Tuesday 22 March 2016

Skepticism spurred as innovation statement foments debate

Condon Group guests enjoying rooftop hospitality. Photo: Condon Associates Group
THE changes to insolvency mooted in the Federal Government's Innovation Statement provide an ideal opportunity for insolvency practitioners to host seminars. There the invited can hear the pros and cons debated then opine at length during the drink and nibbles that invariably follow.

Last week Schon Condon, James McPherson and the rest of the Condon Associates team were at it, packing their conference room on Level 6, 87 Marsden Street Parramatta.

Guest speaker Stephen Mullette focussed on the proposal to reduce the default bankruptcy period from 36 months to 12. The Matthews Folbigg principal outlined how the idea has had previous incarnations and expressed ambivalence about its benefits.

Could a bankrupt acquire an informed appreciation of where they might have gone wrong in such a short time? Mullette wasn't sure. Early discharge would not restore their credit rating any quicker. And a shorter term might incite high income earners, precipitating a wave of debtor's petitions and diminishing the number of Personal Insolvency Agreements (PIAs) entered into.

Friday 18 March 2016

Insolvency Guardian: action against ex-director dropped

Former Insolvency Guardian Melbourne
director Phil Carlei
ORDERS freezing the assets of the former director of Insolvency Guardian Melbourne have been dismissed.

In the Federal Court last week Justice James Edelman ordered that the proceedings brought against Phil Carlei by Insolvency Guardian principal Jarrod Siorecki be dismissed by consent. There were no orders as to costs. Neither Carlei or Siorecki responded to requests for comment.

The orders bring to an end an action that began on February 8 this year when Siorecki made an urgent, ex-parte application before Justice Edelman. 

The following day the judge ordered that assets to the value of $400,000 controlled by Carlei be frozen. Carlei is believed to have been overseas at the time. If the parties have since reached a settlement, you can bet it's confidential.

Further reading: Insolvency Guardian asset freezing action dismissed by consent

Got a SiNful tale to tell?

Tuesday 15 March 2016

Keeping it Civil as creditors dump Jirsch

Jirsch Sutherland's Daniel Civil (L)
IT was fortuitous that no vases were present in the Ming Room at 3 Spring Street last Friday because the unsecureds in attendance were fit to topple a dynasty.

When they learned that the patriarch had had a seizure, they laughed. When the contents of his doctor's certificate were divulged, derision and cynicisms were elicited. When told he was too ill front, they overthrew his liquidator instead.

The occasion for this intransigence was the first meeting of creditors of Bermuda Constructions, a family-owned builder placed into liquidation at the behest of its director, Philip Keith McDonald, 64 of Vaucluse and its shareholders, son Ben Robert McDonald, 32 and wife Jo-Ann.

After being referred to Jirsch Sutherland by their external accountant Peter Chu, the McDonalds met with partner Daniel Civil several times and he was appointed liquidator on March 1, 2016, with Otim Oluk as his right hand man.

For unspecified reasons, PKF had been engaged as the company's accountants from June 2015 and SiN understands PKF senior manager Sam Musgrave attended St Joseph's college at Hunters Hill with Ben McDonald. But in his Declaration of Independence, Relevant Relationships and Indemnities (DIRRI), Civil said the McDonalds were referred to him by Chu.

He detailed in his first report to creditors that Bermuda has debts in excess of $823,000. He said the McDonald family had told him it failed because of an unpaid debt owed to the company in the order of $100,000.

The family's lawyer - insurance specialist Ian Enright - was invited to read a statement to creditors. A dispute over a development in Mosman, they heard, had cost the company dearly. Keith and his family were "devastated".

Friday 11 March 2016

KPMG Brisbane partner expelled from ARITA

THE CVs of KPMG Brisbane's two most      
KPMG partner Ian Hall has been
expelled from ARITA

senior insolvency professionals are sporting fresh bruises after the Australian Restructuring Insolvency and Turnaround Association (ARITA) announced this week that it had terminated their membership.

In a short statement ARITA said that Ian Hall and Chris Giddens have been expelled and their names expunged from the ARITA Register for their refusal to comply with penalties applied as a result of ARITA disciplinary proceedings.

said in a statement today that it believes ARITA's allegations and findings against Hall and Giddens "are erroneous". 

The firm has previously argued that: "Full disclosure of all prior relationships with the company were made to stakeholders and no party raised any concerns about conflict of interest – perceived or otherwise. 

"Mr Hall and Mr Giddens in fact tendered their resignations from ARITA on 18 December 2015. KPMG reiterates its support of Mr Hall and Mr Giddens,” the firm said.

Clause 7.1 (a) (i) of the ARITA constitution however indicates that acceptance or otherwise of a resignation tended by a member of ARITA subject to disciplinary proceedings is a matter for the discretion of the ARITA Board.

