetted, counsel or procure another director (Ed.: should read "person") to use his position as a director with the intention of directly or indirectly gaining an advantage for himself...."
Court invalidates appointment of voluntary administrator to Planet Platinum following successful ASIC application ASIC Media Release 16-102MR, 4 April 2016 "Following a successful application by ASIC, the Supreme Court of Victoria has made a declaration that the appointment of Mr Gideon Rathner as voluntary administrator of Planet Platinum Ltd (Planet Platinum) on 4 May 2015 was invalid, void and of no effect. In making the declaration, the Court found that the only reason the directors had appointed Mr Rathner as an administrator was for the improper purpose of stopping ASIC from appointing a provisional liquidator to the company, and not because they had formed a view that it was insolvent or likely to become insolvent. The Court also found that Mr Rathner failed to take reasonable steps to confirm the validity of his appointment and that based on the information he had at the time, there was an insufficient basis for him to be satisfied that Planet Platinum was either insolvent or likely to become insolvent...."
NSW liquidator completes quality review program ASIC Media Release, 16-104MR, 4 April 2016 "Parramatta registered liquidator, Schon Gregory Condon, of Condon Associates, recently completed a quality review program, responding to compliance concerns that ASIC identified from three of Mr Condon's external administrations.... As part of its ongoing surveillance activities, ASIC reviewed reports to creditors prepared by Mr Condon. The review showed that he failed to: (1) adequately investigate the companies’ affairs or, failed to adequately document those investigations; (2) provide adequate details to creditors about the capacity of relevant parties to make proposed payments and/or meet other obligations to one of the companies; (3) provide adequate details to creditors about the relationship between the purchaser of one of the companies’ business and the company or its directors; and (4) in respect of one of the companies, adequately inform creditors about debtors, in particular, the identity of a debtor who was the company's former director...."
Company director receives suspended jail sentence for failing to assist liquidator ASIC Media Release 16-065, 8 March 2016 "Mr Joseph Cogno, director of Middlebrook Estate Pty Ltd has been sentenced in the Adelaide Magistrates’ Court after pleading guilty to three charges brought by ASIC for failing to provide a Report as to Affairs and deliver books and records to the liquidator of the company. Middlebrook Estate Pty Ltd was wound up by order of the Federal Court of Australia on 26 February 2014 on application of the Deputy Commissioner of Taxation. Mr Cogno was convicted and sentenced on 1 March 2016 to a total of three months imprisonment, wholly suspended, upon entering into a good behaviour bond which included a condition that he complies with his obligations to the liquidator. ASIC Commissioner Greg Tanzer said, 'If a company is placed into liquidation, the company officers and other related individuals have a statutory obligation to provide assistance to the liquidator. This is an important part of maximising the opportunity for returns to creditors and identifying any misconduct which may have contributed to the company's collapse. 'ASIC will act against company directors and other officeholders who fail to meet their obligations once a company has been placed into liquidation', Mr Tanzer said. In 2014–15, ASIC successfully prosecuted 355 individuals for 680 offences relating to this type of misconduct, resulting in fines of approximately $915,000."
Palmer rebuffed by administrator: no funds to pay workers’ dues The Australian, Sarah Elks, 8 February, 2016 "The administrators hand-picked by Clive Palmer to rescue his troubled nickel refinery have hit back at the MP’s claims they are to blame for failing to pay 237 sacked workers their redundancy entitlements. In an interview with The Australian, FTI Consulting’s John Park said there was not enough money in Queensland Nickel’s coffers for administrators to pay the $16 million owing in redundancy entitlements. “The cash flow at the commencement of administration was certainly not sufficient for the administrators to discharge (the entitlements of redundant workers),” Mr Park said. It would have been our clear desire to do that immediately but the fact is Queensland Nickel did not have the money to discharge the entitlements.” FTI Consulting was appointed as voluntary administrators to the Townsville refinery’s operating company, Queensland Nickel Pty Ltd, on January 18. The appointment came just one business day after QNI’s sole director Clive Mensink, Mr Palmer’s nephew, sacked 237 workers. Some veteran employees are owed more than $300,000 in entitlements. QNI collapsed into administration owing in excess of $100m: $16m to redundant workers, about $14m in entitlements to the 550 continuing staff, $20m to rail company Aurizon, another $50m to other unsecured trade creditors, and about $2.6m to Mr Palmer for paying workers’ Christmas wages...."
ASIC disqualifies Melbourne director ASIC Media Release 15-403MR, 21 December 2015 "ASIC has disqualified Mr ... of Melbourne from managing corporations for three years following his involvement in the failure of 13 companies. The disqualification commences on 17 November 2015 and ceases 16 November 2018. The disqualification follows an ASIC investigation into Australian Style Investments Pty Ltd ACN 109 510 198 which found that Mr ... breached his duties as a director and that he failed to hold adequate records to explain the financial position of the company. Mr ... was the director of: .... (11 companies named). Each of these companies were placed into liquidation between 4 February 2010 and 19 May 2014. Across the 13 companies, liquidators reported that the total deficiencies owed to creditors exceeded $25 million...."
Enforceable Undertaking for NSW liquidator after failure to discharge duties ASIC Media Release 15-396MR , 18 December 2015 "ASIC has accepted an enforceable undertaking (EU) from Sydney-based registered liquidator, Adam Edward Patrick Farnsworth, after an ASIC review of several external administrations found he had failed to adequately discharge his duties. Mr Farnsworth is a partner of the firm Farnsworth Shepard .... ASIC reviewed several of Mr Farnsworth's external administrations and found he had failed to adequately discharge his duties in that he: (1) failed to recognise a relatively large value of referrals to him from one work referrer might lead to concerns about his independence and impartiality. He should not have accepted those appointments. (2) failed to make reasonable efforts to obtain the books and records of companies he externally administered as liquidator; (3) did not undertake investigations to the standard expected of a reasonably competent liquidator; (4) failed to highlight in a report to creditors, to the standard expected of a reasonably competent liquidator, that a person who referred work to Mr Farnsworth may have benefited from a voidable transaction; (5) should not have admitted various related-party proofs of debt for voting purposes, and; (6) did not document his adjudication of proofs of debt for distribution purposes. Not each and every one of ASIC's views apply to all of the external administrations reviewed.... ASIC acknowledges Mr Farnsworth's cooperation."
ASIC disqualifies Melbourne director ASIC Media Release 15-370MR, 7 December 2015 "ASIC banned Mr John Stephen Paulding of Melbourne from managing corporations for five years following his involvement in the failure of three companies. The ban follows an ASIC investigation which found Mr Paulding breached his duties as a director. Mr Paulding was the director of Paulding Constructions Pty Ltd ACN 052 834 661(Paulding Constructions) a construction company based in Victoria from 4th July 1991 until it went into liquidation on 30 November 2009. Mr Paulding was also the director of Port Phillip Property Group Pty Ltd ACN 077 002 656 and Kingtoun Pty Ltd ACN 104 845 356 which were both placed into liquidation in May 2010. The failures resulted in deficiencies owed to creditors across the three companies which totalled over $3.5 million. ASIC found that Mr Paulding: (1) Failed to exercise his duty to act in good faith in the best interest of Paulding Constructions or for a proper purpose; (2) On winding up Paulding Constructions did not produce books to its current liquidators as he was required to do; and (3) Concealed and removed assets of Paulding Constructions so that they were not readily realisable by the current liquidators...."
ASIC accepts Enforceable Undertaking from South Australian liquidator ASIC Media Release 15-369MR , 7 December 2015 "ASIC has accepted an enforceable undertaking (EU) from Adelaide-based registered liquidator, Anthony Christopher Matthews, of accounting firm, Anthony Matthews & Associates. ASIC reviewed Mr Matthews’conduct as voluntary administrator of Sapphire (SA) Pty Ltd ACN 076 858 029 formerly trading as River City Grain Co. and formed the view that that he had failed to: (1) identify possible insolvent trading claims against Sapphire’s holding company and/or ultimate holding company; (2) investigate a deed of settlement compromising debts; (3) investigate unrelated debts assigned for one cent in the dollar; (4) investigate differences in the value of stock as at key dates; and (5) investigate the attempted assignment of two sales contracts. ASIC also found that Mr Matthews did not properly and adequately document his investigations, provide an adequate report to creditors and report possible director misconduct to ASIC.... ASIC acknowledges Mr Matthews' cooperation in resolving this matter."
Bankrupt pleads guilty to three offences under the Bankruptcy Act AFSA (NSW), Media Release, 2 December 2015 ".... Mr Denis John Hull was sentenced in the Downing Centre Local Court on 24 November 2015 following a guilty plea being entered to having disposed of property within 12 months prior to becoming a bankrupt with intent to defraud his creditors and to having made a false declaration on his Statement of Affairs. ... Mr Hull was sentenced and was ordered to enter into a 2 year good behaviour bond in the amount of $200 with nil conviction to be recorded pursuant to Section 19B(1)(d) Crimes Act 1914. Magistrate Milledge noted that no restitution order would be made as this was being taken care of...."
Sydney chef convicted of dishonestly using her position as director ASIC, Media Release, 15-351MR, 23 November 2015 "Sydney-based chef Nicole Annette McIlwaine has been convicted of dishonestly using her position as director with the intention of causing detriment to a company. An ASIC investigation found that Ms McIlwaine dishonestly obtained $62,151.68 from the sale of a leasehold held by her company Stockmarket Cafe Pty Limited, at a time when she had stated she was aware that the company would be liquidated and that the money should be used to pay company creditors. As a result no funds were recovered by the liquidator and no funds were returned to the principal creditor, the Australian Tax Office. Ms McIlwaine was convicted ex-parte of the offence and on 17 November 2015 the conviction was confirmed and she was sentenced to a $500 two year good behaviour bond...."
ASIC reports on corporate insolvencies 2014–15 ASIC Media Release 15-337MR, 17 November 2015 "ASIC today published its annual overview of corporate insolvencies based on statutory reports lodged by external administrators for the 2014–15 financial year.... The report summarises information from 8,354 reports that ASIC received from external administrators during the 2014–15 financial year and includes ASIC's response to their reports of alleged misconduct.... Consistent with past reports, REP 456 shows small to medium size corporate insolvencies again dominated external administrators’ reports. Of note, 85% had assets of $100,000 or less, 79% had less than 20 employees and 43% had liabilities of $250,000 (or less). 97% of creditors in this group received between 0–11 cents in the dollar, reflecting the asset/liability profile of small to medium size corporate insolvencies...."
Former bankrupt Figgins pleads guilty to six offences under the Bankruptcy Act AFSA (Vic), Media Release, 30 October 2015 "Jeffrey Donald Figgins, was prosecuted in the Melbourne Magistrates Court on 29 October 2015 for making a false declaration in his statement of affairs, failure to comply with a notice to produce books and records and obtaining credit without disclosing his bankruptcy.... In his statement of affairs form, Mr Figgins failed to declare his (a) use of two motor vehicles registered to his wife’s name; (b) ownership of a house property; (c) interest in a forestry managed investment scheme; (d)the sale, transfer or gifting of assets, including two units, 3 boats, and 3 vehicles including a Ferrari; and (e) all his creditors... Mr Figgins pleaded guilty to six offences under the Bankruptcy Act and was convicted and fined a total of $16,500 and ordered to pay statutory costs...."
Former Kleenmaid director jailed ASIC Media Release 15-283MR, 2 October 2015 "Former Kleenmaid director Gary Collyer Armstrong today was sentenced to 7 years jail for his role in the collapse of the national whitegoods distributor. In August 2015 Mr Armstrong pleaded guilty to insolvent trading and fraudulently obtaining $13 million from Westpac (refer: 15-225MR). Appearing before Brisbane District Court, Mr Armstrong was sentenced to 7 years jail for one count of dishonestly obtaining $13 million from Westpac (to be eligible for release on parole after 2 years and 4 months) and 2 years and 8 months for two counts of insolvent trading (with a recognisance release order after 10 months on a 5 year good behaviour bond). The sentences are to be served concurrently which means Mr Armstrong will not be eligible for parole until 2 February, 2018...."
Justice Dept. Shift on White-Collar Crime Is Long Overdue The New York Times, William D. Cohan, 11 September 2015 ".... After stating that fighting white-collar crime remains a priority for the Justice Department, Ms. Yates [deputy attorney general of the United States] wrote in her memo that “one of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing. Such accountability is important for several reasons: It deters future illegal activity, it incentivizes changes in corporate behavior, it ensures the proper parties are held responsible for their actions, and it promotes the public’s confidence in our justice system.”..."
Surfwear chain Quiksilver collapses, files for bankruptcy in US The Australian, Eli Greenblat, Senior Business Reporter, Melbourne, 9 September 2015 "Ailing surfwear retailer Quiksilver says its Australian operation continues to be “strong on its own’’ and won’t be affected by the bankruptcy of its US-listed parent Quiksilver Inc. Quiksilver president and former AFL footballer Greg Healy said the company’s European and Asia-Pacific businesses — which include its Australian stores and stock on the shelves of retailers — are not part of the chapter 11 filing completed today in the US. Business would continue for Quiksilver’s operations in Australia and New Zealand, where it has 40 stores and employs around 230 people...."
Quadrant Court Further Defines Creditor Derivative Standing for Breach of Duty Claims The National Law Review (US), 4 September 2015 "The Delaware Court of Chancery recently held that, for a creditor to have standing to bring a derivative breach of fiduciary duty action, the creditor need only establish that the corporation was insolvent at the time the creditor’s action was filed—not that the corporation continued to be insolvent until the date of judgment. Further, the creditor need only establish that the corporation was “balance sheet insolvent,” rather than meeting the more rigorous “irretrievably insolvent” standard ...
