Monday 10 December 2012

Donnelly halves Slater & Gordon's Keddies claim

FERRIER Hodgson’s Max Donnelly has admitted barely half of a near $1 million proof of debt filed by law firm Slater & Gordon (S&G) against the bankrupt estate of struck-off solicitor Russell Keddie.

Donnelly, who was appointed trustee in bankruptcy to Keddie’s estate on June 15, is aiming to pay an interim dividend before Christmas. 

But the claims Donnelly is prepared to accept for interim distribution purposes and the amount the high profile lawyers are claiming is far from aligned. 

“As each day goes on, they (S&G) get a new claim and they are claiming under the indemnity, Donnelly explained.

“They said: ‘we know we might get sued on 20 cases but it might be a million’.

“I’ve said: ‘I’m only going to admit you for what you’ve actually paid out. I don’t care what you might get claimed’.

“I think they’ll end up with about half a million,” Donnelly said in relation to the law firm’s $918,283.00 claim, adding: “I’ve knocked back a good chunk of that.”

The law firm announced in 2010 it was acquiring Keddies as part of a strategy to get traction in the personal injury space.

A condition of the $30 million plus transaction saw Keddies’ partners - Russell Keddie, Scott Roulstone and Tony Barakat – agree to shield the purchaser through the provision of an indemnity.

Since the Keddies overcharging scandal and subsequent declaration of bankruptcy by all three men this year, many of Keddies’ clients have sued the new owner.

Under the terms of the indemnities, Slater & Gordon can attempt to recoup the costs of being sued from the ex-partners’ bankrupt estates.

And Donnelly conceded S&G likely will come back for more at a later date.

“It’s when we get to the final dividend that they can say, ‘well look what we’ve got now’ and they get catch-ups,” he said.

Slater & Gordon provided a brief statement, saying: “ … given many of these issues are before the court or in the hands of the Trustee it is inappropriate to comment.”

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