FTI yet to consent to Parbery as SPL

FTI Consulting's Quentin Olde 

AN application to appoint PPB Advisory's Steve Parbery special purpose liquidator (SPL) of Queensland Nickel (QN) has been lodged in the Federal Court but the stricken nickel firm's general purpose liquidators (GPLs) are yet to declare whether they will consent to or contest the move.

Quentin Olde, one of four FTI Consulting partners formerly appointed GPLs to QN on April 27 told SiN yesterday that the company's creditors are also undecided.

"We had a meeting with the committee yesterday (Tuesday) and we're trying to understand their views and concerns and are continuing to work with the applicants to better understand the basis for the application and the extent of the role of the SPL," Olde said.

Creditors are understood to have expressed doubts about the need for an SPL. Nor is it rocket science to conclude that FTI might be underwhelmed with the prospect of PPB nicking its gig. The application's originating process seeks orders which include preventing the GPLs from doing anything specified as a designated, SPL task without first obtaining written consent.

That includes pursuing claims, conducting public examinations, commencing legal proceedings and conducting investigations into any of the matters outlined in the application's supporting affidavit, authored by King & Wood Mallesons' insolvency gun, David Cowling.

Further, FTI's gang of four - Olde, John Park, Stefan Dopking and Kelly-Anne Trenfield - reject any suggestion that they have a conflict of interest with their appointor, which is the usual justification for installing an SPL.

Yet unanswered is the question of why the SPL applicants - The Department of Employment (DoE) and the Commissioner of Taxation (CoT) - won't fund the GPLs.

Midland HWY- why ASIC objected to Hall Chadwick appointment

Hall Chadwick partner
David Ross

THE corporate regulator challenged the appointment of two Hall Chadwick partners as voluntary administrators (VAs) to a Victorian land banking scheme because of the closeness of their referral relationship with the lawyers behind the scheme.

On Tuesday, August 4, Richard Albarran and David Ross resigned as VAs of Midland HWY Pty Ltd, neutralising an application brought by the Australian Securities and Investments Commission (ASIC) in the Federal Court, which sought a ruling that their appointment was invalid.

Ross told Fairfax Media that he was disappointed that ASIC had not advised either he or Albarran that it was investigating Midland HWY "prior to them lodging an application to have us removed".

ASIC made the application after the first meeting of Midland's creditors on July 14. At the meeting a resolution to replace the company's initial VAs, Nick Martin and Craig Crosbie of PPB Advisory, with Albarran and Ross was approved. An ASIC officer attended the meeting.

Tim Mulally, ASIC's head of enforcement - financial services said the regulator became concerned after Ben Skinner, principal of Melbourne law firm Evans Ellis Lawyers, told the meeting that he referred 50 per cent of his insolvency work to Hall Chadwick.

PPB Fees - Oswal's expert unwilling to condemn

Pankaj and Radhika Oswal

READ in their entirety, expert witness reports can be turgid affairs. Eye-glazing repetition. Incessant referencing of Acts and Codes. Footnotes even. But when a report's author is cross-examined in open court and the minutiae of their conclusions surveyed, a more engaging narrative may emerge.

Barry Raymond Cooke is one such expert. Cooke was engaged by Pankaj Oswal to produce expert witness reports about PPB Advisory's handling of the receivership of Oswal's Burrup Fertilisers Group (BFG).

In the bitter litigation that's played out between BFG founder Oswal, his lender ANZ Bank and PPB, the Dubai-based fertiliser tycoon has lined up PPB partners Ian Carson, Simon Theobald and David McEvoy for special retribution, motivated by what Oswal claims was flagrant overcharging during the 13 months they were receivers.

Oswal is out for blood. In his statement of relief filed on 1 April 2015, he sought orders which would effectively see Carson, McEvoy and Theobald disqualified from acting as official liquidators or liquidators for seven years.

The alleged excesses are well catalogued. Wives, children and partners accompanying PPB staff as they travelled each week from Melbourne to Perth. Alleged gross inflation of costs - Oswal and his wife Radhika claim the receivers charged almost $20,000 to fill out a form - reclassifying work so that it would be paid for by Burrup Fertilisers Pty Ltd (BFPL), rather than by ANZ or the receivers themselves.

