Thursday 22 December 2011

Eaton bankrupt but not beaten

Lawyer Jim Johnson after
the Eaton examination
Photo: SiN Images
GILES Woodgate’s protracted dealings with bankrupt electrician Stuart Alexander Eaton continue to throw up intriguing developments.

At a recent examination in the Federal Magistrates Court Woodgate's legal team alleged that Eaton “has access to a stream of revenues that the bankrupt has not disclosed to the trustee”.

Not perhaps the most startling allegation a trustee has ever made but what’s not quite as common is the trustee hauling the bankrupt’s offspring into a court in a bid to verify his suspicions.

To that end Eaton’s adult son Mitchell Eaton spent much of the day explaining how he was made director of Eaton Electrical Group (EEG), a company through which much of the business’s revenues and profits pass.

His appointment came a month before his father was bankrupted in 2010 by unsecured creditor Mr Llia Lliagouev. Mitchell said he owns one share in EEG and does not receive a dividend.

A schoolteacher, Mitchell Eaton told the court his father is responsible for EEG's day-to-day operations and is paid $1000 per week for his services.

He also revealed that the Eatons are a close family, telling the court he shares a Vaucluse rental property with his father, his brother Matthew and two sisters.

When asked who pays the rent he advised that he and his brother contributed $250 per week to the monthly rental fee of $8,690.47c a month.

Mitchell Eaton also advised that EEG contributed $5097.00 per month.

Add this to the $1000 the Eaton sons contribute monthly and even SiN’s dwarfish arithmetic detected a discrepancy of approximately $2600 per month.

Perhaps the bankrupt contributes some of his $1000 weekly wage? Maybe his daughter’s also pay rent?

EEG director and schoolteacher
 Mitchell Eaton
Photo: SiN Images
Whatever the reason the discrepancy was not pursued, and the examination continued, albeit subject to the persistent objections of the Eaton’s lawyer Jim Johnson.

Throughout the course of Mitchell Eaton’s examination Johnson repeatedly appealed to Registrar Anthony Tesoriero to intervene on the grounds of unfairness.

Eventually Johnson sought an adjournment so he could apply to suspend the examination.

The parties trooped down to court 6A where Federal Magistrate Kenneth Raphael waited to hear, and ultimately dismiss, the curious case of the incorrectly stamped summons. That's another story.

But as Mitchell Eaton was due to fly to New Zealand the next day to play the drum in a pipe band, the court won't get to hear Woodgate pursue his allegation about Eaton senior's supposed alternative income source until early in 2012.

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