EXCLUSIVE: Liquidator's fall exposes Ella Rouge founders to phoenix allegations

THE founding directors of the Ella Rouge Beauty chain allegedly engineered a phoenix company transaction in 2008 because demands for unpaid payroll tax, workers compensation and other debts threatened to destroy their business.

According to the recently released findings of a liquidator's disciplinary hearing, in early 2008 Mr Ali Hammoud and his wife Ms Manel Issa-Hammoud completed the transfer of assets worth approximately $4 million from their company Ella Rouge Beauty (ERB) to a second company they controlled, Beauty World International (BWI).

The transfer of ERB's assets to a related party via a Business Sale Agreement took place on or around March 28, 2008 but was subsequently backdated to February 28. At the time of the transaction, BWI was the trustee of the Hammoud's Shanel Family Trust. On March 28, ERB changed its name to ERB International Pty Limited.

On April 2, the directors placed ERB International into liquidation, appointing Pino Fiorentino and Bill Hamilton of Hamiltons Chartered Accountants as joint liquidators, with Fiorentino having primary, day-to-day responsibility. The following day, they registered a new company, Ella Rouge Beauty Pty Ltd. This would go on to replace BWI as trustee of the Shanel Family Trust.

In a visualization of their corporate interests provided by Encompass Corporation Ali Hammoud and Manel Issa (Hammoud) were confirmed as  sole directors and shareholders of ERB and BWI at the time the transfer, name change and liquidation were effected.

The Australian Securities and Investments Commission (ASIC) - which has confirmed to Sydney Insolvency News that its investigation into ERB International is ongoing - has alleged that the Business Sale Agreement amounted to a phoenix transaction, which left an insolvent ERB with no valid claim against BWI and debts of approximately $800,000, owed to the Office of State Revenue (OSR), GIO, and specialist workers compensation claims manager Gallagher Basset.

In spite of the allegations, it should be noted that no findings of wrongdoing have been made against Ali and Manel Hammoud. Neither replied to multiple requests for comment.

The allegations have surfaced following a lengthy investigation by ASIC into the conduct of the company's liquidators.

Obeid's Streetscape DoCA terminated

Streetscape Projects director
Moses Obeid. Photo: Optus Zoo

THE deed of company arrangement (DoCA) governing Moses Obeid’s Streetscape Projects is toast after a court yesterday ordered the controversial DoCA be dissolved.

In the NSW Supreme Court, Justice Ashley Black terminated the deed and, under the relevant sections of the Corporations Act, ordered that the termination give the same effect as if a special resolution to wind the company up had been passed.

As a consequence deed administrators Ozem Kassem and Robert Kyte of Cor Cordis are out and Deloitte’s senior insolvency operator David Lombe is in. 

Appointing Lombe as  liquidator is a victory for City of Sydney Council, which brought the application as Streetscape's major unsecured creditor. 

Lombe to oust Ozem if Obeid DoCA voided

David Lombe
Photo: Deloitte

DELOITTE's David Lombe is queued to liquidate the Obeid-backed Streetscape Projects if an application before the NSW Supreme Court succeeds.

Filed by major unsecured creditor City of Sydney Council, the application seeks to reverse a controversial deed of company arrangement (DoCA) executed on August 9, 2012 at a meeting of Streetscape’s creditors.

Bentleys' Barnet examined on viable voidables

Bentleys Katherine Barnet leaving the Supreme Court
Photo: SiN Images

Being cross-examined can’t be fun for any liquidator and Katherine Barnet won't feel like the one who dodged the bullet after fronting the NSW Supreme Court yesterday. 

The insolvency specialist and director at Bentleys Corporate Recovery was brought in to talk about failed property investment group Octaviar.

She began by getting confused about which of the two witness boxes to occupy.

Perhaps the courtroom atmosphere was distracting. It smelt like the aftermath of a prolonged inundation.

Then, having been sworn in and seated, Barnet faced six senior counsel - including Bernie Coles QC.

Along with her Bentleys’ colleague William Fletcher, Barnet is official liquidator of Octaviar Administration Pty Ltd and Octaviar Limited.

Ed Hardy boss's bankruptcy boo boo

Gary Berman with Tara Reid.
Photo: Cameron Laird

BAD fashion transcends borders, which is why SiN can report on the bankrupting of one-time Melbourne clothing entrepreneur Gary Michael Berman.

Berman is the man who brought the Ed Hardy clothing brand to Australia. 

While this was not a crime, Federal Magistrate Daniel O’Dwyer recently pointed out that making an incorrect entry in a debtor's petition potentially is. 

“The details provided in a Debtor’s Petition are required to be accurate,” and “.…. should the requisite declaration that the details are correct made in support of the application prove to be false there is the potential of a criminal sanction of imprisonment for 12 months,” O”Dwyer wrote in his December 15, 2011 judgement.

O'Dwyer was commenting on the response Berman made to question 33 of his debtor's petition, which the former Ernst & Young accountant filed on May 17, 2011, almost 12 months after his stable of Ed Hardy outlets closed its doors. Question 33 requires a debtor to list transfers of assets and gifts made in the preceding five years.