Thursday 26 March 2015

INSOL infiltrated by Australian achievers

PPB Advisory's Mark Robinson
is the new INSOL president.
Photo courtesy PPB Advisory
 AS the annual regional INSOL conference wraps up in San Francisco, Australians have emerged as prominent players in the organisation's leadership with PPB Advisory's Mark Robinson taking on the presidency after several years as vice president. 

A statement issued by PPB Advisory said Robinson's role would include "promoting a stronger, global turnaround culture" and expanding INSOL's reach into jurisdictions like South-East Asia.

"In the near term, Mark will be embarking on an active program to listen to the needs of market participants both here and abroad to shape his program to deliver the above priorities and broadening its membership base to include other turnaround market participants such as debt/hedge/private equity funds and financiers," the statement said.

Other Aussies ascending the INSOL ranks include the Queensland University of Technology's Ros Mason, who as Professor of Insolvency & Restructuring Law and a member of the Faculty of Law’s Commercial and Property Law Research Centre now heads up INSOL's academic group.

Henry Davis York chairman and insolvency specialist Scott Atkins, also takes a seat on the main INSOL board.

The appointments are an endorsement for the Australian Reconstruction, Insolvency & Turnaround Association (ARITA), which counts Robinson as a past president and Atkins as a current director.

Email SiN

Wednesday 25 March 2015

ARITA cuts Wily in the wake of AFSA deal

Andrew Wily.
THE association of insolvency professionals has revoked Andrew Wily's membership after the armstrongWily principal cut a deal with the bankruptcy regulator that allowed him to resign as a trustee in bankruptcy, rather than having his registration terminated involuntarily.

"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;".

Monday 23 March 2015

Did Wily jump before AFSA pushed?

Andrew Wily hooked up and laughing.
Photo courtesy:
IN early February, Sydney-based insolvency practitioner Andrew Wily was required to front at a meeting with the Australian Financial Security Authority (AFSA).

The bankruptcy regulator had formed a three member committee under section 155(H) of the Bankruptcy Act to consider terminating Wily's registration as a trustee in bankruptcy.

Section 155(H) (1) allows for the involuntary termination of a bankruptcy trustee's registration. It empowers the Inspector-General to demand 
from the trustee a written explanation justifying why they should continue to be registered.

If the trustee's response either does not satisfy the Inspector-General, or is not forthcoming within a reasonable time frame, then under the Act, the Inspector-General must convene a committee "to consider whether the trustee should continue to be registered."

The reasons why the regulator might consider involuntary termination are numerous. If a trustee is incapacitated by illness or convicted of a crime then section 155(H) can be applied. If the regulator believes the trustee has failed to carry out their duties properly or exercise their powers in a suitable fashion then a demand under 155(H) can be issued. There is no suggestion that any of the above are the reason why AFSA was contemplating rescinding Wily's registration. On that point both Wily and AFSA are mute.

Whatever the reason, it was sufficiently serious for AFSA to form the committee comprising the Inspector-General, another public servant and a registered trustee with no conflict of interest. Under the Act the registered trustee must be chosen by the Australian Recovery Insolvency and Turnaround Association (ARITA).

SiN understands a trustee travelled from interstate to join the committee. It should not be inferred though that there isn't a trustee in NSW who doesn't have a conflict when it comes to the head of armstrongWily, who, as it turned out, arrived at 
the meeting accompanied by his lieutenant Paul Fury, another armstrongWily staffer and an alternate proposal.

Friday 20 March 2015

EXCLUSIVE: Prentice may grill billionaire Mother over bankrupt son's mortgage

Max Prentice of BPS Recovery
SYDNEY-based bankruptcy trustee Max Prentice may seek to formally question one of Australia's richest women after being appointed trustee of the bankrupt estate of West Australian businessman Grant Bennett.

45 year old Bennett is the son of Angela Bennett, whose late father Peter Wright shared in the riches generated after he and his prospecting partner the late Lang Hancock identified and staked claim to much of the Pilbarra region's vast iron ore reserves. Ms Bennett's net worth is estimated at around $1 billion net, thanks to a half share in Wright Prospecting and a swag of property interests.