UK Insolvency Service - Enforcement outcomes 2014/15: top bracket disqualifications Insolvency Service Stakeholder Newsletter, 13 August 2015 "Some 10% of director disqualifications are for more than 10 years but what sort of conduct leads to the highest tariff bans? This can vary widely according to the facts of each case as the recent cases we outline below demonstrate. A recurring reason why a director can find themselves on the wrong end of a high tariff ban is involving their company in a VAT fraud. One director of a mobile phone and computer component wholesaler was disqualified for 13 years for engaging in a scheme linked to VAT fraud and making wrongful VAT reclaims against HM Revenue & Customs, resulting in a claim in the liquidation proceedings by HMRC of over £91 million...."
LGL Commodities’ Michael Long helps unravel mystery over BMW car The Weekly Times, Peter Hemphill, 15 July 2015 "THE liquidator for collapsed grain trader LGL Commodities has found a BMW car which mysteriously disappeared out of an auction house’s yard, a court has heard. But it took an examination into the company’s affairs before the Supreme Court of Victoria to get to the bottom of the matter. LGL Commodities collapsed in June last year, with more than 100 creditors owed about $11.8 million. The car was a $50,000 black BMW 520d used by the grain trader’s managing director Michael Long. Mr Long took the witness stand today to answer questions in relation to the collapse of LGL. The court heard the BMW was bought in 2013 when LGL traded in a Lexus car previously used by Mr Long. Mr Long was quizzed by barrister Carl Moller for liquidator Pitcher Partners as to why he bought a BMW...."
ASIC tackles phoenix firms, seeks reforms The Australian ,Annabel Hepworth', National Business Correspondent, 13 July 2015 "The corporate regulator is seeking law reforms to make it easier to prove illegal “phoenixing” that costs the economy up to $3 billion a year. The Australian Securities & Investments Commission has conceded there are evidentiary difficulties in proving illegal phoenix activity, where companies are deliberately wound down to avoid paying creditors, tax and other liabilities, but then reappear anew in a “risen” company. Illegal phoenix activity has been estimated to cost between $1.78 billion and $3.19bn a year...."
ASIC forced to wind up 31 abandoned companies in the past year SmartCompany, Eloise Keating, 3 July 2015 "Australia’s corporate watchdog used its wind-up powers to appoint liquidators to 31 abandoned companies in the 2014-15 financial year, in a bid to help almost 100 employees access almost $1 million in unpaid entitlements. The Australian Securities and Investments Commission revealed on June 30 it had recently appointed liquidators to 12 abandoned companies that owe at least 42 employees more than $335,000 in entitlements .... ASIC had already used its wind-up powers to appoint liquidators to 19 other companies since July 2014. Combined, the 31 companies owed 98 employees more than $995,000 in entitlements...."
After going into voluntary administration, Alphatise has been sold to one of its founders Business Insider Australia, Alex Heber, 29 June 2015 "After plunging into voluntary administration earlier this year, online e-commerce play Alphatise Limited has been sold to a company run by an original Alphatise director, Paul Pearson. In a letter to creditors obtained by Business Insider, administrator Deloitte confirmed the business and its assets were sold to Alphatise Australia on June 23 after an expression of interest process was run since March. Earlier this financial year, Alphatise was running at a $3.2 million loss having generated $278,566 in revenue. Last financial year the company earned $9,211 and posted a loss of $1.07 million...."
BBY liquidator may seek funds to pursue directors The Sydney Morning Herald, Business Day, Joyce Moullakis, 22 June 2015 "The new liquidator of BBY may ask the corporate regulator to finance its attempts to pursue the recovery of funds from directors of the collapsed firm, after it was revealed creditors and clients were owed more than $40 million. On Monday, KPMG transitioned from administrator of BBY to liquidator of four operating entities, and outlined that debts owed to lender St George Bank were $13 million. Other secured creditors including lessors were likely owed more than $3 million, while unsecured trade creditors had $8 million owing. BBY's collapse last month also left 180 employees $2.7 million out of pocket. Clients faced a combined shortfall of $16 million in their accounts...."
The case that underlines need for insolvency ombudsman London Evening Standard, Chris Blackhurst, 17 June 2015 "A little-noticed disciplinary finding by the Institute of Chartered Accountants is provoking shock in that normally calm profession. The ICA has issued a fine of £250,000 and ordered payment of costs of £95,000 against Ernst & Young, and a “severe reprimand” and fine of £15,000 against one of the country’s most high-profile insolvency practitioners, Maggie Mills of the firm (now EY). The case relates to the controversial collapse of Greek telecom giant Wind Hellas in 2009. Why controversial? It was the biggest “pre-pack” sale in Europe — by insolvency practitioners, disposing of the business before the ink is dry on their appointment — and the operation had been imported from Greece to the UK presumably to use our insolvency laws to achieve a quick done deal...."
Companies Auditors and Liquidators Disciplinary Board (CALDB) admonishes Queensland liquidator ASIC Media Release 15-159MR, 26 June 2015 "ASIC notes the decision by disciplinary body, the Companies Auditors and Liquidators Disciplinary Board (CALDB), to admonish a Queensland-based registered liquidator. The decision follows an ASIC investigation into Jonathan Paul McLeod, principal of insolvency firm McLeod & Partners Pty Ltd. ASIC’s investigation focused on Mr McLeod’s conduct as a liquidator and a voluntary administrator...."
Hellas liquidator to push Ernst and Young for compensation over botched administration accountancyage.com, Richard Crump, 17 June 2015 THE LIQUIDATOR of failed Greek company Hellas Telecommunications is planning to pursue EY for some of the millions of pounds it received in fees for handling the administration, after the Big Four firm was fined and reprimanded over a conflict of interest when it was appointed administrator. EY and one of its partners, Margaret Mills, were fined and severely reprimanded by the ICAEW over a failure to declare a conflict of interest when appointed administrator of Hellas Telecommunications II and its subsidiary Wind Hellas in 2009...."
Collapsed Building Firm Had Been Insolvent for Over a Year sourceable.net, Ahn Jae Wook, 16 June 2015 "A building firm which collapsed owing unsecured creditors around $8.5 million may have been trading whilst insolvent for almost a year, the company’s administrators say. In its report into the affairs of Perth based Capital Works Construction Pty Ltd and its related labour hire firm Capital Construction Hire Pty Ltd, Deliotte Restructuring Services Administrators Jason Tracy and Gary Doran indicated whilst the final issue of insolvency would have to be ultimately decided upon by the courts, it appeared that the companies had incurred substantial trading losses in recent years and had most likely been insolvent since June 2014. “On the basis of our preliminary investigations, it appears that the Companies may have been insolvent from at least 30 June 2014 based on the continued trading losses, significant trade creditor debts outside of terms of trade, working capital deficiency, net asset deficiency and the Companies’ failure to meet statutory payment requirements” the administrators said in their report...."
U.S. Supreme Court bars some fees sought by bankruptcy lawyers reuters.com, Tom Hals, 15 June 2015 "The U.S. Supreme Court ruled on Monday that bankruptcy attorneys must bear the expense of defending their fees, which could make it harder for lawyers to get paid for their often-costly Chapter 11 work.... In an 13-page opinion written by Justice Clarence Thomas, the work of Baker Botts was compared to that of a car mechanic. A car mechanic could charge for preparing an itemized bill but "it would be less natural to describe a subsequent court battle over the bill as part of the 'services rendered' to the customer," Thomas wrote. Therefore, Baker Botts, like the car mechanic, should have to pay to defend the bill, Thomas added...."
ASIC scores as court replaces Planet Platinum administrator The Australian, Ben Butler, 15 June 2015 "The corporate watchdog has succeeded in changing the management of listed strip club operator and brothel landlord Planet Platinum. Supreme Court of Victoria judge John Efthim has thrown out an administrator appointed by the company’s chairman, John Trimble, the nephew of late crime boss Robert Trimbole, and Mr Trimble’s son Michael. Associate Justice Efthim ordered Gideon Rathner, of Lowe Lippman, removed and John Lindholm, of Ferrier Hodgson, appointed as provisional liquidator to control the company, which runs the Showgirls Bar 20 strip club on Melbourne’s King Street and is the landlord of brothel Daily Planet in suburban Elsternwick. The judge said evidence given by Mr Rathner about John Trimble’s trustworthiness was “concerning” because he appeared to “change his position from being sceptical to accepting at face value the word of Mr Trimble”. Mr Rathner was criticised by counsel for the Australian Securities & Investments Commission last week for giving unresponsive and dissembling answers under cross examination...."
Court appoints provisional liquidator to Planet Platinum following ASIC application ASIC media release 15-146MR, 15 June 2015 "Following a successful ASIC application, the Supreme Court of Victoria has ordered the appointment of Ferrier Hodgson partner John Lindholm as provisional liquidator to Planet Platinum Limited.... On 12 June 2015, the Supreme Court of Victoria ordered Mr Lindholm to provide a report to the court and ASIC within 28 days reporting on matters, including issues of concern raised in ASIC’s evidence, the provisional liquidation of Planet Platinum, identification of its assets and liabilities, an opinion as to the company’s solvency, and any other information necessary to enable the company’s financial position to be assessed. ASIC’s investigation into the affairs of Planet Platinum is continuing...."
BBY was ‘trading insolvent’ for a year The Australian, Business Review, Andrew White and Andrew Main, 13 June 2015 "Stockbroker BBY may have been trading while insolvent since June 2014, around the same time administrators believe there could have been misuse of client funds and misleading information provided to banker St George. In explosive findings that are likely to make uncomfortable reading for BBY’s directors, the ASX and the corporate regulators, the administrators said clients caught up in the insolvency were likely to be short $10 million, while unsecured creditors were expected to receive no more than 24c in the dollar and possibly nothing. In an initial report to creditors released last night, KPMG partners Stephen Vaughan and Ian Hall said BBY’s financial records may not have been maintained in compliance with the Corporations Act and that a number of related party transactions required further investigation...."
Fairfax Media's valuable photo archives under threat after Rogers Photo Archive goes into receivership www.abc.net.au, by North America correspondent Lisa Millar, 8 June 2015 "It seemed like a brilliant deal for Fairfax Media, which had to find a way to save its valuable archival photos from deteriorating but could not spend a fortune doing it. Rogers Photo Archive in Little Rock, Arkansas, offered the solution. That company would digitise the photos, add metadata for easy searching and then return an online accessible version to Fairfax — taking an ageing and deteriorating archive and giving the cash-strapped media company a digital library in return. For its efforts Rogers Photo Archive would be able to sell the originals and make a profit. Except it did not...."
RAM investor fights for name suppression, before first clawback decision www.nbr.co.nz, Suze Metherell, 3 June 2015 In New Zealand "A Ross Asset Management investor, who was able to withdraw $954,000 from RAM's Ponzi-style scheme before it collapsed, is fighting to keep name suppression ahead of a High Court decision on whether liquidators can claw back funds for unpaid investors. Appearing in the Court of Appeal before Justices Rhys Harrison, Forrest Miller and Mark Cooper, Justin Smith QC argued his client sought name suppression owing to his concerns about undue media attention and public scrutiny of his investment, while other investors who had also withdrawn money still had suppression. In March, Justice Alan Mackenzie in the Wellington High Court heard the investor withdrew $954,000 from the RAM group in 2011, having originally invested $500,000 in November 2007, using a bank loan...."
Four times bankrupt fails to declare sale of cars in Statement of Affairs declaration Australian Financial Security Authority, media release, 1 June 2015 "Four times bankrupt, Mr Mark Anthony Milland was convicted and fined $3,000 in the Perth Magistrates Court on May 25, 2015 for failing to disclose to his trustee in his fourth bankruptcy the sale of four vehicles, which ranged in value from $1,500 to $4,000 .... Magistrate Cicchini found Mr Milland guilty of one offence of the Bankruptcy Act 1966, and ordered Mr Milland to pay a fine of $3,000 and costs of $1,387...."
120 staff at failed stock broker BBY made redundant The Australian, Christine Lacy and Andrew Main, 27 May 2015 "Staff at failed broker BBY were last night made redundant, with a letter of termination delivered to the firm’s 120 staff just after 5pm. A week after the broker’s collapse, administrator Stephen Vaughan, of KPMG, told staff in the termination letter that all roles with the BBY group of companies had been shut down. “After completing a consultation process over the course of the administration a decision has been taken by the companies to terminate your employment with immediate effect, ” Mr Vaughan told staff. He said the decision followed a “review of the companies’ business, operations and affairs”...."
Thousands of insolvent businesses could be saved with new safe harbour laws, says liquidator Smart Company.com.au, Kirsten Robb, 26 May 2015 "Around one-third of businesses liquidated could be saved and billions of dollars recovered for the Australian economy if the government adopts draft safe harbour recommendations from the Productivity Commission, according to registered liquidator Sean Wengel. Wengel, an insolvency principal at financial advisory firm William Buck, this morning told SmartCompany the safe harbour provisions recommended in the Productivity Commission’s draft report on the barriers of setting up and closing a business have the potential to save up to 3000 insolvent business from being liquidated. The recommendations would see a provision for a 'safe harbour' to allow company directors to explore restructuring options without personal liability for insolvent trading, which is currently a significant disincentive for directors. “The current insolvency trading laws essentially incentivise terminating a struggling business rather than encouraging its resurrection,” Wengel says...."
How can a landlord best protect their rights from an insolvent tenant Kott Gunning, Lawyers, Kellie Cook, 25 May 2015 ".... When entering into negotiations for a lease, Landlords should always consider what security they want from any incoming Tenant. Since the introduction of the PPSA, Landlords should now consider the type of security they want in light of the implications of the PPSA...."
