Monday, 30 November 2015

Arrest warrants voided as accountants appear

From Left: Bill Gertos, solicitor James Jordan
Therese Alha and Constantine Savell
Photo: SiN Images
APPARENTLY they never knew. About the summonses to attend for public examinations, about the orders to produce documents or about the warrants for their arrest, issued after the summonses expired uncomplied with. Accountants Bill Gertos, Constantine Savell and Therese Alha. No idea.

The Federal Court heard as much last Friday in room 19c around 3.00pm. Registrar Chaun Ng warned the three that they must appear when summonsed. Seated in the front row of the public gallery, Gertos said that if he had known about the summons, "I would've been here".

The three, all connected to Camperdown firm Gertos Savell Katos (GSK), were originally summonsed to appear on Monday, November 23, 2015.

Lawyers acting for creditors of bankrupt artistic agent Dolores Lavin are keen to scrutinise arrangements which have seen title to a $3.8 million Potts Point apartment pass from a family trust controlled by Lavin as trustee to a family trust controlled by a trustee company called Billy Buckle Pty Ltd controlled by Gertos.

Of the three only Savell was delivered to the court under arrest. His lawyer James Jordan portrayed it as unfortunate and unnecessary, telling the registrar that five minutes after Savell had advised him he was preparing to surrender voluntarily, a pair of agents from the Australian Federal Police executed the warrant and brought him in. Alha and Gertos surrendered voluntarily.

Unaccustomed to issuing arrest warrants, Registrar Ng accepted undertakings from the three to comply with their summonses and declared the arrest warrants void. The summonses now require Gertos and Savell to produce documents and Alha to present herself for examination tomorrow.

Thursday, 26 November 2015

Last chance for Amirbeaggi negligence claim

CYNICS might see irony in a solicitor complaining about the "anxiety, distraction and disruption that litigation causes". Facilitating the workings of justice provides plenty of scope for misery to be visited upon those caught in the cogs of the law - and sufferers are almost invariably the legal profession's clients.

This time though Sydney solicitor Farshad Amirbeaggi is the one enmeshed, thanks to a professional negligence action launched by an aggrieved developer.

The main problem is that whilst the $2.7 million claim was launched in February this year, the plaintiff has since provided little in the way of propulsion.

Six deadlines have passed without the promised or ordered amended statement of claim materialising. The plaintiff - who has the misfortune to be one of the parties mired in the Joe & Joe Developments imbroglio - complains he has insufficient funds to advance the action. Amirbeaggi, who is vexed by the claim and its attendant publicity, wants the proceedings dismissed.

In a judgment published on Tuesday Supreme Court Justice Ian Harrison quoted Amirbeaggi's complaint about the "anxiety, distraction and disruption" in ruling that while it would not be appropriate to dismiss the claim, the plaintiffs should pay Amirbeaggi's costs, which the judge observed were not at this stage onerous. He also expressed a  degree of skepticism about the plaintiff's avowed poverty as the reason for the action's sluggish progress.

"There can be no doubt that the plaintiffs have disregarded orders with which they would have been expected to comply," Justice Harrison said.

"I am less certain that their failure to do so is the result of financial considerations that have disrupted their ability to secure appropriate legal assistance. The evidence about that is unsatisfactory as the defendants have emphasised," Justice Harrison said.

Wednesday, 25 November 2015

Arrest warrants issued for Lavin's accountants

Accountant Con Savell of Gertos, Savell Katos
THE wash up from day one of public examinations into the bankrupt estate of artistic agent Dolores Lavin culminated in the issue of arrest warrants for her accountants and an application by Lavin to be excused from her examination on undisclosed medical grounds.

Late on Monday afternoon Federal Court Registrar Chuan Ng issued warrants for the arrest of Bill Gertos, Con Savell and Therese Alha. Barrister Geoff McDonald, who is representing Lavin and others summoned to appear advised by text message late yesterday that the accountants would appear at the court today.

All three are connected to accounting firm Gertos Savell Katos in Camperdown, though a testy receptionist told SiN over the telephone that Bill Gertos had no association with the accounting practice whatsoever.

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), Lavin's trustee in bankruptcy 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."

In his initial report to creditors Aaron Lucan showed 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.

Friday, 13 November 2015

Crowe-Maxwell returns in non-insolvency role

Atle Crowe-Maxwell - COO at Omniwealth
Photo: SiN Images
ATLE Crowe-Maxwell has taken on the position of chief operating officer (COO) at non-aligned wealth advisor Omniwealth, four months after he left BDO in the middle of a restructuring that saw then East Coast practice chief Grant Brant axed.

Speaking to SiN this week, Crowe-Maxwell, who lost his Father earlier this year and was on extended leave when Brant's position was terminated, said his new role represented a change of direction after two decades in restructuring and insolvency.

"This is about businesses that don't have a strategic plan but are nevertheless run well," he said.

"It's about asking the owners what they want their business to look like; it's devising a plan to take it there and asking the necessary questions, like 'does it have the right funding mix'?