Under that provision, a resignation results in automatic termination or suspension: "if the member gives the CEO written notice of resignation, subject to the Board's power to decline to accept the resignation of a member while his or her professional conduct is the subject of an investigation, Company Disciplinary Proceedings, or Disciplinary or Legal Proceedings under clause 8, in which event, the resignation shall take effect from a later date as may be determined by the Board from time to time;".

The proceedings against the pair
KPMG's Chris Giddens:
also booted out
 were commenced after they were appointed administrators of the Mackay-based Engineered Surface Preparation Pty Ltd on May 26, 2014 and then liquidators a month later. 

By August 2015, an ARITA Professional Conduct Committee review had determined that the Brisbane-based pair had not demonstrated sufficient independence, a finding that Hall, Giddens and KPMG have repeatedly rejected.

In a statement issued late last year ARITA said: "the Committee and the ARITA National Board determined that:

Tuesday 8 March 2016

DoCA imminent as Palmer ousts FTI

Palmer United Party chief of staff
James McDonald has abruptly stood down as a
director of Queensland Nickel Sales.
IN the wake of FTI Consulting's removal as managers of the Yabulu nickel refinery in Queensland yesterday, creditors now face the prospect of the operations once again being controlled solely by Clive Palmer's nephew.

Until last Sunday, James McDonald and Clive Mensink were the directors of Queensland Nickel Sales Pty Ltd (QNS), a company first registered in 1972. However McDonald's removal was only made official on Tuesday, one day after it was revealed that QNS had replaced Queensland Nickel Pty Ltd (QN) as the manager of the stricken nickel plant. QN has been controlled by FTI's John Park since January 18 when he was appointed voluntary administrator (VA).

McDonald, who is Palmer's current chief of staff, became a director of QNS in May 2015, joining Palmer's nephew Mensink, Palmer and another PUP loyalist, Phillip Collins on the QNS board.

McDonald's Linked In profile indicates he has extensive experience in organising road shows for IPOs and events management. It also states that he was global marketing director for Blue Star Line until October 2014. Before taking over from Collins as Palmer's chief of staff he was the PUP's lead South Australian candidate for the Senate.

Mensink is also a director of QN, QNI Metals and QNI Resources, the latter pair of companies being the joint venture partners which own the Yabulu refinery and its related infrastructure and assets. Putting QNS in charge of Yabulu's operations and removing McDonald means Mensink is again in sole control of the operations and no longer subservient to the authority of external VAs.

He and the other three directors of QNS became two only recently. Collins resigned on December 31, 2015 and Palmer resigned on January 10. Eight days later Park was appointed VA of QN, which employs the Yabulu workforce and until yesterday managed the refinery operations. Crucially, QN does not own any significant assets. The stage was set for the VA to be sidelined.

Friday 4 March 2016

Fat finger syndrome behind ANZ wind up error

The erroneous listing showing ANZ as being subject to wind up proceedings  
WELL you wouldn't have wanted to be a hung over fund manager yesterday morning, logging on to check the state of the portfolio after a big night out.

If you had then you might've seen that the daily insolvency notices included a listing for the ANZ Bank. Further, the listing showed that the bank was being wound up by the tax office.

According to the notice ANZ was subject to wind up proceedings brought by Gadens Lawyers on behalf of the Deputy Commissioner of Taxation (DCoT).

Imagine the potential reaction of the crapulous fundie if he or she was in charge of a serious parcel of ANZ stock. In their vulnerable state they might've panicked. A precipitous share price plunge could've been accidentally engineered.

Fortunately Insolvency Notices publisher Louttit & Associates realised that Gadens had mistakenly entered ANZ's Australian Company Number (ACN) and was quick to act.

"Correction - AMENDED Insolvency Notices Alert 3 March 2016," read the follow up email.

Wednesday 2 March 2016

BPS sinks rivals at Chartered Accountants regatta

BPS Recovery team winners from (L) Mitchell Ball, Dan Frisken, Rob Pizzie and Max Prentice 
FRIDAY was a triumph for the men and women of BPS Recovery after partner Max Prentice's Ticket of Leave (TOL) trounced the competition at the annual Chartered Accountants Regatta on Sydney Harbour.

With son Matt at the helm, Prentice scooped the Division A teams event, winning the coveted Liquidators Cup in the process. Fellow BPS team skipper Rob Pizzie took second aboard Tonic to entrench the glory among the red and white caps, who continued their dominance back at the Cruising Yacht Club of Australia by securing coveted tables closest to the free paella.

Once the results were announced the only complaints came from Prentice's knees as he made multiple trips to the podium to accept trophies, to take possession of Musto-sponsored prizes and to pose for pictures.