George Alex's bankruptcy trustees claim millions linked to slain standover man The Age, Rania Spooner and Beau Donelly, with Chris Vedelago, 24 May 2015 "The bankruptcy trustees of underworld construction identity George Alex have moved to claim more than $12 million tied up in deals struck amid allegations of businessmen being bashed, drive-by-shootings and extortion linked to Melbourne gangland figures. The cash targeted includes a $6 million defamation payout to Mr Alex and his murdered standover man Joseph Antoun, which was an alleged sham created for Mr Alex's troubled business rivals to buy him out of their labour hire companies. Proceedings launched by Mr Alex's trustees in the Federal Court in Victoria claim the defamation settlement was in effect payment for the sale of his business interests, and disguised to bypass bankruptcy laws, which make defamation payouts untouchable by trustees. The payout was significantly higher than the record set by a court in defamation claims in Australia...."
ASIC intervenes in court proceeding against liquidator accountantsdaily.com.au, 18 May 2015 "ASIC has intervened in a private court proceeding in which allegations of improper conduct were made against a registered liquidator. In 2006, small business owner John Viscariello commenced proceedings against Peter Ivan Macks in his capacity as liquidator of two companies, Bernsteen Pty Ltd and Newmore Pty Ltd. In December 2014, the chief justice of the Supreme Court of South Australia, Chris Kourakis, made various declarations, including that Mr Macks, in his capacity as liquidator of one of the companies, failed to exercise the degree of care and diligence required of him as an officer of the company; failed to exercise his powers and discharge his duties in good faith and in the best interests of the company; and engaged in litigation to gain an advantage for himself to the detriment of the company...."
Altona Meadows travel agency CTS Travel placed into liquidation Hobsons Bay Leader, Fiona O’Doherty, 14 May 2015 "ANGRY holiday-makers have had travel plans cancelled and been left thousands of dollars out of pocket after an Altona Meadows travel agency was placed into liquidation. CTS Travel, at Central Square shopping centre, has been placed in the hands of a Queensland liquidator, Robson, Cotter Insolvency Group. Customers were surprised to see a handwritten sign in the window of the travel agency last week stating the business was relocating but with no further contact details. A new sign has since appeared advising the business is in the hands of liquidators. Student Paige Toner estimated she and her boyfriend were short $9000 for flights and accommodation for a US holiday paid in cash to the agency, for which the agency issued receipts and an itinerary...."
Company officials jailed for contempt relating to £7.7m fraud insidermedia.com/insider/north-west, 13 May 2015 "Three officials of a Wilmslow-based company have been jailed for contempt of court relating to a £7.7m VAT fraud. In March 2014, a court order appointing a provisional liquidator was made by the High Court against Parkwell Investments. The order removed the company's officers and appointed a provisional liquidator to protect its remaining assets. Following an investigation by HM Revenue & Customs (HMRC), a judgement by Mr Justice Norris in the High Court on 7 May 2015 determined that the actions of Amran Munir, Ali Sami Farooq, and Saif Chaudhry constituted a contempt of court. It found that the company's officers deliberately and knowingly acted in contempt of court by transferring £450,000 out of the reach of the provisional liquidator, depriving the company of assets that could have been used to pay creditors such as HMRC. The funds are now reported to be very unlikely to be recovered, a point which presiding Judge Mr Justice Norris took into consideration when sentencing. He said the company officers' actions "were an affront to the rule of law and order"...."
Serious Financial Crime Taskforce Media Release, The Hon. Joe Hockey, MP, 5 May 2015 "The Commonwealth Government is establishing a new taskforce to fight serious and organised financial crime. This type of crime poses a genuine threat to national security and to the integrity of Australia’s economy, financial markets, regulatory frameworks and tax revenue collection. The Government will provide $127.6 million over four years for investigations and prosecutions that will address superannuation and investment fraud, identity crime and tax evasion. ..."
Seaplane business grounded as Tasmanian Air Adventures goes into liquidation News abc.net.au, 5 May 2015 "Tasmanian Air Adventures, which runs the seaplane operation out of the Hobart waterfront, has been placed in liquidation. The seaplane had become a fixture of the city, offering scenic flights and charter tours using the River Derwent as its airstrip. The YKYMF Group Pty Ltd, which trades as Tasmanian Air Adventures, announced today the company was in creditors' voluntary liquidation.... "
Conditional Fee Arrangements continue for insolvent companies Lexology.com, RPC Finance, UK, Alexandra Anderson, 30 April 2015 "In April 2013, the (UK) Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) came into force, making the success fee applied to a Conditional Fee Arrangement (CFA), and the After the Event (ATE) insurance premiums, irrecoverable by a successful party to litigation proceedings. However, under article 4 of LAPSO, there is an "insolvency exemption" making these costs recoverable by an insolvency practitioner. The reason given for this exemption was that, if an insolvent company is left with no assets, and consequently no funds, it is impossible for an insolvency practitioner to investigate directors' and third parties' conduct or to fund litigation. This means that, if directors strip companies of their assets prior to liquidation, the insolvency practitioner when appointed will have insufficient funds to investigate any misconduct on the part of the directors. As a result of the exemption, an insolvency practitioner can still instruct a solicitor on a CFA, or "no win, no fee" agreement, with ATE cover in place, and can recover any uplift and premium from the defendant.... "
Insolvent trading: directors don’t always know best Lexology.com, McInnes Wilson Lawyers, alicia Hill, 29 April 2015 "Directors of an insolvent company face a strict duty not to allow their company to trade whilst insolvent. Whilst there are exceptions and defences available for directors, the recent case of Smith v Bone [2015] FCA 319 demonstrates that: a director will not easily be excused, especially where they fail to seek advice on the company’s solvency in circumstances which would warrant such an enquiry; and that directors should not assume that simply entering into certain arrangements with creditors is enough to prevent them being liable for insolvent trading...."
A year on, Dataflex's $10.7m debt goes unpaid. Liquidator mulls new legal challenge. cm.com.au, Steven Kiernan, 28 April 2015 "A year after one of the most high-profile channel collapses in recent memory, the liquidators have shed more light on the fall of Dataflex. The Canberra-based reseller, which collapsed after 27 years in business, left more than $10 million in debts to trade creditors and employees. The list of creditors in the report by insolvency practitioner RSM Bird Cameron reads like a sombre who's who of the Australian IT industry...."
Liquidator tax obligations case – appeal granted Minter Ellison, Lawyers, David Pratley, 24 April 2015 "The High Court has granted special leave to appeal the decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq), which held that a liquidator is not required to retain funds from the proceeds of sale of an asset to pay tax before an assessment is issued. Regrettably, the tax obligations of insolvency practitioners will continue to be uncertain for some time. It will likely be at least 12 months before the High Court hands down its decision on the appeal. If the appeal is allowed it would generally have retrospective application. Hence practitioners that rely on the Full Federal Court decision in releasing funds could be exposed to the risk of personal liability ....
ASIC reports on supervision of registered liquidators for 2014 Australian Securities and Investments Commission, Media Release 15-080MR, re Report 430, 16 April 2015 "ASIC today released its annual report for the 2014 calendar year into the supervision of registered liquidators. Report 430, ASIC regulation of registered liquidators: January to December 2014, details the supervisory, enforcement, stakeholder liaison and educative work ASIC undertook in its commitment to continue improving regulation of the insolvency and restructuring sector...."
Shadow director caught under insolvent trading provisions Corrs Chambers Westgarth, David Abernethy, Matthew Critchley, Jason Salman , John Stragalinos, Kirsty Sutherland and Mark Wilks, 10 April 2015 ".... The decision in this case confirms that the Court will take a substance over form approach in determining whether someone is a shadow / de facto director. The Court will look behind written agreements and ASIC records to uncover the true position as to whether or not a person is acting as a director. The Court will look at the conduct of the person in question, whether the person is performing the functions expected to be performed by a director and whether the person has sufficient influence to control the acts of the other directors of the company."
ASIC accepts Enforceable Undertaking from Western Australian liquidator ASIC Press Release, 14 April 2015 "ASIC has accepted an enforceable undertaking (EU) from Perth-based registered liquidator, Ross Stephen Thomson. ASIC looked at Mr Thomson’s handling of three external administrations and found he failed to properly investigate the affairs of the companies, withdrew approximately $24,200 in remuneration not properly approved, failed to secure assets in a timely manner, did not adequately record his work, and failed to lodge documents with ASIC...."
Landmark ruling on rights of liquidators: Court of Appeal clarifies powers to grant release of audit documents The Straits Times (Singapore), K.C. Vijayan, Senior Law Correspondent, 10 April 2015 "SINGAPORE'S highest court has issued a landmark ruling on the rights of liquidators to gain access to documents as they probe details of a corporate collapse. Auditing giant PricewaterhouseCoopers (PwC) has failed in an appeal to stop access to documents by a liquidator investigating the failure of Singapore-listed China firm Celestial Nutrifoods. The Court of Appeal in a rare judgment of this type clarified the court's powers to grant orders under the relevant provision of the Companies Act. Lawyers say the ruling will strengthen corporate governance practice here...."
Assigning your rights away – changes to the Insolvency Act 1986 Charles Russell Speechlys LLP, Prav Reddy and Jessica Lorimer, United Kingdom, 8 April 2015 "The Small Business, Enterprise and Employment Act 2015 (“the Act”), which received Royal Assent on 26 March 2015, contains a number of changes and additions to the Insolvency Act 1986 (“IA 1986”). A summary of the changes, as they relate to insolvency proceedings, are highlighted below but for full details as to the newest additions to the IA 1986, please see s117 to s146 of the Act .... ASSIGNMENT OF CAUSES OF ACTION VESTED IN THE OFFICE-HOLDER .... CLAIM FOR WRONGFUL TRADING AND FRAUDULENT TRADING BY ADMINISTRATORS .... OTHER CHANGES ...."
Director was 'reckless' but liability is nil The New Zealand Herald, Hamish Fletcher, 2 April 2015 "A former Forsyth Barr broker on the board of a failed internet provider acted recklessly but does not have to pay anything to the company's liquidators, a High Court judge has ruled. Another director and shareholder of the firm, however, has been deemed personally responsible for the failed firm's $1.1 million of debt. Auckland's NZNet - which claimed to be the first internet service provider in New Zealand - ceased trading in November 2011, more than three years after the point liquidators believed it would have failed the solvency test...."
Former head of failed Knights Insolvency faces further charges The Courier-Mail, Anthony Marx, 26 March 2015 "The times just keep getting tougher for the man who once ran Brisbane’s now-failed Knights Insolvency. Trevor John Schmierer was back behind bars yesterday at Arthur Gorrie Correctional Centre, where is he is believed to be on remand facing further fraud charges. It’s understood this latest case centres on more than $500,000 allegedly misappropriated from self-managed super fund investors tipping money into American real estate. The now-bankrupt bizzoid was a predictable no-show yesterday in Brisbane Magistrate’s Court, where he got slapped with a small fine after pleading guilty in absentia to two charges related to audit record keeping. The irony of the ATO bankrupting Schmierer over more than $960,000 in debts in mid-2013 was lost on no one. After all, he had previously managed one of the only insolvency firms to ever list on the ASX before its collapse in 2005...."
Billionaire racing, mining identity Nathan Tinkler avoids court questions over empire through 11th hour deal with liquidators The Australian, Sean Fewster (The Advertiser Chief Court Reporter), 25 March 2015 "EMBATTLED mega-millionaire miner and thoroughbred identity Nathan Tinkler has dodged examination over his racing empire thanks to an 11th-hour agreement with liquidators. Mr Tinkler and the directors of Patinack Farm were to be examined in the Supreme Court in Adelaide today over the collapse of Patinack Farm Administration. Liquidator Anthony Matthews wanted to examine Mr Tinkler, Hunter Sports Group chief executive Troy Palmer and Tony Marshall on oath about the thoroughbred stud’s dealings. Today, counsel for Mr Matthews said the parties had reached a “partial settlement” that meant today’s hearing was not needed and would, if “fully enacted”, cancel the examination altogether. Judge Graham Dart was unimpressed with the situation...."
Geoffrey Edelsten's Sonic deal better be nice at twice the price brisbanetimes.com.au, CBD, 25 March 2015 "Let's hope Sonic Healthcare boss, Dr Colin Goldschmidt, really likes the medical centres it bought from disgraced former doctor Geoffrey Edelsten because it might have to pay for them twice. The bad news surfaced in court documents that shed new light on the sale that helped to re-establish Edelsten's lifestyle of baubles and babes...."
Improving communication with directors of firms in liquidation Australian Securities and Investments Commission, Notice of Report 428, 18 March 2015 "This report was commissioned by ASIC and produced by Queensland Behavioural Economics Group (QuBE). It sets out the results of research altering letters sent to directors of firms in involuntary liquidation to encourage them to comply with their legal obligations to report information to their liquidators. This paper explores ways to increase compliance of directors of companies in liquidation with their legal obligations. Under sections 475, 530A, 530B, and 590 of the Corporations Act 2001, it is the legal duty of a company director to cooperate with a nominated liquidator if the company is in liquidation. In particular, directors have to: •report on the affairs of their company, •grant access to and hand over company books, •provide information regarding company property, and •assist the liquidator in all further matters."
Victorian Supreme Court declares enforcement of payment awards by insolvent contractors unconstitutional mondaq.com, HHG Legal Group, 16 March 2015 ".... In Hammersley Iron Pty Ltd v James [2015] WASC 10 Beech J of the WA Supreme Court may be said to have struck the right balance between the right of employees and subcontractors of insolvent head contractors, to be paid for the work they have done and the right of principals to prove and set off their counterclaims in the liquidation...."
Court orders $750,000 debt be repaid The New Zealand Herald, Hamish Fletcher, 23 March 2015 "A property developer's family trust that bought 9000sq m of land in an exclusive Queenstown subdivision must repay $740,000 to liquidators after losing a High Court fight that involved fraudulent changes to accounts. Businessman Chris James in 2006 set up a family trust which soon after bought a property in Jack's Pt, that calls itself an "emerging settlement and resort village" on the shores of Lake Wakatipu. One of his companies, James Developments (JDL), lent $740,000 to the trust to help with this purchase of the property. JDL went into liquidation three years later, owing at least $1.7 million. Shortly before liquidators were appointed, James amended the company's accounts so the $740,000 transaction was recorded as JDL repaying earlier advances rather than making a loan. The trust records were also amended to reflect this apparent situation, with the debt changed to be due to James personally...."
