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.
According to CALDB the failings "involved a number of different aspects of the liquidation of ERB and involved dishonest use of position, failure to act in good faith in the best interests of ERB and its creditors, lack of competence and failure to comply with statutory provisions." CALDB reached its decision on June 24, 2014, ordering that the deregistration take effect after 14 days.
But Fiorentino told SiN he would ask the Administrative Appeals Tribunal (AAT) to review the evidence used by the Australian Securities and Investments Commission (ASIC) in its application to CALDB.
"This decision by CALDB is totally flawed," he said. "I want the court to make an order that until the review of the evidence by the AAT, it is not right for them to draw conclusions from wrong facts."
Fiorentino also said he's been denied a fair hearing. He said he had paid Tony McGrath of McGrathNicol $30,000 for an expert witness report and had not been given the opportunity to use it at the hearing on February 4, 2014, which took place without him because he refused to participate unrepresented by legal counsel.
In the months leading up to the hearing, Fiorentino had been in dispute with his professional indemnity insurer, which had initially refused his claim for cover before accepting it, only to then withdraw the offer to fund legal counsel just before Christmas, 2013.
Fiorentino told SiN he would also be appealing the decision of Federal Court Judge Michael Wigney, who last month dismissed his argument that he was denied natural justice at the February 4 hearing because it proceeded without him.
He said he has a hearing scheduled before the AAT on September 2 where he would seek a review of the evidence ASIC presented at the CALDB hearing.
Federal Court records show Justice Melissa Perry this week dismissed an originating application from Fiorentino for relief under section 39B of the Judiciary Act. However the matter remains open.
CALDB's decision to deregister Fiorentino followed an application to the board by ASIC in June 2013. ASIC has alleged that "prior to the liquidation, Mr Fiorentino had been contacted by a director of ERB, regarding whether it was possible for ERB to transfer its business to a related third party and proceed to liquidation, leaving ERB with debts including a debt owed to the Office of State Revenue (“OSR”), which ERB could not pay."
ASIC alleged in its application to CALDB that Fiorentino and the director consulted a barrister who advised that such a transfer was not possible unless the sale of assets was for a proper commercial value.
The corporate regulator alleged that, notwithstanding the barrister's advice, "ERB proceeded to transfer its assets for no cash consideration to a related third party controlled by ERB’s directors (“BWI”) and shortly thereafter, went into liquidation, with outstanding debts, including the OSR debt.
"Mr Fiorentino had the primary day-to-day control of the liquidation, and was actively involved over the following year," ASIC said.
ASIC also focussed attention on a mechanism entered into between ERB's directors and liquidators.
"In January 2009, Mr Fiorentino executed a Deed of Settlement and Release with ERB’s directors and BWI which prevented further action against them, and which meant that the unsecured creditors of ERB (including the OSR) would receive no payment of their debts under the liquidation."
CALDB's 208 page determination and reasons document repeatedly describes the transfer of ERB's assets to BWI as an alleged 'phoenix transaction'. Fiorentino deregistered ERB International in January, 2010.
It also states that "the directors' claims in the report as to affairs (RATA) that they remained substantial creditors of ERB were also extremely suspicious, particularly as BWI had only just purported to take over directors‘ loans of more than $2m under the Business Sale Agreement."
An ASIC spokesman told SiN this week that the investigation into the affairs of ERB International and BWI is ongoing.
SiN has learned that ERB's directors have considered proposing a Deed of Company Arrangement to creditors but it is not known if they intend to proceed.
ERB International is currently in the hands of Simon Cathro and Phillip Campbell-Wilson from Ernst & Young. They were appointed liquidators by the NSW Supreme Court earlier this year following an application by Fiorentino to have ERB reregistered which was unsuccessfully opposed by ERB's directors.
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