Thursday, 22 October 2015

Bankruptcy professionals convening for congress

Bankruptcy professionals in between sessions at a previous Congress
Image courtesy: Traill & Associates  
IT'S that time of year that bankruptcy trustees and those who work with them convene for Traill & Associates' annual National Practical Bankruptcy Congress, Workshops (and cocktail party).

Organised by Rosie Traill, whose sister Kate was recently appointed to the bench as a Judge of the District Court, the two day get together of body snatchers focuses on practical issues facing trustees and their staff and advisors, bringing together some of the best and most experienced operators for a series of practical workshops and interactive, informal talks.

Speakers include O'Neill Partners' consulting solicitor Sally Nash, Ferrier Hodgson's John Melluish, Norton Rose partner David Goldman, and barrister Sandrah Foda. The focus is on practical solutions to key issues.

For example, the challenges of complying with the various state and ARITA codes of independence will be examined through a review by Melluish and Goldman of the recent Federal Court decision of BC39 Pty Ltd v Rambaldi in the matter of Wharington (Bankrupt) [2014] FCA 1076 (7 October 2014), where an examination summons triggered an intensive examination of the trustees's independence and the DIRRI regime.

There'll also be a Family Law panel discussion and interactive discussions relating to fees and remuneration; after acquired property; voidable transactions; dealing with creditors, bankrupts and sheriffs. 

Barrister Brian Skinner will also host a discussion around the issues a trustee should consider in determining whether a possession-related matter is best pursued through the Supreme or Federal Court. For the full program see: 3rd Annual Bankruptcy Congress

The Congress kicks off on Wednesday, October 28 with a day-long program that concludes with a cocktail party at the ArtHouse Hotel, across the road from the congress venue at the Wesley Centre on Pitt Street. Enquiries should be directed to Congress organiser Rosie Traill at:

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Tuesday, 20 October 2015

Levi opposes resurrection of company linked to Lazar

Liquidator David Levi
Image courtesy Levi Consulting
SYDNEY Liquidator David Levi is opposing attempts to reregister a company linked to accused fraudster Ian Lazar and his failed Business Australia (BA) Group.

In the Supreme Court of NSW yesterday, lawyer Nick Dale for Levi asked that his client be joined to proceedings seeking to reregister Terra Cresta Business Solutions (TCBS).

Dale told the court his client opposed the company's reinstatement and denies the various allegations, which he described as "false and malicious" contained in the affidavit of Owen James Salmon, a former director and shareholder of TCBS who wants the company restored.

Information obtained by SiN indicates that some of those allegations relate to Levi's alleged failure to adequately investigate the actions of TCBS' former lawyers during his time as liquidator.

Levi's lawyers refute those claims, arguing that Salmon had failed to provide Levi with all pertinent information relating to TCBS's affairs and that Levi had been prepared to conduct public examinations but had not been supplied with the necessary funding. Levi did not respond to SiN's enquiries seeking to understand his reasons for opposing TCBS's reregistration.

The Australian Securities and Investments Commission (ASIC), which is first defendant in the proceedings, indicated it would not object to reinstatement on the condition that Levi be given an opportunity to be heard. Salmon had wanted the application heard ex-parte.

Salmon wants TCBS reregistered so he can pursue claims relating to charges that TCBS held over two entities in Lazar's BA Group, Business Australia Capital Finance (BACF) and Business Australia Capital Mortgage (BACM).

TCBS had supplied consulting and bookkeeping services as well as loans to the BA Group. In 2006 it attempted to enforce the charges - valued at in excess of $2 million - by appointing Hall Chadwick partner Richard Albarran and former partner Geoff McDonald as receivers of the two entities.

Friday, 16 October 2015

Hawaii - attend a conference, obtain a tan

Honolulu, Hawaii could be the location for a new kind of insolvency conference in 2016.
IT's early days but Sydney lawyer Paul Fordyce is planning to launch a restructured insolvency conference format that he thinks could blow rival events out of the water.  The fact that he intends staging his conference in Hawaii won't detract from its allure. 

Over a coffee this week Fordyce explained how the three day event would canvass topics in a way radically different to the usual approach which is to run days full of lengthy presentations which he says force speakers to pad out their speeches with unnecessary material.

Under the Fordyce format speakers will address key topics as if they were presenting a TED Talk. Instead of one speaker having to fill an hour on cross-border insolvency law for example, three would be allocated 20 minutes.

The PMF Legal principal said he's negotiating with an eclectic range of potential keynote speakers including Czech economist Tomas Sedlacek who authored the Economics of Good and Evil, Robert J Faris, the Hawaiian District Bankruptcy Judge and Charles Booth, Professor of Law at the University of Hawaii and an expert in Asia Pacific insolvency law.

Thursday, 15 October 2015

Tidbits from the transcripts - Cameron slams liquidators at construction inquiry

Labor Senator Doug Cameron
IT is SiN's opinion that the term 'farcical' might just creep into the general discourse around a senate inquiry when much of a session is dominated by the inquiry's architect busting attendee's testicles.

The session in question took place when the Senate Economics References Committee's Inquiry into Insolvency in the Construction Industry rolled into Sydney recently.

