Arrest warrants voided as accountants appear

From Left: Bill Gertos, solicitor James Jordan
Therese Alha and Constantine Savell
Photo: SiN Images

APPARENTLY they never knew. About the summonses to attend for public examinations, about the orders to produce documents or about the warrants for their arrest, issued after the summonses expired uncomplied with. Accountants Bill Gertos, Constantine Savell and Therese Alha. No idea.

The Federal Court heard as much last Friday in room 19c around 3.00pm. Registrar Chaun Ng warned the three that they must appear when summonsed. Seated in the front row of the public gallery, Gertos said that if he had known about the summons, "I would've been here".

The three, all connected to Camperdown firm Gertos Savell Katos (GSK), were originally summonsed to appear on Monday, November 23, 2015.

Lawyers acting for creditors of bankrupt artistic agent Dolores Lavin are keen to scrutinise arrangements which have seen title to a $3.8 million Potts Point apartment pass from a family trust controlled by Lavin as trustee to a family trust controlled by a trustee company called Billy Buckle Pty Ltd controlled by Gertos.

Of the three only Savell was delivered to the court under arrest. His lawyer James Jordan portrayed it as unfortunate and unnecessary, telling the registrar that five minutes after Savell had advised him he was preparing to surrender voluntarily, a pair of agents from the Australian Federal Police executed the warrant and brought him in. Alha and Gertos surrendered voluntarily.

Unaccustomed to issuing arrest warrants, Registrar Ng accepted undertakings from the three to comply with their summonses and declared the arrest warrants void. The summonses now require Gertos and Savell to produce documents and Alha to present herself for examination tomorrow.

Arrest warrants issued for Lavin's accountants

Accountant Con Savell of Gertos, Savell Katos

THE wash up from day one of public examinations into the bankrupt estate of artistic agent Dolores Lavin culminated in the issue of arrest warrants for her accountants and an application by Lavin to be excused from her examination on undisclosed medical grounds.

Late on Monday afternoon Federal Court Registrar Chuan Ng issued warrants for the arrest of Bill Gertos, Con Savell and Therese Alha. Barrister Geoff McDonald, who is representing Lavin and others summoned to appear advised by text message late yesterday that the accountants would appear at the court today.

All three are connected to accounting firm Gertos Savell Katos in Camperdown, though a testy receptionist told SiN over the telephone that Bill Gertos had no association with the accounting practice whatsoever.

An ASIC search of Gertos Savell Katos Pty Limited confirmed that Bill Gertos is neither a director or a shareholder of that company.

However in his Declaration of Independence, Relevant Relationships and Indemnities (DIRRI), Lavin's trustee in bankruptcy declared that Gertos Savell Katos refers work to Worrells from time to time and that "Bill Gertos is one of the partners of Gertos Savell Katos Accountants & Advisors."

In his initial report to creditors Aaron Lucan showed that Gertos has in recent years been installed as director and shareholder of former Lavin entities DLM Australia Pty Limited, DLM Capital Pty Limited and Luxe Studios & Productions Pty Limited.

Lavin bankruptcy a curly one for Worrells

Bankrupt artistic agent, Dolores Lavin
Image: DLMLA

WORRELL'S Aaron Lucan must be having an interesting time at present, variously cajoling and coercing the rival claimants to the estate of Dolores Lavin, a bankrupt artistic agent whose assets are linked to an accountant given to slinging work Worrells' way.

In his first report to creditors as Lavin's trustee in bankruptcy, Lucan told creditors: "There are many complex and varied issues affecting Ms Lavin's assets and liabilities." He wasn't kidding.

For a start there seems to be genuine contention in regards to proprietorship of Lavin's apartment in Potts Point. She paid $3.8 million for the Wylde Street pad in 2008 with a mortgage from Westpac. Current valuations are coming in anywhere between $2.058 million and $3.2 million.

For Lavin's creditors, Wylde Street represents real potential, though Lucan has yet to disclose how much, if any of their $5.32 million in claims he's accepted in proofs of debt.

According to Lucan's report, Lavin, who filed for bankruptcy via a debtors petition on February 19, 2015, is sole registered owner on title to the apartment. However Lucan told creditors there are "unregistered dealings on title" that may effect the validity of the mortgage.

These dealings appear to be at odds with orders made in the Supreme Court of NSW in February 2014 and according to Lucan, Lavin neglected to disclose the property's existence in her Statement of Affairs (SoA). But that's perhaps because she doesn't regard herself as sole registered proprietor.

"During an interview with the bankrupt on March 9, 2015, I was advised that the bankrupt was registered on title in her capacity as trustee for the Wylde Family Trust," Lucan said.

"I was provided with documentation relating to a change of trustee. I requested a copy of the trust deed.

"On 16 March 2015 I received a copy of the trust deed accompanying a letter from a solicitor purporting to act for the trustee of the Wylde Street Trust, Billy Buckle Pty Limited.

"I have received information and documentary evidence from a creditor refuting the assertion that the property is held on trust," Lucan claimed.

EXCLUSIVE: Dolores Lavin declares bankruptcy

The Wylde Street Potts Point complex housing
Dolores Lavin's cherished home.