PPSA review calls for complete overhaul Banking Day, 20 March 2015 "The Review of the Personal Property Securities Act has recommended 394 changes to the controversial legislation, which is not meeting its goal of providing "more certain, consistent, simpler and cheaper arrangements for personal property securities." The review said the law, which came into effect in 2012, had improved consistency in secured transaction law but it acknowledged that the majority of submissions it had received emphasised that both the law and the operation of the Personal Property Securities Register were too complex and their meaning often unclear...."
Trustee’s right of indemnity unaffected by bankruptcy Corr Chambers Westgart, Lawyers, 6 March 2015 "In Condon (Trustee), in the matter of Rayhill (Bankrupt) v Truthful Endeavour Pty Ltd [2015] FCA 7, Condon, as trustee of the bankrupt estate of Colleen Ann Rayhill (known as Colleen Lewis), sought a declaration that various payments made in respect of a property (the Property) rendered Lewis a creditor of the Kenthurst Investment Trust (KI Trust).... This decision confirms that where payments are made by an undischarged bankrupt (in their capacity as trustee of a trust), prior to their bankruptcy and in order to satisfy personal liabilities, the bankrupt will be entitled to be indemnified out of the trust assets and that right will be secured by an equitable lien over those assets. This right of indemnity and the lien will then vest in the trustee in bankruptcy upon the making of a sequestration order."
230 actors lose money in agency liquidation performing.artshub.com.au, Thursday, 12 March 2015 "In what may be a test case for NSW Entertainment Industry Act, a Sydney actors' agency has gone broke leaving actors thousands of dollars out of pocket. The financially precarious actor’s life in the Australian film industry just got harder this month for hundreds of Sydney actors who were caught in the shock liquidation of Extras Agency Pty Ltd, sometimes known as Ken Shepherd Productions. Actors at a creditors’ meeting on Tuesday were told $140,000 owed to more than 230 actors by Channel 7, films such as Unbroken and production companies representing clients such as Armani and Telstra was unlikely to be ever paid....Liquidator Cliff Sanderson told ArtsHub that he had yet to finish his investigations so could not yet determine whether there would be legal action for the recovery of the funds. He said actors might do better to seek recompense from the original employer. ‘My suggestion is that they approach the production companies and see whether or not they can get their pay directly from them.’..."
Target Canada forced to halt fixtures sales during liquidation CBC News, Sophia Harris, 10 March 2015 "There’s another hiccup in Target Canada’s bumpy journey to the finish line. The company has been forced to halt sales of all of its store fixtures. "Due to issues raised by some of Target's landlords, we must temporarily cease selling FF&E [furniture, fixtures and equipment] until further notice," a March 9 company email informed various Target staff. The memo, obtained by CBC News, explains to staff, "Until these issues are resolved, all FF&E sales are on hold. No fixtures can be taken down or removed (whether they are purchased or not) from the store until further notice." A source involved in the case told CBC News that the landlords exercised an option under an existing court order to halt the sales. He says the dispute is over what fixtures can and cannot be removed from each individual store. As part of its all-items-must-go liquidation sale, locations had also been selling everything from store shelving to filing cabinets to the microwave and fridge in the staff room...."
Liquidators aren’t the problem Australian Restructuring Insolvency and Turnaround Association (ARITA), Charles Cuninghame, 9 March 2015 (Approx. 350 words) "ARITA CEO John Winter wrote the following letter to the editor in response to an article by Adele Ferguson in the Australian Financial Review ---- "Reform remains elusive for troubled insolvency sector" (9/3/15) sadly misrepresents the reality of what is happening in insolvency today. Corporate failure doesn’t happen because of liquidators. Liquidators are only called in once the damage has been done, and generally they are called in far, far too late. If directors sought earlier help and intervention, there would be more left for creditors or collapse could be avoided altogether. Blaming liquidators for insolvency is like blaming your GP for you getting a cold...."
Reform remains elusive for troubled insolvency sector The Sydney Morning Herald, Adele Ferguson, business columnist, 8 March 2015. (Approx. 1300 words) "Disgraced liquidator Stuart Ariff will be released on parole on March 25 after serving four years in jail on 19 counts of criminal fraud.... Ariff's impending release comes as the insolvency industry awaits the introduction of legislation designed to beef up the powers of the corporate regulator and better protect unsecured creditors, who in 97 per cent of company collapses receive less than 11¢ in the dollar...."
Commonwealth Director of Public Prosecutions (CDPP), Bankruptcy Act 1966, Instruction Number: 8 Graeme Davidson, Deputy Director, International Assistance and Specialist Agencies, last Update: 6 March 2015 "The Criminal Code was applied to offences in the Bankruptcy Act 1966 on 24 May 2001 (s7A). The Bankruptcy Act 1966 (‘the Act’) contains numerous offence provisions in respect of acts or omissions at different stages of a bankruptcy administration under the Act. The more commonly prosecuted offences under the Act are failing to make out and file a statement of affairs (s54(1)); disposing of property (s263); failing to disclose property (s265) and obtaining credit without disclosing bankruptcy (s269).... The Australian Financial Security Authority (AFSA), which is part of the Attorney-General’s portfolio, has primary responsibility for administering the Bankruptcy Act 1966. As part of this responsibility AFSA investigates breaches of the Act either using its own staff or by referring the case to the AFP for investigation. Officers of AFSA will act as informants in criminal proceedings against bankrupts or debtors in connection with estates administered by AFSA or by Registered Trustees where AFSA has investigated the matter. The AFP will act as the informant in respect of matters investigated by them. Registered Trustees who administer an estate should not be the informant against the bankrupt or debtor. Where a Registered Trustee considers that an offence under the Act may have been committed, he or she should refer the matter to AFSA which may refer the matter to the CDPP."
Directors held liable for employee benefits on insolvency Taylor Smart, Lawyers & Notaries, Legal Developments, Peter Nevin, 2 March 2015. (Approx. 580 words) "In a recent decision of the Federal Circuit Court, the directors of a series of liquidated companies were held liable to compensate a former employee of those companies for unpaid statutory entitlements and underpayments .... The applicant brought an adverse action application in the Federal Circuit Court against A1 Scaffold Group Pty Ltd, its officers and the officers of the various entities. In his application, the applicant argued that the matter was “a classic case of a phoenixing arrangement” where an entity is collapsed in a manner to deny unsecured creditors equal access to its assets, and parties related to the entity’s controllers commence another business within 12 months using some or all of the entity’s assets...."
NAB leaks: Senator's push for white collar royal commission gains steam The Sydney Morning Herald, Business Day, Adele Ferguson, 23 February 2015 "The Nationals senator who triggered a landmark senate inquiry into Commonwealth Bank of Australia and ASIC has submitted draft terms of reference for a royal commission into white collar crime to Treasurer Joe Hockey's office. It comes as the National Australia Bank became the latest financial institution to become embroiled in a financial planning scandal, which raises questions about the standard of advice and compensation paid to victims.... Senator John Williams said a royal commission should include the banks, liquidators, financial planners and financial products such as managed investment schemes and valuers...."
Not Everyone Is Happy That RadioShack Ran on Derivatives Bloomberg View, Matt Levine, 18 February 2015 ".... Once upon a time, operating RadioShack was a profitable business. But for the last two years, give or take, it has been a terrible business. For the first 10 months of 2014, just operating the stores has lost RadioShack something like $920,000 a day; for the last quarter for which we have results, it was about $1.1 million a day. Every day that RadioShack's managers opened up their stores, they lost the company more than $1 million. But every day they did it anyway...."
Personal insolvency investigation - appeal to public for information Australian Financial Security Authority (AFSA) Notice, 20 February 2015 "The Australian Financial Security Authority appeals to the public for information relating to fraud. The Australian Financial Security Authority (AFSA) is appealing to the public to come forward if they have any information relating to fraud by individuals through the creation of fictitious creditors, false caveats and mortgages used in personal insolvency agreements and bankruptcy administrations from 2010 until 2013. AFSA is an Australian Government agency which is responsible for the administration and compliance of Australia’s personal insolvency system. AFSA is working together with the Australian Federal Police (AFP) on several investigations in Melbourne involving such behaviour and it anticipates there may be more information about similar behaviour that the public may be able to provide. Please call 07 3360 5442 or email fraud.enquiries@afsa.gov.au if you have any information which may relate to these investigations. Please be assured that the AFP and AFSA treats contact from members of the public in confidence...."
Gold Coast chartered accountant sentenced following ASIC investigation ASIC Media Release, !5-031MR, 19 February 2015 " .... Mr Scott and Mr Dwyer ran a pre-appointment insolvency business on the Gold Coast between 2010 and 2012. Mr Dwyer created a fictitious identity - known as Mr Gary Edwards - and provided those details to Mr Scott who used the fictitious Mr Edwards to: •lodge false and misleading documents appointing Mr Edwards as a company director; •replace a real person acting in the role of director with the fictitious identity , and backdating the director appointment by 18 months, and •create other false corporate records using the fictitious identity including taxation and employment records. Mr Scott also used the fictitious identity to facilitate deeds of company arrangement for debts owed by three companies in external administration (collectively known as the Glowclose Group)...."
Court ruling on claw-backs welcomed. ‘Common sense’ decision may prevent liquidators from re-claiming payments. The New Zealand Herald - Business, Hamish Fletcher, 19 February 2015 "A Supreme Court ruling (in NZ) that clears up a contentious area of insolvency law could put a hand brake on liquidators trying to claw back funds from creditors paid out before a company collapses. One liquidator who was not involved in the case, Damien Grant, said yesterday's decision meant there would be less distributions from liquidations in the future. A lawyer who was on the losing side of the litigation, Kevin Bond, said directors of insolvent companies may now be encouraged to make preferential payments to creditors who have leverage over them. On the other hand, representatives of the construction industry hailed the Supreme Court's judgment as a "victory for common sense" that would come as a relief to "thousands of businesses"...."
ASIC accepts enforceable undertaking from Victorian liquidator ASIC Media Release 15-030MR, 19 February 2015 "ASIC has accepted an enforceable undertaking from Victorian liquidator, Colin Roland Tuckwell. The EU follows an ASIC surveillance into Mr Tuckwell’s handling of an external administration, Tarmack Pty Ltd (now deregistered), formerly trading as Yargici Accessories. ASIC found that Mr Tuckwell failed to properly investigate the affairs of the company, withdrew remuneration not properly approved, and failed to obtain a valuation for stock that he subsequently sold. In addition, ASIC found that he did not adequately record his work and failed to lodge documents with ASIC...."
Pie Face founder Wayne Homschek turfed from board as new management team seek to turn things around SmartCompany.com.au, Eloise Keating, 16 February 2015 "Pie Face co-founder Wayne Homschek has been ousted from the board of the company he founded more than 10 years ago, less than two months after the company emerged from voluntary administration.... Pie Face chairman Andrew Thompson told SmartCompany this morning Homschek resigned from his position as a non-executive director of the company’s board "with some encouragement" from shareholders during an extraordinary general meeting last Wednesday.... Thompson told the Australian today Pie Face is also considering a capital raise for later this year and has begun talks with US casino billionaire Steve Wynn, who launched a $20 million lawsuit against Pie Face last year, after investing $US15 million for a 43% stake in Pie Face’s US operations in 2012...."
Geoffrey Edelsten settles his bankruptcy, creditors get a few cents in the dollar The Sydney Morning Herald, Mark Hawthorne and Chris Vedelago, 9 February 2015 "Disgraced former doctor Geoffrey Edelsten has settled his bankruptcy case, with key creditors agreeing to take a few cents in the dollar to wipe out more than $20 million of accrued debt.... many of his creditors have agreed to accept a cash sum of just over $1 million to settle the matter. The Tax Office alone claims it is owed more than $14 million by him. According to sources close to the matter, the ATO may only recieve a few cents in the dollar if it agrees to take part in the deal. Fairfax Media understands the sweetheart deal comes after Edelsten reached a settlement with his former US business partners, the Mawardi family, who have been fighting him for control of a portfolio of international assets that included a fashion label, a Dominican Republic casino, a luxury jet and two slum housing complexes...."
Crooked insolvency practitioner fined economia.icaew.com Julia Irvine, 5 February 2015 "A (UK) insolvency practitioner overcharged three companies he was liquidating by more than £1.17m and then failed to pay the excess back despite a court order. As a result, Peter Yeldon was made bankrupt in April 2011 and his ICAEW membership ceased. But his case still came before a ICAEW disciplinary committee tribunal (DCT) which fined him £20,000 after finding two complaints against him proved. Yeldon, a former head of insolvency at Smith & Williamson, who had worked on major insolvency cases including the Maxwell offshore companies, was a founding partner of corporate recovery firm Middleton Partners (no longer trading) in Salisbury. Back in 2002, he had been appointed liquidator to the three companies, all part of the same group, and all of which had been dormant for four years. Despite this, he had managed to draw remuneration from them of over £1.46m. A complaint was made and the High Court ordered an assessor to review Yeldon’s work and his remuneration. The assessor found that some of the work he had done was unnecessary and his charges were excessive. He had overcharged the companies £388,082, £196,477 and £585,525 respectively...."
Spotlight on PPSA section 62 Linda Widdup and Hilary Hunt from Jackson McDonald, Solicitors, lexology.com, 2 February 2015 "How well do you know the PMSI priority rule? Under the Personal Property Securities Act 2009 (Cth)(PPSA), a purchase money security interest (PMSI) has the benefit of a super-priority if the PMSI is perfected in accordance with the PPSA. This means the PMSI will have priority over the collateral to which it relates even if a prior perfected security interest attaches to the same collateral...."