Grant Bennett declared himself bankrupt earlier this year via a debtor's petition filed in Adelaide after defaulting on loans extended by JWH Nominees, the private financing vehicle of the Sydney-based Hunt family, which sold out of Primo Small Goods in 2011.

The money was initially lent to Strategic Investment & Trading Pty Ltd, which spent $8.7 million buying farmland around Boddington south of Perth. The plan was to subdivide and sell to wealthy Asian investors.

Under the terms of an agreement with Strategic, Grant Bennett was then going to buy the farm from Strategic for $17.6 million, thereby enabling Strategic to repay JWH.

When Bennett's company, GKB Property Pty Ltd failed to obtain alternative financing to complete the transaction, JWH put receivers in charge of Strategic.

According to a report by journalist Neale Prior published in The West Australian last week, Grant Bennett provided personal guarantees on the loans to Strategic. Default interest rates of 39 percent have applied since July, 2013.

Prior's report also says JWH had hoped Angela Bennett would bail out her son. She refused and Grant Bennett then made an offer which JWH deemed unacceptable. He filed a debtor's petition with the Australian Financial Security Authority (AFSA) in Adelaide on January 12, 2015.

By declaring himself bankrupt, Grant Bennett's estate became the responsibility of the Official Receiver. However JWH Nominees then intervened, applying under Section 181 of the Bankruptcy Act to replace the Official Receiver with Prentice of BPS Recovery. Angela Bennett, who is also a creditor of her son, did not respond and Prentice was appointed trustee of Grant Bennett's estate on March 6, 2015.

The appointment of Prentice is likely to refocus scrutiny on potentially recoverable assets, principle of which is a mansion Grant Bennett occupies in Perth's exclusive Mosman Park.

Purchased in 2010, the property is mortgaged to Angela Bennett and without a settlement, Ms Bennett may well find herself summoned to answer detailed questions about the mortgage and its terms.

Email SiN

Tuesday 17 March 2015

Crouch poised to cherry pick portfolio

Andrew Wily showing there's more to life 
than being a bankruptcy trustee.
Photo courtesy
SITTING on a beach at Byron Bay, Crouch Amirbeaggi co-principal Nicholas Crouch is a long way from the worries occupying fellow insolvency practitioner Andrew Wily.

The head of armstrongWily is currently organising his voluntary retirement from life as a registered bankruptcy trustee, part of which entails working out what to do with more than 400 bankruptcy appointments prior to the deadline imposed by AFSA.

That date is described by the bankruptcy regulator in the following, somewhat flexible terms: "It presently is anticipated that the Inspector-General will accept Mr Wily’s request to cease to be registered shortly after 30 May 2015."

SiN understands about 150 of Wily's bankruptcy files are active. When contacted Crouch confirmed he'd spoken with Wily about taking over some of the jobs. However he said he "wanted to see what was in them" first and mentioned that Wily was speaking to other trustees. It's possible the pick of the portfolio might go to tender.

The most obvious way to effect the transfer of bankrupt estates to other trustees is via Section 181 of the Bankruptcy Act which states: "The creditors may, by resolution, at a meeting of which not less than 7 days' notice has been given, remove a registered trustee appointed by them, or a registered trustee who is, by virtue of subsection 156A(3), the trustee of the estate of the bankrupt concerned, and may at the same or a subsequent meeting appoint another registered trustee to be trustee in his or her place."

Another avenue might be by applying to the court for an order apportioning the jobs to specific trustees named in the application. That however would deny creditors their right to object to the nomination of a particular trustee without having to incur the cost of opposing the nomination through the courts.

None of that of course is occupying the mind of the sports-loving Crouch who - presently ensconced on the NSW far North Coast - is about as far away from Wily's woes as a Sydney-based insolvency practitioner can get, apart of course from those who've already jetted off for San Francisco for the INSOL Conference, which kicks off next Sunday.

See also EXCLUSIVE: Wily relinquishes bankruptcy ticket

Email SiN