Levi complies with order on Terra Cresta

David Levi opposed
reinstatement
of Terra Cresta.

SYDNEY liquidator David Levi is known as a stickler for detail so it is passing strange to discover he took more than three months to comply with a court order.

On November 2, 2015 Supreme Court registrar Rebel Kenna ordered that the books and records of Terra Crest Business Solutions Pty Ltd (TCBS) be delivered to Schon Condon, who was appointed liquidator the same day when the company's former director, Owen Salmon, successfully applied for its reinstatement.

SiN's sources have advised that the TCBS files arrived at Condon's offices in Parramatta on February the 16th, 14 weeks after the date of the order.

When contacted, Condon confirmed that he'd received the material but wouldn't say when it had arrived. He did however say he'd not yet gone through it. Levi did not respond to questions and requests for comment.

What SiN has learned independently is that it was initially represented to Condon by an unidentified party that the books and records of TCBS comprised 160 boxes.

As any insolvency practitioner knows, storing reams of paper incurs a cost and as a general rule liquidators in possession of truckloads of files are only too happy to pass the burden to whomsoever the court instructs. But Christmas and New Year can of course frustrate the best efforts to comply with the wishes of the court and so Condon waited. And waited.

Levi was appointed liquidator of TCBS on August 4, 2008 following an application to the court by colourful insolvency identity Andrew Wily and even then, the files were a point of contention. 

Hathway blasts ASIC statement on VU

Helm Advisory's Stephen Hathway
Photo: SiN Images

HELM Advisory founder Stephen Hathway was in a somewhat indignant state when SiN called last night to get the skinny on his recent brush with the compliance cops.

Around midday yesterday ASIC released a statement advising that Hathway had given the regulator a voluntary undertaking (VU) to implement firm-wide training at Helm Advisory, the firm Hathway founded in October last year after being axed from SV Partners.

Since SiN broke the story of his departure from SV in September, it's been unclear what caused the falling out between Hathway and SV managing director Terry Van Der Velde. But an unfavourable ASIC compliance review that could be laid at Hathway's feet might explain it.

When contacted, Hathway was more interested in attacking the wording of ASIC's press release, pointing out that despite the compliance failures identified taking place while he was at SV Partners, the ASIC statement makes no mention of his former firm.

"This is appalling because the firm (Helm Advisory) only started in October (2015) and the offences that've been represented in this report were all related to SV Partners," he said.

"I think it's a terrible misleading statement by ASIC but I can't do anything about it."

Asset freezing proceedings dismissed by consent

Jarrod Siorecki: Obtained
freezing orders against a
former director. 

Insolvency Guardian managing director Jarrod Siorecki has chosen not to pursue asset freezing orders against the former director of Insolvency Guardian Melbourne.

Siorecki sought an urgent ex-parte hearing before Justice James Edelman late on Monday, February 8, 2016 and was granted freezing orders the following day. But on March 11, the judge ordered the proceedings be dismissed by consent.

Initially Justice Edelman had made orders against Philip Anthony Carlei, formerly Insolvency Guardian Melbourne's director and Zuppa Soup Kitchens Pty Ltd, a company controlled by Carlei, freezing assets to the value of $400,000. 

It should be noted that at the time of the application Carlei had not had an opportunity to respond to Siorecki's allegations, which are outlined in a judgment attached to the orders. 

Carlei's Linked In profile lists his most recent employment as being an area manager for Baker's Delight. There are also references to stints at RSM Bird Cameron and Hall Chadwick but no mention of Insolvency Guardian Melbourne.

Former Insolvency Guardian Melbourne
director Phil Carlei

Nor were the allegations tested. SiN heard from Victorian sources that Carlei was overseas. 

Carlei was a contractor who began working as the sole representative of Insolvency Guardian Melbourne in February, 2014.

In January 2015 he was made a director of Insolvency Guardian Melbourne. From that point he was to be paid 50 per cent of the fees charged by Insolvency Guardian to all clients he introduced to the organisation. Then in mid-December 2015 Carlei told Siorecki that he intended to resign.

The announcement came about a week after Siorecki decided - on December 9 - that Insolvency Guardian Melbourne would cease trading because: "The Melbourne office did not reap the same financial rewards as the Brisbane office".

Why ASIC's gunning for Victorian liquidator

ASIC wants Ross McDermott
deregistered

ASIC's pursuit of a Federal Court inquiry into Ross McDermott is focussed on determining whether the Victorian insolvency practitioner (IP) faithfully fulfilled his obligations in terms of his duties and entitlements across 26 companies.

However apart from listing the 26 companies across four schedules ASIC's originating process doesn't give much away. The inquiry sought falls under under Sections 536 and 477 of the Corporations Act and ASIC wants orders banning McDermott from holding the position of registered and official liquidator for as long as the court sees fit. McDermott told SiN this week he did not want to comment at this time.

The regulator also wants him removed from his role as either liquidator, voluntary administrator or deed administrator of the 26 companies listed in the four schedules. If the inquiry supports ASIC's application an IP in the regulator's good books could pick up a ton of work.

Beyond that though, there's not much detail. The matter is due to return to the Federal Court on April 8, 2016. However a clue as to why McDermott's been targeted can be found in a judgment handed down in the Victorian Supreme Court in 2013.