Priority in Security Interests: Lessons for Secured Creditors Davis LLP Banking and Financial Services Bulletin, 20 January 2015 "In the opening paragraph of his decision in CFI Trust v. Royal Bank of Canada 2013 BCSC 1715, Supreme Court Justice Elliot Myers drew a parallel to the dark comedy Fargo, but this case was no laughing matter to the two creditors involved, who were left fighting over the remains after the fraudulent use of funds by Vancouver’s Totem Automotive Group Ford Lincoln Sales and Leasing Inc. (“Totem”), a large but now-defunct car dealership. CFI Trust and CFI Leasing Limited (together “CFI”) and the Royal Bank of Canada (the “Bank”) were both lenders to Totem, which leased and sold new and used vehicles. Each had security agreements with the dealership and had effected registrations pursuant to the Personal Property Security Act of British Columbia (BCPPSA). (Although the registration by CFI was inadvertently discharged and re-registered, the validity of the registration did not really factor in the Court’s decision.) CFI and the Bank also had entered into a priority agreement to determine which financial institution had priority over which assets of Totem...."
ASIC action led to just 14 on criminal charges The Australian, Anthony Klan, journalist, 31 January 2015 " Just 14 people faced criminal charges for white-collar crimes in the six months to December, despite the corporate regulator engaging in 345 “enforcement outcomes”. Among the key boasts contained in the Australian Securities and Investment Com-mission’s biannual enforcement report are the details of a company director being fined $230,000 for making an illegal $30 million payment to himself and a listed company being fined $12,000 for not filing annual reports for three years...."
Submission by ASIC to the Senate Inquiry into the Telecommunications (Interception and Access) Amendment (Data Retention) Bill 2014 January 2015
Liquidators eye Ponzi investors The New Zealand Herald , Hamish Fletcher, business reporter,27 January 2015 "The liquidators of fraudster Jacqui Bradley's failed business are mulling whether to try to claw back $2 million from eight investors who were paid out before her Ponzi scheme folded. Bradley was sentenced to seven years and five months' jail in 2012 for her prolonged and premeditated defrauding of clients of B'On Financial Services, which she ran with her now-deceased husband, Mike. The former financial adviser, in her mid-60s, swindled 28 investors out of about $15.5 million and was found guilty of 75 fraud-related charges...."
ASIC demands access to metadata for crime-fighting The Australian, Mitchell Bingemann, Reporter, Sydney, 23 January 2015 "THE Australian Securities & Investments Commission has called on the government to expand the controversial data retention scheme to the corporate regulator, warning that without access to troves of customer metadata it will not be able to track down insider traders and white-collar criminals. In a submission to the parliamentary joint committee on intelligence and security, ASIC said the integrity of Australia’s financial markets would be compromised and individuals could lose their houses and life savings if it were not able to access metadata through the government’s planned changes to its data retention scheme...."
ASIC comments on media reports about its investigation into Myra Financial Services ASIC media statement 15-004MR , 9 January 2015 "ASIC has a clear commitment to tackling loan fraud in Australia, and we have run many successful cases in this area in recent times. Media articles today report on ASIC’s investigation of an alleged $110 million loan fraud which resulted in conspiracy charges against two men late last week. Those articles, which are critical of ASIC’s work, are inaccurate and speculative...."
ASIC let alleged $110 million fraudster flee country The Sydney Morning Herald, Business Day, Chris Vedelago, Georgia Wilkins, 8 January 2015 "The corporate regulator failed to stop a key figure in an alleged $110 million loan fraud from fleeing the country despite warning the suspect he was under investigation and raiding his home. The Australian Securities and Investments Commission also allowed the mortgage broker integral to the alleged fraud to continue to work unimpeded in the finance industry for at least another three years after coming under suspicion .... "
Pie Face given $2m lifeline by US lender The Australian, Business Review, Leo Shanahan and Eli Greenblat, 31 December 2014 "The Pie Face group has been thrown a lifeline by a $2 million rescue package from TCA Global Master Fund following creditor approval in a deal likely to see it moved out of voluntary administration .... A creditors’ report, issued last week, claimed Pie Face had probably been trading while insolvent for at least a year before voluntary administrators were appointed, and that as a consolidated group Pie Face had never been profitable. The report is understood to have been sent to ASIC...."
How Pie Face lost its way Business Review Weekly, Madeleine Heffernan and Simon Johanson, 2 December 2014 "It’s a terrible position. You’ve got half a million dollars invested and you’re working punishing hours as customers ask whether your store is set to close and landlords breathe down your neck. This is how one Pie Face franchisee explains his circumstances following the spectacular collapse of the once high-flying fast-food chain. The 11-year-old business, founded by former Wall Street banker Wayne Homschek and interior designer Betty Fong, had taken on Australia, the US and Singapore. Store openings were planned for the Middle East, Japan, South Korea and the Philippines.But now it’s store closures and job cuts that are the focus, fulfilling the bleak predictions of franchisees, who say the vast majority of stores were unprofitable. Administrator Jirsch Sutherland confirmed on Friday that 20 company-owned stores and two offices are being closed, with 130 part-time employees to lose their jobs....".
Former Rangers' administrators agree to transfer insolvency work while police investigations continue Daily Record UK, Scott McCulloch, 11 December 2014 "Insolvency Practitioners Association said Paul Clark and David Whitehouse offered a voluntary undertaking to transfer new and existing insolvency work "whilst the Scottish police carry out their investigations into the serious charges which have been brought". Insolvency Practitioners Association said Paul Clark and David Whitehouse offered a voluntary undertaking to transfer new and existing insolvency work "whilst the Scottish police carry out their investigations into the serious charges which have been brought" ...."
How one small businessman triumphed in court over $500,000 in liquidator’s fees for a $28,000 debt SmartCompany, Cara Waters, 11 December 2014 "Small businessman John Viscariello won a lengthy legal battle against liquidator PPB Advisory and law firm Minter Ellison on Tuesday. The Chief Justice of the Supreme Court of South Australia found in Viscariello’s favour in his claim of improper conduct against PPB and Minter Ellison. Viscariello’s retail business Bedroom Mazurka which included 18 outlets in South Australia went into administration in 2001 and lawyers and liquidators spent more than half a million dollars chasing a debt of just $28,000 ...."
David beats Goliaths: how John Viscariello took on PPB Advisory and Minter Ellison and won The Age, Business Day, Michael West, 11 December 2014 "It is rare for one man to triumph against the establishment, especially when he has taken on a major insolvency firm and one of the country's blue chip law firms. After 12 long years in the courts, however, much of it battling PPB Advisory and Minter Ellison, small businessman John Viscariello has done just that ...."
Babcock & Brown investors claim $113m The Australian, Sarah Danckert, 29 September 2014 "BABCOCK & Brown has been slapped with a $113.1 million claim by nearly 600 shareholders of the collapsed investment bank in a move that could see clawback provisions strip noteholders of some of their meagre payout. The 597 investors are seeking to be deemed unsecured creditors, which would see them rank ahead of the subordinated noteholders who have already received a payout of about $6m...."
The Graham Report: what about CVAs? Eric Walls, Director of turnaround and insolvency, KSA Group, UK, September 2014 "Let’s put things in context: pre-pack administration sales represent a small percentage of the overall UK annual insolvency caseload. They are not the most complained-about process around, and they do not account for anywhere near a significant percentage of complaints received via the Complaints Gateway. The fact that the Insolvency Service’s SIP16 review and referral process has not resulted in a deluge of adverse disciplinary findings against practitioners can only support this view...."
A decision on whether John Farragher can buy back his business will be left with the bank Newcastle Herald, IAN KIRKWOOD, 24 September 2014 "JOHN Farragher Transport Management director John Farragher wants to buy back his business but the liquidator says the final decision will rest with the bank. As the Newcastle Herald reported earlier this month the iconic Hunter transport business is in the hands of a liquidator. Corporate records show various Farragher companies either going into voluntary administration or liquidation over the past decade, and former staff owed money have alleged the latest liquidation was a ‘‘phoenix’’ that would allow the group to escape its creditors but trade on under a new name...."
ICWA sues Bell liquidator The West Australian, Neale Prior, 20 September 2014 "The battle over the $1.7 billion in Bell Group litigation loot has intensified with the Insurance Commission of WA suing the liquidator it bankrolled for almost two decades...."
Unreasonable director-related transactions Cooper Grace Ward, Graham Roberts and Kate Whalan, 15 September 2014 "A recent (judgment 24/2/2014) Victorian case has worrying implications for financiers and creditors. A decision of the Victorian Court of Appeal in Vasudevan v Becon Constructions (Australia) Pty Ltd [2014] VSCA 14 has the potential to significantly broaden the power of a liquidator to attack a company transaction under section 588FDA of the Corporations Act 2001 (Act) where there are ‘indirect benefits’ to a director or close associate of a director of the company. Although the decision will be welcomed by liquidators, it has worrying implications for financiers or creditors. Even a third party arm’s-length creditor could be caught. For creditors, the type of transaction most at risk will be where a company has provided a guarantee or security for a debt of a third party...."
(US) Bankruptcy Court holds secured creditors can be "crammed down" with below-market replacement notes (Chapter 11) Harvard Law School Forum on Corporate Governance and Financial Regulation, Mark I Bane, 6 September 2014 "On August 26, 2014, in the case In re MPM Silicones, LLC, Case No. 14-22503 (Bankr. S.D.N.Y.) (“Momentive”), the United States Bankruptcy Court for the Southern District of New York held that secured creditors could be “crammed down” in a chapter 11 plan with replacement notes bearing interest at substantially below market rates. Unless overturned on appeal, this decision will introduce a new level of risk to leveraged lending—secured lenders will face the specter of losing in a bankruptcy restructuring not only their negotiated rates, but any semblance of market treatment. This risk could result in a tightening of availability and increased costs to borrowers in levered transactions...."
Mark McIvor fined and convicted for failing to assist liquidator ASIC Media Release, 3 September 2014 "The founder and former director of Equititrust Limited, Mr Mark McIvor, has been convicted and fined $10,000 after failing to assist the liquidator appointed to his three companies. Mr McIvor, of the Gold Coast, was found guilty in the Brisbane Magistrates Court on 22 August 2014, following six charges laid by ASIC for failing to provide a Report as to Affairs (RATA) and deliver books and records to the liquidators of Chevron Capital Pty Ltd, MHSM Holdings Pty Ltd and SM Capital Pty Ltd within 14 days of the winding up order for each company...."
Complaints against (UK) insolvency practitioners rise 25% Accountancyage.com, Richard Crump, 27 August 2014 "Almost 1,000 complaints were made against insolvency practitioners in the last 12 months, representing an increase of 25% on the previous year, according to figures from the Insolvency Service. The Insolvency Service revealed a steep rise in complaints about practitioners since it launched its Insolvency Practitioners' Complaints Gateway in June 2013 as a single point of entry for complaints about insolvency practitioners. In the first year since its launch, the gateway received 941 complaints, compared with 748 and 578 complaints made to regulators in 2013 and 2012 respectively. Of the 941 complaints, 699 were referred to authorising bodies, 170 were rejected and 72 are currently being processed...."
Cable takes Comet administrators to task Insolvency News UK, John Brazier, 25 July 2014 "Business Secretary Vince Cable has announced the administrators of collapsed electrical retailer Comet have been referred to the Institute of Chartered Accountants in England and Wales (ICAEW). Insolvency practitioners Christopher Farrington, Nicholas Edwards and Neville Kahn of Deloitte have been referred over a potential conflict of interest, given they had previously supplied advice to the company and other connected parties...."
Tech-turnaround artist tries his luck with BlackBerry San Jose Mercury News, Michelle Quinn, 24 August 2014 "John Chen, the former chief executive of Sybase, is one of the tech industry’s most successful turnaround artists. And he has taken on his biggest challenge yet, as chief executive of struggling BlackBerry. The corporate turnaround is an art form, not a science. John Chen, the former chief executive of Sybase, is one of the tech industry’s most successful turnaround artists...."
Eddie Hayson: How one of Australia’s biggest punters lost a $52 million bet — declaring himself insolvent The Sunday Telegraph, Brenden Hills, 17 August, 2014 "BROTHEL owner Eddie Hayson is on the brink of bankruptcy after declaring himself insolvent with $52 million in debts. Hayson, one of Australia’s biggest gamblers, claims to be down to his last $100 and “boarding” in a waterfront northern beaches apartment after offloading most of his assets. The flamboyant punter, who recently announced he was selling his famed Sydney brothel Stiletto, filed for insolvency with the Australian Financial Security Authority on August 8...."
Does Australia need a US style chapter 11? Encouraging and facilitating corporate turnaround in Australia DibbsBarker.com, Macaire Bromley, 18 August 2014 "In its report on ASIC’s performance of 26 June 2014, the Senate Economic References Committee recommends that government review the law to consider reform which will encourage and facilitate corporate turnaround. It suggests that features of Chapter 11 (a reorganisation regime in the USA) be considered. Subsequently, the Financial Systems Inquiry (FSI) Interim Report which was released on 15 July 2014 makes recommendations with respect to External Administration, including to suggest that Chapter 11 would not be beneficial to Australia, and that there is little empirical evidence that Australia’s external administration process is causing otherwise viable businesses to fail. Submissions in response to the Interim Report are due by 26 August 2014...."
Media Options battle to be decided August 28 ProPrint.com.au, Nic White, 16 August 2014 "The liquidator of Bhaskar Datta’s failed Media Options trade printer is to recommend the business be sold to entities owned by Datta’s sister-in-law for just $213,500, less than half the up to $430,000 CMYKhub offer. Creditors of Media Options – which crashed last September – are owed $3.3m, and will finally choose a buyer for the collapsed trade printer at a meeting on August 28. There are two competing offers on the table, from CMYKhub and Sureprint, a company run by Amrit Chandra, the sister-in-law of former Media Options director Bhaskar Datta. Nothing is known about Chandra, and she has no LinkedIn profile. A clearly frustrated CMYKhub chief executive Clive Denhom says: “The liquidators do not seem to see an issue with selling to a related party effectively run by Bhaskar Datta.” ...