His decision to diversify out of pure insolvency is a recognition that the profession is going through tough times, and that his two decades of experience can be utilised more broadly.

"At BDO we were in a pretty good spot in terms of the relationships and the connections that we had but the work was just not there," he said.

Tuesday, 10 November 2015

Tidbits from the Transcripts - construction inquiry to receive list of suspect liquidators

Senator Doug Cameron will soon have a list of liquidators
connected to repeated construction sector failures.
A list of liquidators of interest is to be delivered to the Senate References Committee's inquiry into insolvency in the construction industry.

At the inquiry's final public hearing in Canberra, senior officials from the Department of Employment told chief inquisitor Senator Doug Cameron how as part of administering the Fair Entitlements Guarantee scheme (FEG), they gathered intelligence about individuals who preside over entities which repeatedly collapse with insufficient assets to pay employee entitlements.

Included in that intelligence are the names of those liquidators who consistently appear as 
the suspect directors' preferred appointees.

"Every six months FEG provides a list of data to ASIC that includes the case names, the amounts paid, the directors' names and the liquidator's names," FEG branch manager Sue Saunders told the inquiry.

"Every six months we provide data to the ATO that is more specific to the phoenixing agenda in the sense that it provides the names of every case and every director where the same director has been listed for more than one case under FEG.

"The information we gather about the cases that become insolvent and leave unpaid employee entitlements to be met under GEERS or FEG is useful intelligence to feed into the other range of information the ATO and ASIC are collecting that builds their risk profile around certain operators in the industry," Saunders said.

Friday, 6 November 2015

Coshott win could be curtains for Prentice

BPS Recovery partner
and bankruptcy trustee
Max Prentice.
MAX Prentice's grip on the bankrupt estate of Robert Gilbert Coshott may have loosened a tad this week after Federal Court judge Jayne Jagot on Tuesday overturned the decision of her Circuit Court counterpart Rolf Driver on appeal from the bankrupt's brother.

In May Judge Driver ruled on an application by Ronald Michael Coshott and Fewin Pty Ltd seeking confirmation of their status as creditors in the bankrupt's estate and an order compelling Prentice to call a meeting of creditors. In rejecting the application Judge Driver expressed doubts about aspects of the applicants' claim.

"I have a general difficulty with the asserted assignments of debt from Fewin to Mr RM Coshott," Judge Driver said in his judgment of May 29, 2015.

".... there is no reliable evidence of any consideration for those assignments. The evidence advanced by the applicants consists of the minutes of a meeting of Fewin held on 23 August 2013 where it was resolved that $359,487.08 payable by Mr RM Coshott under the deed of assignment of debts from Fewin to Mr RM Coshott be paid by way of repayment by Fewin of moneys allegedly owed by Fewin to Mr RM Coshott, and that the company’s accounting records be adjusted to reflect this. The minutes are signed by Mr RM Coshott," Judge Driver said.

"There is, however, no other evidence of the asserted debt owed by Fewin to Mr RM Coshott . He was called upon to produce the books and records of Fewin for the purposes of these proceedings but nothing material was produced. I infer that such records of the company as may exist would not have assisted him," Judge Driver added.

Wednesday, 4 November 2015

Octaviar: $514 million proof of debt up for appeal

RSM's David Kerr has $514 million reasons
to smile
OCTAVIAR's general purpose liquidators Kate Barnett and Bill Fletcher were served a major setback in the NSW Supreme Court yesterday.

In handing down his judgement Justice Paul Brereton ruled that RSM's David Kerr - currently special purpose liquidator of Octaviar Limited (OL) - can apply to extend his powers, paving the way for an appeal of Barnett and Fletcher's rejection in April 2014 of a $514 million proof of debt (PoD).

The PoD was lodged on April 11, 2011 by OL's former receiver, Steve Parbery of PPB. The judge said that if Kerr were to appeal then the Bentleys pair - as general purpose liquidators of OL and its subsidiary Octaviar Administration (OA) - would be in an untenable position.

"It is plain enough that, in respect of any such appeal, the liquidators would be in a position of conflict - as liquidators of the appellant OCV (OL) prosecuting the appeal, and as liquidators of the respondent OA opposing it," Justice Brereton said.

The judge also raised the prospect that Barnet and Fletcher may have engineered their potential disqualification as liquidators of OL when they settled their long running litigation with Fortress Credit Corporation in May this year.

"The issue arises because the general purpose liquidators of OCV (OL) are, in their capacity as liquidators of OA, "officers" of OA, and it appears possible, although it is not entirely clear, that the settlement of the OA/Fortress proceedings involves OA taking an assignment from Fortress of security held by Fortress over the assets of OCV (OL).

"If so, the liquidators qua liquidators of OA may thus have become officers of a "secured party" of OCV (OL), so as arguably to be disqualified from acting as liquidators of OCV (OL) by operation of Corporations Act, s 532(2)(c)(ii).

"It suffices to accept that there is a presently unresolved and not insignificant possibility that the general purpose liquidators may be disqualified from continuing to act as liquidators of OCV (OL)," the judge concluded.