Grant Thornton excoriated over Arrium

Westpac restructuring chief
Gwyn Morgan. 

HELL hath no fury like a banker denied the voluntary administrator (VA) of his choice, as Grant Thornton's Paul Billingham discovered during his truncated tenure as VA of Arrium.

As a result of accepting the appointment, SiN understands at least four receiverships were lopped from GT's advisory division in a day.

The axe was wielded by Westpac's restructuring chief Gwyn Morgan, who wanted good mate Peter Andersen's firm McGrathNicol installed to recast Arrium's slag heap of unsecured debt into an LME-grade recapitalisation. 

Morgan was apparently apoplectic when GT consented to act. SiN understands he expressed his displeasure by phone. Andersen - perhaps unwilling to have his own high dudgeon eclipsed - sent a "strongly worded" email.

Of course, such a set of events presumes that Westpac and the other three major banks - squirming on the hook for a collective $1 billion unsecured - believed McGrathNicol could be seen to act for all creditors with the appearance of independence.

More assertive ATO good for insolvency professionals as wind-ups jump in August

ATO-initiated wind-up activity
from March to August, 2015
Chart courtesy Insolvency Notices

ANY thought that the Australian Tax Office (ATO) might begin reducing the number of wind-up applications it's been lodging since it set a new monthly record of 582 wind-ups last May has been dispelled by the August numbers, which show the tax man sought to appoint liquidators to 488 companies last month.

This is almost 100 more than the number lodged in July and also exceeds the June figure of 449 wind-ups lodged. The long term average for ATO-initiated wind-ups of companies with unpaid tax debts is 92 per month.

In a statement the tax office confirmed it had adopted a more active policy on debt recovery, an essential change one would've thought given there's approximately $20 billion of recoverable debt on the ATO's books. More than 60 per cent of the arrears is owed by small to medium-sized enterprises (SMEs).

"The ATO is focused on making it as easy as possible for businesses, and other taxpayers, to understand and meet their tax obligations," the ATO said.

"As the Commissioner said during his address to the National Small Business Summit on 16 July, our intention is to be more active to prevent debts, to provide appropriate help and support when people are in debt, to take the right action to prevent debts from escalating, and to take legal action earlier when it is warranted."

Michael McCann, president of the Australian Restructuring Insolvency & Turnaround Association (ARITA) said there is no doubt the ATO has taken a more assertive stance. The question is whether it is a temporary measure to deal with a back log or is to be sustained.

"If there is in fact a catch-up that's one thing but if there is actually a sustained program by the ATO of being more assertive that would suggest that it is going to be acting earlier," McCann said.