ASIC obtains bankruptcy orders against former officers of CTC Resources NL ASIC Media Release 14-194MR, 12 August 2014 "ASIC has successfully sought sequestration orders in the Federal Court of Australia against the estates of Mr William Forge, Mr Joszef Endresz, Ms Dawn Endresz and Mr Allan Endresz (the respondents). The respondents had failed to pay costs ordered by the Local Court of NSW in 2011 following ASIC's successful civil penalty proceedings against the respondents. The effect of the orders is to make the respondents bankrupt. ASIC has applied to the Australian Financial Security Authority to have trustees appointed over the estates of the respondents...."
Timbercorp victims set to sue financial planners, while liquidator presses for loans to be repaid The Sydney Morning Herald, Ben Butler, 10 August 2014 "Lawyers representing victims of failed forestry group Timbercorp plan to sue financial planners who reaped $92 million in commissions after advising their clients to invest in the company. The move comes as Timbercorp liquidator KordaMentha ramps up the pressure on victims to repay loans they took out to finance their investment by launching a flurry of legal action in the Victorian Supreme Court...."
Federal Court comments on receivers and liquidators obligation to hold funds under section 561 Corrs Chambers Westgarth, 8 August 2014 "In the decision of Saker, in the matter of Great Southern Limited[2014] FCA 771, the Federal Court of Australia held that statutory obligations, not trust obligations, require receivers and liquidators to hold and apply funds for the benefit of employees pursuant to s 561 of the Corporations Act 2001 (Cth)...."
Cameron to pay $13m over ‘insolvent’ claims The Australian, Greg Brown, 5 August 2014 KATHMANDU founder Jan Cameron has agreed pay $13.84 million to settle claims that she continued to trade one of her former companies, Retail Adventures, while it was insolvent. In a note to creditors, Retail Adventures’ liquidator, Deloitte’s Vaughan Strawbridge, said a settlement had been reached with Ms Cameron and the payment would be distributed “as soon as possible”. Ms Cameron will pay $12.5m for trading while insolvent and $1.34m for related party preference claims. The agreement, and other recovered funds, will result in a total recovery for creditors of $19.9m...."
Subbies expect fresh inquiry with new appointment Caboolture News, Bill Hoffman, 4 August 2014 " ... Sunshine Coast civil engineer Les Williams, whose company WK Civil lost $700,000 in the Walton collapse for work it did on the Nambour Coles project, said subcontractors were absolutely beholden to ASIC for supporting them. Mr Williams, head of the Walton Subcontractors Alliance which complained about the original Lawler Draper Dillon appointment as liquidators, said ASIC had listened, investigated and acted. "We've been found to be right,'' he said. Mr Williams said he expected the new liquidator would draw up a fresh list of witnesses to be called before a public inquiry into the Walton collapse, where they would be required to give evidence under oath...."
Cash-strapped ASIC defends its abilities The Australian, Andrew White, 1 August 2014 "THE Australian Securities and Investments Commission defended its ability to police its patch yesterday but admitted it would have to be careful in choosing which enforcement actions to pursue in the wake of heavy budget cuts...."
Federal Court Removes Liquidators JDSUPRA Business Advisor, K&L Gates LLP, Ian Dorey and Rebecca Wood, 1 August 2014 "The Full Court of the Federal Court of Australia (Full Court) has upheld part of the appeal of the Australian Securities and Investments Commission (ASIC) by removing liquidators in the case of Australian Securities and Investments Commission v Franklin (liquidator), in the matter of Walton Constructions Pty Ltd [2014] FCAFC 85...."
Practice Note: Court approval of provisional liquidator's remuneration mondaq, Article by Marc Baddams and Caterina Meduri, Swaab Attorneys, 31 July 2014 "In the Matter of CB Constructions (NSW) Pty Ltd [2014] NSWSC 913 is a recent decision of Justice Black which provides a reminder of the matters which need to be addressed when seeking court approval for the remuneration of a provisional liquidator under section 473(2) of the Corporations Act 2001 (Cth), and also the fact that such applications will not be successful as a matter of course...."
Liquidator's fall exposes Ella Rouge founders to phoenix allegations Sydney Insolvency News blog, Peter Gosnell, 28 July 2014 "THE founding directors of the Ella Rouge Beauty chain allegedly engineered a phoenix company transaction in 2008 because demands for unpaid payroll tax, workers compensation and other debts threatened to destroy their business. According to the recently released findings of a liquidator's disciplinary hearing, in early 2008 Mr Ali Hammoud and his wife Ms Manel Issa-Hammoud completed the transfer of assets worth approximately $4 million from their company Ella Rouge Beauty (ERB) to a second company they controlled, Beauty World International (BWI)...."
'Bankrupt' Geoffrey Edelsten blows $48,000 a month on luxuries The Age, Victoria, Chris Vedelago and Ben Butler, 27 July 2014 "Declaring bankruptcy hasn't stopped Geoffrey Edelsten from living a life of supreme luxury, with the disgraced businessman still blowing more than $48,000 a month on business class flights, five-star hotels and Gauthier jewellery for his girlfriends. Mr Edelsten, who claimed to have just $90 in cash when he filed for bankruptcy in January, has embarked on a spending spree that has left creditors fearing his estate is being drained ahead of any attempt to pay its debts. The three-month splurge has included a $1500 visit to a Beverley Hills beauty spa, AFL corporate packages worth $7000 and hiring a global PR firm to try to rehabilitate his reputation...."
$50m win for Forge creditors if challenge to APR succeeds The Age, Business Day, Amanda Saunders, July 26, 2014 "It has been strangely quiet on the Forge Group front since the collapsed mining services firm descended into receivership in February. But that is about to change. And the latest instalment promises to be one of the most interesting yet. It involves four gas turbines worth about $50 million and will be by far the biggest test of the Personal Property Securities Act, which came into force in early 2012. The firm's receivers KordaMentha are going to the Supreme Court of NSW to try to wrest control of four gas turbines from US giant APR Energy...."
Rent seekers offered options by Gunns liquidator ABC Rural, Tas Country Hour, Rose Grant, 22 July 2014 "Two years after the financial collapse of timber company Gunns, one of the most disenfranchised groups is moving towards a settlement. Gunns left 300 Tasmanian land owners stranded in 2012, when it failed to pay rent on 27,000 hectares it leased for Managed Investment Scheme plantations...."
Federal Court sides with ASIC: Walton liquidator must go Noosa News, Bill Hoffman, 19 July 2014 "THE Australian Federal Court has upheld an appeal by the Australian financial regulator, forcing the removal of the liquidator of failed construction company Walton. Walton went broke in October last year leaving debts of $69 million including $2.9m owed to Sunshine Coast sub contractors who worked on the Nambour Coles project. The unanimous decision by three appeal court judges over turns the previous rejection of an Australian Securities and Investments Commission (ASIC) bid in December to have liquidators Stirling Horne, Glenn Franklin and Jason Stone of the firm Lawler, Draper, Dillon removed for perceived lack of independence because of past dealings with the Mawson Group, business advisors to Walton principal and sole director Craig Walton...."
Liquidator probes Furniture Spot sale The West Australian, Peter Williams, 17 July 2014 "A liquidator is investigating the sale of the Furniture Spot business to the owner's son shortly before the trading company collapsed owing creditors about $6 million. Hall Chadwick representatives told a creditors meeting yesterday that Apostolos (Paul) Dimarelos had sold the retail chain to son Peter for $1.7 million in a non-cash transaction...."
Liquidators hunt for alleged Centaur Litigation Ponzi scheme boss Scott Williams The Sydney Morning Herald, Business Day, Ben Butler, 14 July 2014 "The Australian man alleged to be behind globe-spanning Ponzi scheme Centaur Litigation has disappeared in south-east Asia. Liquidators appointed by a court in tax haven the Cayman Islands say they cannot find Scott Williams, who appears to have been a key player in the complex litigation funding group, and another executive, Briton Brendan Terrill...."
Fiorentino to fight on as CALDB declares failings "significant and extensive" Sydney Insolvency News blog, Peter Gosnell, 11 July 2014 "Pino Fiorentino will seek to overturn a decision by the Companies Auditors and Liquidators Disciplinary Board (CALDB) that has seen him stripped him of his liquidator's registration. CALDB said in a statment: "The serious and extensive nature of the failings was such as to warrant cancellation of Mr Fiorentino’s registration." Those "failings" relate to Fiorentino's handling of the affairs of ERB International, to which he was appointed primary liquidator in April, 2008...."
Prohibitive ASIC fees the enemy of corporate transparency Crikey.com.au, Jeffrey Knapp, 10 July 2014 "In an open and transparent democracy such as ours, anyone can access information about public companies through the ASIC register. Anyone, that is, with deep pockets - and the fees have just gone up again...."
ASIC: the chicken sent to deal with crocodiles The Canberra Times, Jack Waterford, 27 June 2014 "The Australian Securities and Investments Commission received a terrible pasting from a Senate committee this week. It's supposed to be there to protect consumers and free markets and to blow the whistle when corporate conduct is illegal, unfair or unconscionable. Instead it was, as one witness put it, a chicken sent out to deal with crocodiles...."
Capital + Merchant investors get auditor payout The New Zealand Herald, Hamish Fletcher, 26 June 2014 "Capital + Merchant Finance's out-of-pocket investors finally have some good news seven years after its collapse with the company's liquidator today announcing a $18.5 million settlement with the failed firm's auditors. The finance company collapsed in 2007 owing $167 million to about 7500 investors and previously no funds were expected to be recovered. But the liquidator of Capital + Merchant Finance today announced it had reached an $18.5 million out-of-court settlement with the company's former auditors...."
The Case of the Missing White-Collar Criminal Bloomberg View, The Editors, 22 June 2014 "The senior executives who played leading roles in the 2008 financial crisis can breathe a sigh of relief: If any committed crimes, the statute of limitations will run out for most of them this year. It's safe to say nobody will go to jail. One doesn't have to presume guilt to feel that the lack of prosecutions raises some nagging questions: Did prosecutors exhibit impressive restraint in refusing to satisfy the public's desire for retribution, or are they just incapable of punishing criminals in positions of power? Are changes needed in the way the criminal justice system handles white-collar crime? ..."
Court confirms the relevance of unsecured creditors’ interests when granting extensions under Personal Property Securities Register regime Corrs Chambers Westgarth :- David Abernethy, Jason Salman , John Stragalinos, Kirsty Sutherland, Mark Wilks and Michael Kimmins, 20 June 2014 "Under the Corporations Act 2001 (Cth), there is a risk that a secured creditor’s security interest will vest in the company if it fails to register its interest on the Personal Property Securities Register within 20 business days and the company subsequently goes into administration or liquidation. The recent decision of 123 Sweden AB v Appleyard Capital Pty Limited [2014] NSWSC 782 provides guidance as to the circumstances relevant to the Court’s discretion to grant relief to a secured creditor who has inadvertently failed to register within time...."
Craig Bond declares bankruptcy over $100k The West Australian, Neale Prior, 11 June 2014 "Perth businessman Craig Bond has followed in the footsteps of his father Alan and has become a full-blown bankrupt after failing in a year-long survival campaign. "
A bridge too far? insolvencynews.com (UK), April 2014 ".... Alastair Lomax, director of the restructuring team at law firm Pinsent Masons, commented that the number of directors disqualified had fallen 30%, from 1333 to 920, between 2010-11 and 2012-13. At the same time, he argued, levels of liquidation had remained high, averaging in excess of 4,000 per quarter over the last three years ...."
Bar bill sinks Soundwave promoter The West Australian, Tim Clarke, 5 June 2014 "A brutal legal battle over a $340,000 bar takings debt has culminated in the organisers of the Soundwave music festival having its WA promoters Altered State declared insolvent...."
White-collar crime reports going unread amid ‘endemic’ lack of resources The Irish Times, Crime & Law, Ruadhan Mac Cormaic, 2 June 2014, quoting Remy Farrell SC ".... On the severe delays in forensic computer analysis due to under-resourcing, which were having a “stark” impact on investigations, Mr Farrell said: “So if you’re going to commit an elaborate fraud, make sure to password lock your computer, even if it’s a really obvious password. That should buy you at least two to three years....”
Insolvency guru KordaMentha's Mark Korda under fire on advice The AGE, Business Day, Ben Butler, 31 May 2014 "One of Australia's best-known insolvency practitioners, KordaMentha partner Mark Korda, has been accused of giving substandard advice to failed investment group Octaviar in the run-up to its collapse in September 2008. In a lawsuit filed with the Queensland Supreme Court, the liquidators of two companies in the Octaviar group accuse KordaMentha's advisory arm, 333 Capital, of breach of duty and misleading or deceptive conduct...."
Association of Certified Fraud Examiners (USA): 2014 Report to the Nations on Occupational Fraud and Abuse "The 2014 edition of the Report is based on 1,483 cases of occupational fraud, as reported by the Certified Fraud Examiners (CFEs) who investigated them. The analysis of these cases provides valuable lessons about how fraud is committed, how it is detected and how organizations can reduce their vulnerability to this risk. On behalf of the ACFE and in honor of its founder, Dr. Wells, I am proud to present the 2014 Report to the Nations on Occupational Fraud and Abuse to all businesses, government agencies, anti-fraud practitioners, academicians, the media and the general public. We hope that the information contained in this Report is of great interest and provides an invaluable tool for those who seek to deter, detect or simply understand the impact of occupational fraud...."
