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| Bankrupt artistic agent, Dolores Lavin Image: DLMLA |
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.
On March 4, 2015, documents installing accountant and developer Bill Gertos as sole director of Billy Buckle and transferring to him its one share for the consideration of $1 were filed with ASIC.
The documents record February 13, 2015 as the date of Gertos' appointment as director and secretary of Billy Buckle Pty Limited. He is also listed as the beneficial holder of Billy Buckle's one share.
Bill Gertos was sole director and shareholder of Billy Buckle when it was first incorporated in 2005. He resigned as director of Billy Buckle on September 12, 2013 and transferred its one share to Lavin, who was appointed director on the same date.
Lavin resigned as director of Billy Buckle on February 13, 2015, the same day Worrell's partner Christopher Darin met with Camperdown-based accounting firm Gertos Savell Katos.
When contacted, Gertos's solicitor, Robert Jundja, told SiN that "Mr Bill Gertos has no proprietary interest in the accounting firm Gertos Savell Katos".
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), Lucan 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."
Lucan's report also shows 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.
The consideration for the shares was $100 per entity, a figure Lavin told Lucan she arrived at by judging the shares to be basically worthless thanks to business failures brought on by the Global Financial Crisis. Lucan's report also identifies Gertos as the largest unsecured creditor to Lavin's estate.
This came about by virtue of a statement of liquidated claim, filed with the Supreme Court of NSW on July 14, 2014, by G Capital Corporation. Bill Gertos is sole director of G Capital Corporation.
A copy of the claim obtained by SiN outlines how Lavin's company, Dolores Lavin Management (DLM), entered into a lease beginning March 1, 2009 for commercial premises at Level 1, 160 - 164, Parramatta Road, Camperdown. The offices of Gertos Savell Katos are situated adjacent, at 164 Parramatta Road.
Initially Lavin entered into the lease agreement with a company called SWJG Pty Ltd. Bill Gertos was a director of SWJG until December 16, 2011.
According to the statement of claim, G Capital Corporation took over the SWJG lease with Dolores Lavin Management on November 17, 2010, but had no more success in getting the rent paid.
"Despite demands from the plaintiff and repeated assurances by the Defendant to bring the arrears up to date by way of various arrangements over time, all of which were not complied with, the Defendant has failed to bring the arrears up to date as at the day of vacating the premises on 28 February, 2014," the statement of claim said.
On August 15, 2014 G Capital obtained a $2.5 million debt default judgment against Lavin, who did not defend the claim, a seemingly out-of-character capitulation given she's battled her former friend and business partner, Paola Toppi over a disputed co-surety contribution linked to their failed Luxe Studios venture for the past five years. (Read about it here.)
In the dispute with Toppi, Lavin fought her ex-bestie all the way to the High Court, which on February 12, 2015 dismissed her final bid to stave off recovery proceedings initiated by Toppi and her husband Neil Cunningham after they won judgement against her on September 12, 2013.
Her debt to Toppi and Cunningham stands at around $900,000 but Lavin declared bankruptcy three days after the filing of a creditors petition by Gertos's G Capital Corporation on February 16, 2015.
Millions of dollars in accumulated rental arrears wasn't the only issue occupying Gertos though, given the decision in the Land & Environment Court last month that saw him and his development company Geitonia fined $250,000 for demolishing a shopfront facade on Parramatta Road at Annandale.
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| Before and after images showing how the protected facade before it was illegally demolished by developer Bill Gertos Images courtesy ABC/Leichhardt Council |
In that matter Gertos had argued that the facade was unsafe but the court found otherwise. He and his company were fined a total of $250,000 and ordered to pay most of the prosecution's costs, estimated at $500,000.
Lucan's report shows that as a creditor to Lavin's estate Gertos is claiming $145,000 directly and $2.575 million via G Capital Corporation. Gertos Savell Katos is also in there as a creditor for $186,000.
Since Gertos now controls DLM Australia Pty Ltd which is claiming $1.186 million, he will swing a lot of voting influence if Lavin opts to seek creditor approval for a composition or scheme of arrangement under Section 73 of the Bankruptcy Act.
Alternatively, if Billy Buckle is found to be trustee of the Wylde Family Trust then Lucan won't have the opportunity to sell Wylde Street and distribute any proceeds to creditors - including Gertos, though in that scenario he would control the apartment via his beneficial ownership of Billy Buckle's one share.
It's instructive to note that in his DIRI Lucan describes Gertos as a "... previous Director of Billy Buckle Pty Limited". This suggests that as at the date of his report he'd not accepted that the Wylde Street apartment is held on trust, or that Billy Buckle is trustee of the Wylde Family Trust.
Gertos will likely have something to say about that, given the transfer documents lodged with ASIC and given ownership of Wilde Street is crucial to determining which assets will be available for distribution.
Gertos' solicitors advised that they were unable to obtain instructions in relation to SiN's queries but said they would advise Gertos to "make no comment at this stage due to legal proceedings".
The question of ownership of Wylde Street is also linked to the references in Lucan's report about Supreme Court orders dated 7 February, 2014 which are registered on title imposing certain restraints on dealing with or further encumbering the property. "There are unregistered dealings that were filed after these orders were made," Lucan said.
The dealings - detailed in Lucan's report - include an application to record a new registered proprietor of Wylde Street that is stamped and dated June 24, 2014 and refers to a new trustee being appointed on September 13, 2013.
Another dealing carries a date stamp of July 7, 2014 and shows a discharge of the mortgage over Wylde Street executed by Westpac. The document is dated December 31, 2013.
Finally there is a document stamped and dated July 15, 2014, which records the mortgagor as Billy Buckle Pty Limited and is signed by Dolores Lavin as sole director and secretary. Westpac is the mortgagee and the document is dated December 31, 2013.
"My investigations are continuing and I am obtaining legal advice with regard to beneficial ownership of the property, the alleged trust and vesting," Lucan told creditors. "I cannot estimate the likely recovery from this source at this time."
As those investigations proceed Lucan will know that in addition to the complexities he must untangle, there's a referral relationship between Worrells and Lavin's accountants which may also be at risk.
For those unfamiliar with the earlier chapters of this saga of failed friendship and enduring recrimination, see: EXCLUSIVE: Dolores Lavin declares bankruptcy.
Email SiN
For those unfamiliar with the earlier chapters of this saga of failed friendship and enduring recrimination, see: EXCLUSIVE: Dolores Lavin declares bankruptcy.
Email SiN
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