Leftwing Senator and unionist Doug Cameron, who is driving the inquiry, did the busting; Senator Sam Dastyari acquitted himself as chairman except when walking around with his shirt hanging out discussing travel arrangements with staff; South Australian Senator Sean Edwards mostly listened and Senator John 'Wacka' Williams didn't show.

Those subjected to Cameron's McCarthyist fervour included a pair of execs from credit reference agency Veda Advantage, the chief executive of the Australian Restructuring Insolvency and Turnaround Association (ARITA) and various commissioners and deputies from the Australian Securities and Investments Commission (ASIC) and the Australian Tax Office (ATO).

The inquiry is focussed on addressing phoenix activity in the construction sector, which has been estimated to cost the economy as much as $3 billion annually and Cameron told ARITA chief executive John Winter that liquidators are a big part of the problem.

Thursday, 8 October 2015

Ousted Hathway launches new firm

Helm Advisory founder Stephen Hathway (R) with
senior manager Adam Preiner.
Photo: SiN Images
STEPHEN Hathway hasn't wasted time. Little more than a month after being ejected from the SV Partners' Sydney practice he co-founded, Hathway is up and running with a new outfit he's dubbed Helm Advisory.

ASIC records show Helm Advisory Pty Ltd was registered on August 31 and SiN dropped into the new offices at 32 Martin Place yesterday to meet the team.

The core is made up of SV defectors. There's senior manager Adam Preiner, senior accountant Yuhan Tan and supervisor Alvin Yu. Their decision to break with SV was critical in ensuring Hathway could continue managing the appointments he brought with him.

Including the founder and the SV three, Helms' initial complement is seven but Hathway said he's on the lookout for another registered liquidator and possibly a trustee in bankruptcy to complete the team, which he sees as operating firmly in the SME debtor space.

"There's a whole discussion about what is the ideal size of a debtors insolvency practice," Hathway said. 

"The trap is growing it to a size where you start building a head office and the head office starts charging and some people in the head office don't believe they have to work on the files and they just become something that has to be paid for," he said. 

When contacted SV Partners' managing director Terry van der Velde, dismissed suggestions that Hathway's axing and the loss of three staff would precipitate further redundancies at the Sydney practice. 

"We are certainly not making anyone redundant, in fact there are top quality candidates in the market at present so it gives us an opportunity to hire them," van der Velde said.

See also: SV ditches executive director

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Tuesday, 6 October 2015

Fees continue to flow for Octaviar's appointees and advisors

Legal fees and costs orders are revealed
in Octaviar's latest accounts
THE latest accounts for Octaviar Administration (OA) show that Bill Fletcher and Kate Barnett earned almost $370,000.00 in fees in the past six months, taking total remuneration since they were appointed to $23.125 million.

The Bentleys' pair were installed as liquidators of OA and Octaviar Limited (OL) in September 2009 after the Public Trustee of Queensland, acting on behalf of creditors, removed Deloitte's John Greig and Nicholas Harwood.

By December 2012 Fletcher and Barnett had generated $15.7 million in fees on the OA side. Since then they've charged an additional $7.425 million for doling out dividends and, until this year, flinging cash from OA's bulging treasury accounts at a range of litigious stratagems.

However with the liquidation of OA and OL forecast to end in June 2016 it appears that they've drawn a line under the legal actions, including their costly pursuit of US finance house Fortress Credit Corporation

In May this year - at around the time that OL's special purpose liquidator reached a $12.35 million settlement with Fortress - Fletcher and Barnett settled their disputes. Though the precise terms have yet to be prised out, SiN understands OA's settlement required payment of Fortress's legal costs. In this respect a reference in the accounts to $2.35 million paid to the trust account of Fortress's solicitors, Baker & McKenzie, may be instructive.

Friday, 2 October 2015

ATO wind-ups near record in September

Chart courtesy Insolvency Notices
THE taxperson's new found enthusiasm for pursuing inveterate non-payers continues to impress. Figures obtained from Insolvency Notices reveal that the Australian Taxation Office (ATO) initiated 568 wind-up applications during September, strengthening expectations that this year's sharp lift in legal action to force companies to liquidate or comply, will endure.

September's number was second only to the record 582 wind-ups filed by the ATO in May and far exceeds the 92 per month long term average. However with approximately $20 billion in outstanding tax debt owed by small and medium sized enterprises (SMEs), much of it now shifting to a more mature tier of arrears, the real question is: Why hasn't the ATO acted earlier?

Perhaps it was waiting for more robust economic growth? Hypothetically, a buoyant economy absorbs increased debt collection and liquidations without missing a step. Higher turnover may even spur growth.

But if that was what was keeping the tax collectors on a short leash then the decision earlier this year to stop treating SMEs like infants and instead enforce the law may have been triggered by a very different theory, one based on expectations of recession. Not that the ATO is likely to admit to that.

It will however admit that the increased rate of wind-ups is off a very low base. It will also point out that approximately half of the applications never proceed to winding up. And that perhaps is the most beneficial consequence of this new willingness to act. When faced with the genuine threat of liquidation, recalcitrants often discover money. And the burden on the compliant is lessened, albeit imperceptibly.

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