Bankrupt Geoffrey Edelsten accused of concealing his assets The Sydney Morning Herald - National, Ben Butler and Chris Vedelago, 25 May 2014 "Disgraced businessman Geoffrey Edelsten has admitted to spending $63 million in less than two years, squandering his fortune on high living and ''stupid'' investments. The massive loss, and Mr Edelsten's claim he had only $90 in cash when he filed for bankruptcy in the US in January, is likely to raise questions with creditors, including the Tax Office, about how he is paying for his lavish lifestyle with new girlfriend Gabi Grecko, a 24-year-old model, DJ and aspiring TV star...."
Sham financing statements on the PPSR: problems caused and their resolution (Sandhurst Golf Estates v Coppersmith) Minter Ellison, lawyers, Nick Anson, 22 May 2014 "The Personal Property Securities Register (PPSR) does not require the person registering a security interest to file the underlying security agreement with the PPSR. That position is in contrast to a 'documents register' such as the former ASIC Register of Company Charges, which had an essential requirement of lodgement of the security document for effective registration. As an electronic register that permits registration to occur online, the PPSR is accordingly open to obvious abuse where a person is prepared to lodge a sham financing statement...."
Walton probe has subcontractors wondering Caboolturenews.com, Bill Hoffman, 22 May 2014 ".... Walton Subcontractors Collective spokesman Les Williams said that his group remained furious that access to key Walton financial information had been lost when documents were transferred to two entities, Tantallon and Lewton Asset Services, immediately before Walton went into administration on October 4 last year...."
Hewatt administrators spend up to $200,000 The Sydney Morning Herald, David Ellery, 19 May 2014 "PPB Advisory, the company handling the voluntary administration of the Hewatt group of companies, expects to have spent between $175,000 and $200,000 by the time the first meeting with creditors begins on Tuesday...."
Government cuts ASIC funding, hints at more corporate self-regulation ABC, The World Today, Pat McGrath, 15 May 2014 "The Australian Securities and Investments Commission was given $400 million in last year's budget to carry out its job of monitoring the country's financial markets and catching corporate crime. But Joe Hockey's first budget has delivered a cut of $120 million over the next five years for ASIC, with $50 million being cut in the next financial year alone. Ian Ramsay heads Melbourne University's Centre for Corporate Law and Securities Regulation and is surprised by the size of the cut....
$12 million to be spent investigating sale of ASIC registry business The Age, Business Day, Gareth Hutchens, 14 May 2014 "The Australian Securities and Investments Commission's $6 billion-plus registry business looks set to be privatised as part of the Abbott government's plans to ''reduce the footprint'' of the federal government...."
Liquidator’s fees and expenses - Universal Distributing considered by the High Court Corrs Chambers Westgarth, 9 May 2014 "In Stewart v Atco Controls Pty Limited (in liquidation) [2014] HCA 15, the High Court confirmed the Universal Distributing principle that a liquidator is entitled to be paid his or her remuneration and expenses in realising assets in priority to a secured creditor.... "
ASIC begins fresh push to oust liquidator of controversial Walton Construction bankruptcy ABC.net.au News, Lexi Metherell, 5 May 2014 "Today in the Federal Court, the Australian Securities and Investments Commission (ASIC) will allege the accounting firm PKF Lawler failed to disclose a prior relationship with a company involved in the collapse of one Australia's largest construction companies. The case will be closely watched by the industry, and if successful the decision could have far-reaching implications for some of the nation's largest professional services firms like Ernst & Young and PricewaterhouseCoopers, which rely on referrals for most of their work...."
Hire Purchase agreement, unperfected security interests and the PPSA vesting rules Australian Restructuring Insolvency & Turnaround Association (ARITA), Michael Murray and Jason Harris, 28 April 2014 "In this case Spiers was unable to rely upon the deemed temporary perfection rule in PPSA s 322 because of the operation of s 322(3) and PPS Regulation 9.2, which provide that deemed temporary perfection for transitional security interests does not apply where the transitional security interest was registrable at the time immediately before commencement (which Spiers’ interest in the property was) but was not properly registered on the migrated register...."
Administrators, sale of goods, remuneration, liens and the PPSA Australian Restructuring Insolvency & Turnaround Association (ARITA), Michael Murray and Jason Harris, 29 April 2014 "The Renovation Boys case gives useful guidance on the relationship between the Sale of Goods Act (and its equivalents in other states) and the PPSA, particularly regarding the transfer of title and the operation of the taking free provisions. Importantly for insolvency practitioners, the decision provides protection for the administrators’ equitable lien to cover the substantial costs and expenses and remuneration arising from the substantial work involved in organizing the stock for collection by customers.... "
ASIC assets sized up for $1bn sell-off The Australian, National Affairs, Sid Maher, 15 April 2014 THE corporate regulator’s register of companies is being sized up for sale by the federal government as part of a plan that could provide a $1 billion cash injection to commonwealth coffers. The Australian understands that the government is considering the privatisation of the Australian Securities & Investments Commission’s corporate register, which has come into sale calculations after the regulator’s chairman, Greg Medcraft, expressed the view that it was not a core function and was a “technology business”….
One.Tel payout set to hit $50m The Australian, Business, Andrew Main, 14 April 2014 "THE final key chapter in the saga of failed 1990s telco One.Tel looks set to play out today with a financial settlement of between $40 million and $50m, which only slightly exceeds estimates of what the liquidation has cost so far. Interests associated with former directors Lachlan Murdoch and James Packer are understood to be ready to sign off a deal that will pay that amount to creditors of the company, which collapsed in May 2001….”
Bendigo companies in voluntary liquidation Bendigo Advertiser, Blair Thomson, 12 april 2014 “THREE companies formerly behind some of Bendigo’s best known cafes have been placed into voluntary liquidation owing more than $200,000 to creditors. JP Downey and Co was appointed liquidator for Moran Investments Group Pty Ltd, Moran Hospitality & Leisure Pty Ltd and Morcorp Cartely Pty Ltd on March 13. The companies traded as Bath Lane Cafe, Cafe Au Lait and Green Olive Cafe. Liquidator Jim Downey said the three companies owed a combined total of about $240,000 to creditors …. Mr Downey said the companies had been sold prior to his appointment so there were no assets remaining…. Mr Moran said the businesses were still trading and viable with the same management. ''I sold the business in January this year,'' he said. ''I’m in no way involved in those businesses. ''New people have bought those businesses. “The businesses are solvent, they’re trading. “All staff are gainfully employed.” Mr Moran would not say who had purchased the businesses or for how much.”
Australia's personal insolvency increases 6.1% in March quarter 2014 Australian Financial Security authority, Media Release, 9 April 2014 "Australian Financial Security Authority today released the provisional personal insolvency activity statistics for the March quarter 2014."
Michael Buble tickets guaranteed depite Showbiz going into administration The Sydney Morning Herald, Entertainment, Andrew Taylor, 7 April 2014 "Thousands of music fans who purchased premium packages for Michael Buble's upcoming concert tour from ticketing agency Showbiz International will have their tickets honoured despite the company going into voluntary administration.The executive director of venue operator AEG Ogden, Rod Pilbeam, gave the guarantee as the troubled company's administrator said he was still working through the details of upcoming shows."
Fraud-buster squad to go after unpaid tax millions The Canberra Times, Noel Towell, 5 April 2014 "The Australian Taxation Office has formed a giant fraud-busting unit of 2200 public servants designed to intimidate fraudsters evading hundreds of millions of dollars of tax each year. Conceding that authorities cannot ''chase every rabbit'', senior tax officials have told Fairfax that the new outfit is designed to hit big-time fraudsters, attract more publicity and team up more often with police, the Immigration Department and welfare agencies. The cash-strapped Tax Office, in the process of shedding 900 jobs, insists the move is not about cutting costs. Deputy Taxation Commissioner Greg Williams says the giant new division will take a new approach to ''case selection'' hoping to change the behaviour of companies and individuals through high-profile big-money busts...."
Mainzeal liquidators increase pressure on Yan The New Zealand Herald, Business Desk, 3 April 2014 "The liquidators for the Mainzeal group are stepping up their pressure on former director Richard Yan as they try to get to the bottom of the construction company's failure.... The liquidators haven't been provided with detailed financial accounts for the company, including an accounting ledger believed to be in China, despite requesting the information from Yan, and can't verify the accuracy of the records they've received, according to their first report."
FOFA the political backdrop as ASIC probe takes centre stage The Age, Business Day, Adele Ferguson, 29 March 2014 "Australia's corporate watchdog could see its powers over financial planners and liquidators beefed up after a Senate inquiry into its performance raised concerns about its competency, effectiveness and slowness to act. Senator John Williams, who was instrumental in calling the inquiry, said he would be pursuing extra powers for ASIC to place a stop order on planners and liquidators. This means when ASIC receives evidence of wrongdoing in either industry it can call the planner or liquidator and suspend their operations immediately. An appeal can then be lodged with the Administrative Appeals Tribunal....
Nathan Tinkler could face court grilling over $5m Patinack stud payment The Age, League HQ, Donna Page, 28 March 2014 “Newcastle Knights owner Nathan Tinkler could face a courtroom grilling over the liquidation of his Patinack Farm stud and $5 million owed to creditors. Amid a scramble for company records, Adelaide liquidator Tony Matthews told Fairfax Media yesterday he planned to issue examination summons to the former directors, Tinkler, Hunter Sports Group chief executive Troy Palmer and Patinack Farm Administration chief finance officer Tony Marshall, which could force them to appear before court ….”
Turnbull blasts ASIC for putting public data behind paywalls GovernmentNews.com.au, Julian Bajkowski, 25 March 2014 "Communications Minister Malcolm Turnbull has levelled a broadside at corporate regulator the Australian Securities and Investments Commission and other government agencies which now sell access to their data holdings to the public and business as a way of raising revenue. In the most conspicuous ministerial backing of principles underpinning the Open Data push under the Abbott Government to date, Mr Turnbull branded ASIC’s existing series of hefty charges for access to its documents as “really regrettable” – a statement that could ultimately pave the way for the scrapping of dozens of public sector paywalls and electronic document charges...."
Liquidator refers Bramco Electronics director Mark Leishman to ASIC The Newcastle Herald website, By Jason Gordon, 23 March 2014 “The Court of Appeal and the Australian Securities and Investments Commission have delivered two more blows to failed Warabrook company Bramco Electronics and its director Mark Leishman. In the first hit, the liquidator of the western Newcastle firm has confirmed that Mr Leishman had been referred to ASIC for further investigation and possible prosecution over his failure to hand over all company and employee records….”
Register retention of title clauses on the Personal Property Securities Register correctly Clayton Utz Insights, Greta Burkett, 20 March 2014" Suppliers relying upon their retention of title clauses to create "transitional security interests" must still ensure they're registered correctly. A recent case has held that a seller's assumption that it was protected by the transitional provisions in the Personal Property Securities Act 2009 (Cth) (PPSA) was incorrect (Central Cleaning Supplies (Aust) Pty Ltd v Elkerton [2014] VSC 61). The case has given a useful reminder of how crucial it is to identify security interests and to determine whether they are "transitional" under the PPSA...."
Tough penalties have a powerful deterrent effect. ASIC media release, 20 March 2014 "ASIC today released Report 387 Penalties for corporate wrongdoing).REP 387 reviews penalties in Australia for corporate wrongdoing to assess whether they are proportionate and consistent. It compares ASIC’s penalties with those in other countries, those of other Australian regulators; and across ASIC’s regime."
Watchdog shies away from enforcement The Age, Business Day, Michael West, 1 March 2014 "In mid-2008 the Australian Securities and Investments Commission was warned Storm Financial group was going to blow up. We know this because we warned them ourselves. "Clean bill of health" was the response. Six months later, Storm and its 13,000 clients and $4 billion in funds collapsed. On the barometer of sheer human misery, this was the worst collapse the country had seen." ...
Creditors sidelined as LM Group Surfers Paradise property sells for a song The Age, Business Day, Michael West, 20 February 2014 "The administrators of failed funds management operation LM Group have quietly sold a beachside property to a confidante and key associate of LM’s founder Peter Drake for less than half its previous sale price …."
Drake transferred funds to de facto as his LM group failed The Age, Business Day, 17 February 2014, Michael West "As his billion-dollar fund empire was imploding last year Peter Drake was busy transferring cash to his girlfriend, a move that concealed assets from his creditors and kept the Gold Coast impresario living the high life."
Court throws out ASIC bid to block liquidator The Age, Business Day, 13 February 2014, Ben Butler" "Veteran insolvency practitioner Stirling Horne has defeated a bid by the corporate regulator to have him removed as liquidator of failed builder Walton Construction. The Australian Securities and Investments Commission had asked the Federal Court to disqualify Mr Horne and two colleagues, accusing them of failing to disclose a perceived conflict of interest."
Geoffrey Edelsten misused funds from forced jet sale, US lawyer says The Age, Business Day, 5 February 2014, Ben Butler "Money from the forced sale of a luxury jet owned by Geoffrey Edelsten that was supposed to go to his former business partners instead went to an Australian company controlled by the disgraced former doctor and to pay his legal bills, a Florida court has heard."
Liquidator appointed for airline The Australian, Business, 4 February 2014, Steve Creedy "THE companies behind failed regional carrier Brindabella Airlines were placed into liquidation at a creditors meeting yesterday. Administrators Rodgers Reidy were appointed liquidators and the few remaining assets will be sold by KordaMentha. Canberra-based Brindabella went into receivership in December, leaving its 140 employees jobless, after the Civil Aviation Safety Authority grounded eight of its 12 planes because scheduled engine inspections had not been undertaken."
The Financial Crisis (in USA): Why Have No High-Level Executives Been Prosecuted The New York Review of Books, 9 January 2014, Jed S. Rakoff, a US District Judge on the senior status for the Southern District of New York. "Five years have passed since the onset of what is sometimes called the Great Recession. While the economy has slowly improved, there are still millions of Americans leading lives of quiet desperation: without jobs, without resources, without hope. Who was to blame? Was it simply a result of negligence, of the kind of inordinate risk-taking commonly called a “bubble,” of an imprudent but innocent failure to maintain adequate reserves for a rainy day? Or was it the result, at least in part, of fraudulent practices, of dubious mortgages portrayed as sound risks and packaged into ever more esoteric financial instruments, the fundamental weaknesses of which were intentionally obscured?"
