PPB Fees - Oswal's expert unwilling to condemn

Pankaj and Radhika Oswal

READ in their entirety, expert witness reports can be turgid affairs. Eye-glazing repetition. Incessant referencing of Acts and Codes. Footnotes even. But when a report's author is cross-examined in open court and the minutiae of their conclusions surveyed, a more engaging narrative may emerge.

Barry Raymond Cooke is one such expert. Cooke was engaged by Pankaj Oswal to produce expert witness reports about PPB Advisory's handling of the receivership of Oswal's Burrup Fertilisers Group (BFG).

In the bitter litigation that's played out between BFG founder Oswal, his lender ANZ Bank and PPB, the Dubai-based fertiliser tycoon has lined up PPB partners Ian Carson, Simon Theobald and David McEvoy for special retribution, motivated by what Oswal claims was flagrant overcharging during the 13 months they were receivers.

Oswal is out for blood. In his statement of relief filed on 1 April 2015, he sought orders which would effectively see Carson, McEvoy and Theobald disqualified from acting as official liquidators or liquidators for seven years.

The alleged excesses are well catalogued. Wives, children and partners accompanying PPB staff as they travelled each week from Melbourne to Perth. Alleged gross inflation of costs - Oswal and his wife Radhika claim the receivers charged almost $20,000 to fill out a form - reclassifying work so that it would be paid for by Burrup Fertilisers Pty Ltd (BFPL), rather than by ANZ or the receivers themselves.

The appointment lasted just 13 months and in that time PPB and legal advisers Herbert Smith Freehills and Minter Ellison reportedly billed almost $34 million. One of the receivers, Melbourne-based partner Carson, has even admitted that things could've been done better, though PPB insists it has at all times acted within the law and in accordance with the applicable professional standards.

Liquidation's outcome 'profoundly disturbing" says On Q Group judge

Matthew Gess
Photo: Worrells 

LIQUIDATORS' remuneration and deeds of company arrangement (DoCAs) are again in the spotlight following the publication of a judgement relating to the failed ASX-listed IT outfit, On Q Group Limited (In Liquidation)(Subject to Deed of Company Arrangement)

The judgement - handed down last Friday by NSW Supreme Court Justice Paul Brereton - ruled on the application of Danny Vrkic, a Wollongong-based insolvency practitioner seeking to terminate the winding up of On Q Group so as to facilitate the effectuation of a DoCA. 

Paul Burness
Photo: Worrells.

But while outlining his reasons for ultimately granting Vrkic's application, the judge expressed multiple reservations about how On Q Group's insolvency has played out.

One concern related to the remuneration of On Q Group's liquidators, Worrells' Matthew Jess and Paul Burness, who were appointed liquidators via a creditors voluntary winding up on December 23, 2008. Justice Brereton questioned the liquidation's purpose.

"Thus the practical effect of the liquidation has been to

recover in excess of $725,000 of assets and transfer it to the liquidators, their agents and advisers, with no benefit at all to those for whose benefit the liquidation is supposed to be conducted. I find this profoundly disturbing," he said.

Prior to the judgement Jess and Burness presented evidence to justify their remuneration, with Jess filing an affidavit on October 1 2014 which laid out the complexities of the liquidation and the work done. The judge however seemed unconvinced.

"But even assuming that every dollar of remuneration can be supported on the basis of time spent at their usual rates, it is difficult to see how it can be justified having regard to considerations of proportionality," he said, referring to his recent decision in the matter of AAA Financial Intelligence Ltd (in liquidation) ACN 093 616 445 (No 2) [2014] NSWSC 1270 (17 September 2014).

In a statement provided to SiN, Worrells shed more light on the background to On Q Group's complicated clean up.

"Prior to us accepting this appointment, we are aware that at least one other major insolvency firm had refused to consent to act due to the significant risk and uncertainty associated with the appointment," the firm said. 

"The Voluntary Administration and subsequent Liquidation of the Company was burdened with a number of complexities, including several separate legal proceedings, and significant costs that we were required to personally fund (at our expense and risk) as there were no recoveries until more than 12 months following our appointment.

"Worrells supports proper scrutiny of liquidators remuneration and we welcome open discussions on insolvency matters."

Justice Brereton's judgement, following hard on the heels of the AAA Financial decision, also drew a quick response from the Australian Restructuring, Insolvency & Turnaround Association (ARITA). 

Radhika wins minor round against PPB

A Fairline Squadron, similar to the one PPB is
worried will rot at its mooring. 

YOU'D think PPB Advisory's boys on the Burrup Fertilisers Pty Ltd (BFPL) receivership might be a little miffed.

On December 22, just a week after their big win in the Supreme Court of Victoria, Federal Court judge Justice Neil Walter McKerracher dismissed their application seeking to be appointed receivers to a Fairline Squadron 74, purportedly owned by the wife of absent fertiliser mogul Pankaj Oswal. And that decision is going to cost. (Read the Judgement)