"In accordance with clause 7.1(b)(ii) of the Constitution, Mr Wily's membership was automatically terminated effective from 24 March 2015," the Australian Restructuring, Insolvency & Turnaround Association (ARITA) said today.
"Mr Wily recently relinquished his status with the Australian Financial Security Authority as a Registered Trustee. Through its statutory role in supporting AFSA under section 155H of the Bankruptcy Act, ARITA became aware of actions being undertaken by AFSA that invoked consideration of Mr Wily's ongoing membership under clause 7.1(b)(ii) of the ARITA Constitution," ARITA said.
The relevant section of ARITA's constitution states: "If, as a consequence of Disciplinary Proceedings or legal proceedings taken against a Member, a Sanction is imposed on the Member which:
"has the effect of terminating the Member's entitlement to remain a member of a Foundation Organisation or to continue to practise as an Insolvency Practitioner or legal practitioner, then the Member's Membership is automatically terminated;".
ARITA's action comes after AFSA invoked section 155(H) of the Bankruptcy Act to consider involuntary termination of Wily's registration as a trustee in bankruptcy.
The meeting between AFSA and Wily took place in early February. SiN understands that AFSA's concerns ran to several pages and that negotiations extended well into the evening before the parties agreed that Wily would resign voluntarily.
The agreement was likely struck to spare both AFSA and Wily the cost and angst of legal wrangling, given Wily would have been within his rights to fight involuntary termination through the Administrative Appeals Tribunal (AAT) and the courts.
Did Wily jump before AFSA pushed?