FOLLOWING her failure to win a reprieve in the High Court, artistic agent Dolores Lavin has declared bankruptcy in a move unlikely to satisfy ex-bestie Paola Toppi, who has a court judgment and bankruptcy notice ordering that Lavin pay Toppi and her husband Neil Cunningham more than $870,000.

Documents obtained by SiN show Lavin was registered as a bankrupt on the national personal insolvency index on February 19, 2015, a week after the High Court shut the last door on her fight to avoid recovery proceedings Toppi of Machiavelli Ristorante fame commenced in 2011.

Worrells' Aaron Lucan has consented to act as trustee of Lavin's bankrupt estate but given the dealings that have taken place regarding the proprietorship of Lavin's ritzy Wylde Street apartment in Potts Point, it promises to be anything but boring.

On September 13, 2013 a Deed of Change of Trustee was registered. Listed on the deed of change are Lavin, accountant Constantine Savell, Billy Buckle Pty Ltd and The Wylde Family Trust. Effectively the deed empowers Savell as appointor of the trust to appoint Billy Buckle Pty Ltd, replacing Lavin as trustee of the The Wylde Family Trust.

Bankruptcy notice reactivated as Paola Toppi successfully defends former friend's high court appeal

Paola Toppi, co-owner of the popular Machiavelli restaurant on Clarence Street, has resurrected bankruptcy proceedings against her former friend and business partner Dolores Lavin after the High Court yesterday threw out Lavin's application to have an earlier decision of the Supreme Court overturned.

As of today Lavin has 13 days to comply with a demand she pay Toppi and her husband Neil Cunningham up to $1.2 million. It's almost 10 years since the pair began borrowing millions of dollars from NAB to start and fund their Luxe Studios photographic business.

By 2009 the relationship had soured. Accusations of gambling debts emerged. Toppi was locked out of the Luxe premises on Liverpool Street Darlinghurst. She retaliated, installing receivers in January, 2010. They sold off the Liverpool Street property in June of that year for $4.9 million. NAB then commenced recovery proceedings against all three and their related entities, seeking an additional $4.25 million.

Toppi and Cunningham eventually made good their $2.9 million share of their obligation as co-sureties to NAB by selling their home, although they wore a $1 million haircut on the sale because an earlier offer of $5.6 million had to be declined because at the time the offer was made, the Liverpool Street property had not sold.

Lavin meanwhile had made her own settlement with NAB, paying out $1.35 million and negotiating a deed of settlement that included a covenant from the bank that it would not sue her in relation to the matter. Toppi and Cunningham reasoned that Lavin, as a co-surety to the loans from the beginning, appeared to have extricated herself for a lot less than it had cost them. They initiated proceedings to recover around $800,000. Lavin for that matter launched action to recover $400,000 in excess interest she said accrued because of Toppi's decision to appoint receivers.

Ultimately Toppi and Cunningham's action led to a judgment debt and the issuing of a bankruptcy notice against Lavin in 2013. There have been multiple stays but yesterday's High Court ruling is the end of the line for Lavin in terms of avenues of appeal. The clock is ticking. A creditor's petition hearing must be considered imminent unless Lavin can engineer an alternative.

Toppi and Cunningham were represented by Beazley Singleton Lawyers whilst Lavin was represented by Websters Lawyers.

For an in-depth account of this sorry saga see: Toppi seeking to bankrupt ex-bestie. The High Court's determination can be read at: Lavin v Toppi [2015] HCA 4 (11 February 2015)

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Toppi seeking to bankrupt ex-bestie

Luxe Studios is now at 279 - 283 Liverpool Street
Photo: SiN Images

Paola Toppi's lawyers will appeal a judgement handed down in the Federal Circuit Court last week which further delays bankruptcy proceedings the Sydney restaurateur initiated last year against her former friend, the photographic agent Dolores Lavin.

Philip Beazley of Beazley Singleton Lawyers, confirmed yesterday that he will file an appeal on behalf of Toppi against the June 13, 2014 judgement of Nicholas Manousaridis.

The judge ruled last week that the period for compliance with a bankruptcy notice served on Lavin by Toppi and her husband Neil Cunningham on November 29, 2013 be extended for a fourth time to allow Lavin to make an application for special leave to appeal to the High Court.

Lavin is seeking to appeal the decision of the NSW Supreme Court of Appeal, which last month dismissed her application to have an earlier judgement ordering her to pay Toppi $871,016.56c overturned.

The earlier judgement, handed down on September 12, 2013, gave Toppi and Cunningham the green light to serve Lavin with the bankruptcy notice but by the time they did, Lavin had already filed an appeal. 

Since then, Lavin has applied to have the period for compliance with the bankruptcy notice extended three times while waiting for her appeal to be heard. In the course of obtaining extensions, Lavin has also won an order staying execution of the Supreme Court judgement. But the Court of Appeal dismissed her application on May 23, 2014. 

According to the Manousaridis judgement of June 13, the extensions in the notice compliance period have been essential in enabling Lavin to avoid committing an act of bankruptcy, an event which would potentially expose her to devastating loss.