In Ross John McDermott V Conalpin Pty Ltd and Dolmear Pty Ltd, Victorian Supreme Court judge John Efthim rejected an application by McDermott seeking to have his remuneration as liquidator of Conalpin Pty Ltd and Dolmear Pty Ltd approved. Both companies - which were the defendants in McDermott's application - are listed in ASIC's schedule of 26.

How did FTI trump Hall Chadwick for Yabulu?

Hall Chadwick's Brent Kijurina was part of
team that visited the Yabulu refinery.

FTI Consulting might have first been contacted about a VA appointment to Queensland Nickel Pty Ltd (QN) on Sunday January 3 but according to reports in The Australian newspaper, rival firm Hall Chadwick had a team on the ground at QN's Yabulu nickel refinery in Townsville the following day.

The report, published on Thursday January 7, put Hall Chadwick's Richard Albarran, Jovandeep Singh, Mathew Badcock, and Brent Kijurina at Yabulu from Monday January 4. The four reportedly spent several days assessing the refinery's financial position while in crisis talks with QNI chief financial officer Darren Wolfe and others.

At the same time, QN's owner, former director and controversial parliamentarian Clive Palmer was negotiating with FTI, though this wasn't made public until January 20 when FTI, by then installed as voluntary administrators, distributed a circular to QN creditors outlining a timeline of meetings stretching back to October 11, 2015.

So how was it that Hall Chadwick came to be there? Were Kijurina and his colleagues lured north as part of an impromptu insolvency beauty pageant? Did Palmer, who has a long association with FTI, put some competition on site to test the market? Ultimately he opted for FTI, which now has carriage of an insolvency worth millions in free publicity. Was the Hall Chadwick crew even in the running and if so, did something work against them?

The answer is a mystery but a well-placed bad referral couldn't have helped. SiN has learned that a former client of Hall Chadwick contacted QN's sole director, Clive Mensick after reading The Australian's report on January 7.

Zigmont "Ziggy" Gniot is a self-declared bankrupt who knows Mensick through their mutual support of Palmer's failed soccer team Gold Coast United. When Gniot read the Australian on January 7, he jumped on the phone to regale Mensick with an account of his own experience with Hall Chadwick.

Cor Cordis pair forced to liquidate developer's delinquents

Ozem Kassem
Image courtesy Cor Cordis

Cor Cordis partners Ozem Kassem and Daniel Jurotawitch must continue winding up two companies controlled by Sarkis Nassif after a judge rejected the millionaire developer's application to terminate the liquidations.

Citing a lack of evidence and concerns that the companies may have exhibited "a lack of commercial morality," Justice Stephen Robb had invited the applicants to bring fresh evidence but the deadline for that passed this week, meaning Kassem and Juratowitch must continue liquidating two companies the judge said have neither assets nor liabilities.  

"I am also not satisfied on the present evidence that I should make the orders sought, because of a real issue of whether the companies were used, or conducted their activities in a manner, which exhibited a level of commercial immorality that would justify refusal of the orders," the judge said in a recent judgment.

"There are grounds for questioning whether 

Daniel Juratowitch
Image courtesy Cor Cordis

the taxation affairs of the companies were conducted having proper regard to the obligations of the companies to comply with the relevant taxation laws."

Justice Robb did concede that the initial reason for placing the companies into liquidation: "may have been the disallowance of a claim that the purchase of the Property did not involve a taxable supply, and that expectation was disappointed by the position adopted by the ATO."

And he emphasised that his concern in regards to agreeing to the application was an absence of sufficient evidence, "rather than any positive finding of the existence of conduct that would cause the court to exercise its discretion against making orders to terminate the windings up".

"However, the evidence suggests that both companies may have been seriously delinquent in relation to aspects of their taxation obligations. It is unfortunate that the apparent absolute confidentiality of the settlement agreement with the ATO impedes the illumination of this question."

Nassif's application - lodged in the Supreme Court of NSW in October 2015 - sought orders terminating the liquidations of Avenue Capital Investment Pty Ltd (ACI) and 82 - 84 Belmore Street Pty Ltd respectively. Nassif is ACI's sole shareholder. 82 - 84 Belmore is controlled by Holdmark Holdings, another Nassif-controlled entity.

ASIC eyeing VA over 3D Printing Group

MACKAY Goodwin's Domenic Calabretta has told SiN he had no idea ASIC was investigating the administration of 3D Group Pty Ltd, a Victorian-based 3D printing technology outfit.

Currently overseas, Calabretta expressed surprise when told that 3D Group - which he controlled first as voluntary administrator and then as administrator of a Deed of Company Arrangement (DoCA) - was being investigated by an ASIC specialist stakeholder team.

"In regards to the alleged ASIC investigation ... I have not been made aware of such investigation," Calabretta said.

"The creditors in 3D have been paid out 100 cents in the dollar. The reason the creditors were paid so high was due to a successful Deed of Company Arrangement and subsequent Creditors Trust.

"The alternative for creditors would have been a return between 0 and 9 cents in the dollar, which would have been catastrophic for the creditors - hence the formal restructure conducted by Mackay Goodwin provided an excellent result," Calabretta said.

ASIC refused to comment when contacted on the basis that it never comments on "operational matters".

SiN is aware that ASIC has been looking at 3D Group since last year but it is not known if it has concluded its investigations or if it has made any findings.