Australian Financial Security Authority (AFSA) today released the provisional personal insolvency activity statistics for the December quarter 2013. AFSA Media Release 9 January 2014 "The number of debt agreements in the December quarter 2013 is the highest number on record in a quarter. Debt agreements comprised 35% of total personal insolvency activity in the December quarter 2013."
Creditors line up to claim losses from Bill Vlahos' failed punting club The Age, Business Day, 15 January 2014, Ben Butler "At least $75 million was tipped into the failed punting club operated by racing identity Bill Vlahos and the figure is likely to grow, according to a report to creditors."
The inside story of the Walton Construction collapse The Sunshine Coast Daily, 26 October 2013, Bill Hoffman "While subbies from Townsville to Melbourne chase their money, holding faint hopes that they can access funds still held by big Walton clients like Aldi, Coles and Woolies, many of the same people involved in the company's collapse have rebranded and moved on."
ASIC asks Federal Court to sack Walton Construction liquidator The Age, Business Day, 24 December 2013, Ben Butler and Chris Vedelago "The corporate regulator has asked a court to kick veteran insolvency practitioner Stirling Horne out of his role as liquidator of collapsed builder Walton Construction after accusing him of failing to disclose a perceived conflict of interest."
Scrutinising ASIC: Is it a watchdog or a dog with no teeth? The Age, Saturday, 23 November 2013, Adele Ferguson, Ben Butler, Ruth Williams "In recent years, ASIC has routinely been described as a toothless tiger, a dog with no bite and a keystone cop when it comes to enforcement."
Tangled web of deceit, debt and lawsuits The Age, Business Day, Saturday, 28 September 2013, Ben Butler "They were the scammers so slick they ripped off a fraudster, if the allegations against them are correct. Stephen George Snowden is a convicted criminal who built part of his nursing home empire using $7 million he admits taking from Westpac by exploiting a flaw in the bank's systems. But he appears to have met his match when he ran up against an alleged fraud ring connected to Melbourne solicitor John Voitin."
Lehman liquidators and hangers-on the winners in Australian saga The Age, Business Day, Thursday, 12 September, 2013, Michael West "This week marks the five-year anniversary of the fall of Lehman Brothers and the zenith of the global financial crisis. Lehman's is the biggest liquidation in US history. And it is has been paying out to its creditors, who lost money when it crashed at 2am on September 15, 2008, in New York. In stark contrast, however, the local councils, charities and churches left in the lurch by Lehman Australia's toxic credit instruments are still yet to see one red cent. This is despite five years of courtroom battles and $80 million in fees to lawyers and liquidators."
Cameron faces $48m litigation The Examiner (Tasmania), Thursday, 22 August 2013, Matt Maloney "JAN Cameron's failed company Retail Adventures could be open to $48 million in litigation for trading while insolvent if creditors decide to liquidate the company next month."
Fraud claims against solicitors should be investigated: judge The Age, Wednesday, 21 August 2013, Ben Butler "Multimillion-dollar fraud claims against solicitors John Voitin and Simon Nixon and Mr Voitin's wife, Clare Sowersby, should be properly investigated, a judge has found."
Lawyer denies hiding creditor assets The Age, Wednesday, 14 August 2013, Ben Butler "In just 18 days following the collapse of Paulding Constructions, lawyer John Voitin and insolvency practitioner Leonard Milner billed the failed home building company more than $180,000, a court heard on Tuesday."
Muller should pull pin at LM The Age, 12 August 2013, Ben Butler "Insolvency practitioner Ginette Muller of FTI Consulting has had plenty of time over the weekend to think about the well-deserved judicial kicking she's received from Queensland Supreme Court judge Jean Dalton over her role in administering the LM funds management empire formerly run by Peter Drake."
New Zealand: Care needed in registering financing statements on the PPSR mondaq.com, 10 August 2013 "An effective security interest relies on a valid financing statement registered on the Personal Property Securities Register (PPSR). Defects in the financing statement could result in a secured party losing out to other creditors. A recent case1 is a reminder of the need for creditors to take care with financing statements."
What they are about to receive - from the judge Sydney Morning Herald, 10 August 2013, Michael West "Finally, a judge has thrown the book at some insolvency types for pettifogging. Justice Jean Dalton may not have deployed the P-word itself but she surely captured the quintessence of pettifogging in her decision on Thursday in the Supreme Court of Queensland. ''Solicitors acting for [the administrators] filed an affidavit of over 800 pages ? that was of such marginal relevance that it was not referred to in either written or oral submissions by any party.'' We adored that."
Affidavit sparks fresh inquiries in fraud case The Age, News, 10 August 2013, Ben Butler "Investigations into alleged multimillion-dollar frauds by Melbourne lawyers John Voitin and Simon Nixon have widened as new information comes to light, a court has heard."
Tax man wields axe on small business Sydney Morning Herald, 9 August 2013, Adele Ferguson "The Australian Taxation Office has become the grim reaper of small business after statistics reveal it is behind nearly half the 1365 companies that have been served with wind-up notices in the past three months."
Advisers ahead of clients in LM liquidation line The Age Business section, 31 July 2013, Michael West "Financial advisers who put their clients into LM Investment Management's since frozen funds stand to collect millions in commissions before their clients see any return."
Bankrupt Geoff Clark did not list shares The Australian, Pia Akerman, 31 July 2013 "Former Aboriginal leader Geoff Clark failed to disclose property and share holdings when he filed for bankruptcy and cannot recall creating a loan agreement that allowed him to borrow funds from the community trust he controlled. "
Jackson's creditors breathe a sigh of relief. "Talking PPSR", Issue 9, April 2013, ppsrcheX.com.au "Unsecured creditors of collapsed company, Jackson’s Rare Guitars, have breathed a sigh of relief after the administrator decided to return their guitars valued at over A$1 million. As reported by PPSRcheX, the company went into administration in late 2012, with speculation it had been trading insolvent since June 2010. This left more than 100 clients - who were selling guitars through the store on a consignment of stock arrangement - disgruntled, after they were told they may not get their guitars back."
Ettamogah assets sales fall short SMH.com.au, 12 December 2012, Chris Vedelago "THE collapse of the Ettamogah Pub and entertainment empire has cost creditors at least $25 million, with liquidators so far recovering only a portion of what is owed by companies associated with Melbourne businessman Leigh O'Brien."
Employers and unions trade blows on GEERS redundancy scheme Supply Chain Review, 12 July 2012. The General Employee Entitlements and Redundancy Scheme (GEERS) has become an industrial relations and regulatory football, two weeks after its near-death experience in the High Court.... The latest into the fray is Australian Industry Group (Ai) CEO Innes Willox, who lambasted the Australian Council of Trade Unions (ACTU) over accusations that employers were milking GEERS.
Suppliers singed by Bendigo caterer Bendigo Advertiser, 11 July 2012 The liquidators report reveals the company owed money to 42 creditors from Bendigo and across Victoria, including $55000 to the Australian Tax Office. Creditors listed in the report range from suppliers to drycleaners and family-run food stores as well ...
Liquidator appointed for collapsed NSW builder Reed Construction Property Observer, 11 July 2012 Failed NSW builder Reed Construction has been placed in the hands of a liquidator following a successful winding-up petition to the NSW Supreme Court from creditor SCE Group.
1st Fleet in $100m debt before crash SMH.com.au, 10 July 2012 FAILED trucking company 1st Fleet owed about $100 million when it collapsed and likely traded while insolvent, its liquidator says.
Phoenix laws won't fix the real problem Sydney Morning Herald, Adele Ferguson, 9 July 2012 While phoenix activity is estimated to cost the economy at least $3 billion a year in lost income, it is a mere sideshow to the sleeper in the economy: the growing army of technically insolvent companies that systematically churn through suppliers with ...
Kitchen Connection saw signs of collapse The Courier Mail, 7 July 2012, Liam Walsh THE latest accounts (of Australian Kitchen Industries Pty Ltd t/as Kitchen Connections), while only lodged last month, were for the 2010 financial year and showed a $4.9 million loss from revenue of $75.6 million. Its liabilities exceeded assets by almost $10.4 million, the account showed. AKI's directors noted they considered the business could continue, citing reasons including that the secured lender on March 29 this year advised they would not demand repayment of their loans for 12 month .... the auditors (of the 2010 accounts) ... warned of "significant doubt" about the company continuing as a going concern. Auditors BDO wrote that the company, which sells everything from cooktops to modern style-kitchen designs with aluminium edging, continued "to incur significant losses". "The major shareholder and secured lender ... are not willing to provide ongoing support in the form of additional funding for the trading losses," BDO wrote.
"Begbies Traynor launches property website" > Rachel Singh > Accountancy Age UK > November 23, 2011.
"Business failures jump 25 per cent" > Dun & Bradstreet Small Business (News) > August 25, 2011
"Betting agency misled, say staff" > Michael Bachelard > The Age > September 4, 2011
"Rough justice proof of two-speed system" > Ian Verrender > The Sydney Morning Herald > September 3, 2011
"Timbercorp case thrown out" > Ben Butler > The Sydney Morning Herald > September 2, 2011
"Watchdog didn't even sniff Babcock" > Ian Verrender > The Sydney Morning Herald > September 1, 2011
UK: "Row delays crackdown on 'phoenix' firms" > James Hurley > www.telegraph.co.uk > August 22, 2011
"$160m Suit Filed Against Investment Group, Ernst & Young" > Michelle Remo > “Big 4″ observer > August 24, 2011
"Never-ending One.Tel story may still be going in 2016" > Elisabeth Sexton > Sydney Morning Herald > 12 August, 2011
"Laws take effect to help gardaí tackle white-collar crime" > Conor Lally > Irish Times > 9 August 2011
"Elderslie creditors gun for Hewson " > Scott Rochfort > Sydney Morning Herald > 4 August 2011.
"ASIC wants Centro directors to be disqualified " > Sarah Danckert > The Australian > 2 August 2011
"Government must reform regulatory bodies to prevent liquidation frauds " > Adele Ferguson > Sydney Morning Herald > 1 August 2011
"Judge strikes out "puzzling" Environinvest pleadings" > Leonie Wood > Sydney Morning Herald > 20 July 2011
"18 arrested (in Singapore) for white-collar crimes" > Candice C > AsiaOne.com.sg
"Trading Voluntary Administrations" > Worrells Insolvency Newsletter > July 2011
Failure to produce company statement of affairs a serious matter > irishtimes.com > 27/6/2011
Irish liquidator criticises statement of affairs > Tim Healy > Independent.ie > 28/6/2011
"Colourscan owed $700,000 to staff" > Nolan Giles > 21/6/2011
"AMI founder thwarts ACCC" > Ben Butler > The Age > 21/6/2011
"Crime in Decline? Not Necessarily" > David O. Friedrichs > Huffpost Business (USA) > 16 June 2011
"Liquidator hits redial on One.Tel " > Elisabeth Sexton > June 13, 2011 > Sydney Morning Herald.
"Bankrupt Borders Group Chain Looking to Liquidate Assets at 51 Stores" > Tiffany Kary - Jun 9, 2011 > Bloomberg.
"You won't do time for 'white-collar' crime - no laws seem to cover it" > Independent.ie > June 2011
"Flinders Plaza development in receivership" >LIAM BUTTERWORTH >Townsville Bulletin > June 9th, 2011
"Directors' Disqualification: Room for Improvement" by the Association of Business Recovery Professionals, United Kingdom > November 2010
"CRIME STATISTICS ON COMMON INSOLVENCY OFFENCES BY COMPANY OFFICERS" by Peter J Keenan > December 2010
"A hearing has begun in the Federal Court in Sydney involving the Australian Crime Commission and actor Paul Hogan." > 8/11/2010 > ABC News "BANNED insolvency accountant Stuart Ariff pocketed more than $70,000 in taxpayer funds even as he was the subject of a fraud investigation, new documents show."> 2/11/2010 > news.com.au "Filings to the Australian Securities & Investments Commission reveal Krispy Kreme Australia posted a $12.5 million loss in 2008. And while sales jumped 7 per cent to $57.9m last year, the company reported a profit of just $62,000, with trade debts and payables outweighing liquid assets by more than $5.5m." > 2/11/2010 > The Australian Senate Inquiry into the Insolvency Industry > "Bringing the liquidator's into line" > Adele Ferguson, The Age, 2/8/2010. Lehman Brothers > Costs of Insolvency Administration > "Who knew bankruptcy paid so well" > New York Times, 30/4/2010. Senate Inquiry into the Insolvency Industry > "Systemic failure in insolvency industry" > The Herald, 15/4/2010. Senate Inquiry into the Insolvency Industry >"White-collar criminals stretch ASIC" > Business Spectator, 9/4/2010. Senate Inquiry into the Insolvency Industry >"Insolvency industry must change" >Business Day, 15/3/2010. Opes Prime failure> "Now for the Opes wash-up"> Sydney Morning Herald, \| smh.com.au, 28/3/2008. Opes Prime failure> "Gloomy outlook for Opes Prime investors: receiver"> ABC News, 2/4/2008. Opes prime failure> "Little-known Opes, spectacular failure"> The Australian, 5/4/2008. Opes Prime failure> "Creditors vote to liquidate Opes Prime"> Melbourne Herald Sun, 16/10/2008. HOME

"Elderslie creditors gun for Hewson " > Scott Rochfort > Sydney Morning Herald > 4 August 2011.

"Government must reform regulatory bodies to prevent liquidation frauds " > Adele Ferguson > Sydney Morning Herald > 1 August 2011

"Trading Voluntary Administrations" > Worrells Insolvency Newsletter > July 2011