The appointment lasted just 13 months and in that time PPB and legal advisers Herbert Smith Freehills and Minter Ellison reportedly billed almost $34 million. One of the receivers, Melbourne-based partner Carson, has even admitted that things could've been done better, though PPB insists it has at all times acted within the law and in accordance with the applicable professional standards.

Octaviar liquidators bill $22 mill as Fortress claims settled

ANY insolvency that burns through five liquidators deserves special mention. When tens of millions of dollars - which might have been deployed beefing up creditor dividends - is instead spent pursuing a well-resourced, recalcitrant and foreign domecilled defendant, then the topic which so reliably provokes palpitations must be revisited.

Fees and expenses should be kept in the limelight. Like mushrooms they flourish in the dark. PPB Advisory's charges as receiver of Burrup Fertilisers - which became the focus of a judicial inquiry that wrapped up only last week - have again raised the question of whether creditors should focus more attention on liquidators' decisions to fund complex litigation from the coffers of companies in their control.

While there is no suggestion that the criticisms that led to PPB's expenses being scrutinised by Justice Antony Siopsis of the Federal Court apply in any way to the liquidators of failed property group MSF/Octaviar, there's also no doubt that given the modest settlements that recently concluded hostilities between Octaviar and US hedge fund Fortress Credit Corporation, scrutiny is justified.

Those settlements saw all proceedings mounted by Octaviar's liquidators against all Fortress subsidiaries dismissed by order of Queensland Supreme Court Justice Peter Applegarth on May 25, 2015. 

By good fortune, a large spreadsheet and a bundle of statements of accounts for Octaviar Administration (OA) recently unfolded on SiN's desk. Whilst some settlement terms have been kept confidential, the documents still make for illuminating reading.

To March 2015, Bentleys Bill Fletcher and Kate Barnett have racked up $22.75 million in remuneration since being appointed general purpose liquidators of OA and Octaviar Limited (OL). 

As at December 2012, they'd charged $15.7 million, meaning they've charged an additional $7 million in less than three years. The documents also show expenses incurred and disbursements paid in great detail.

In the most recent statement of accounts for example, expenses attributed to the liquidation included $7,981.79c for airfares, $5,542.87c for travel and $14,432.43 for "miscellaneous", spent during the period from September 2014 to March 2015.

In the same period $672,811.35c was paid to RSM Bird Cameron, under the terms of the "Funding Agreement Line of Credit". Law firm Henry Davis York (HDY) meanwhile raked in approximately $4.5 million.

When contacted, Barnett would say only that the liquidators' commercial arrangements are confidential and that Octaviar's committee of inspection "is responsible for approval of our fees".

INSOL infiltrated by Australian achievers

PPB Advisory's Mark Robinson
is the new INSOL president.
Photo courtesy PPB Advisory

 AS the annual regional INSOL conference wraps up in San Francisco, Australians have emerged as prominent players in the organisation's leadership with PPB Advisory's Mark Robinson taking on the presidency after several years as vice president. 

A statement issued by PPB Advisory said Robinson's role would include "promoting a stronger, global turnaround culture" and expanding INSOL's reach into jurisdictions like South-East Asia.

"In the near term, Mark will be embarking on an active program to listen to the needs of market participants both here and abroad to shape his program to deliver the above priorities and broadening its membership base to include other turnaround market participants such as debt/hedge/private equity funds and financiers," the statement said.

Other Aussies ascending the INSOL ranks include the Queensland University of Technology's Ros Mason, who as Professor of Insolvency & Restructuring Law and a member of the Faculty of Law’s Commercial and Property Law Research Centre now heads up INSOL's academic group.

Henry Davis York chairman and insolvency specialist Scott Atkins, also takes a seat on the main INSOL board.

The appointments are an endorsement for the Australian Reconstruction, Insolvency & Turnaround Association (ARITA), which counts Robinson as a past president and Atkins as a current director.


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Scott and Pascoe poised to get Godfrey

PPB Advisory's Andrew Scott
Photo: SiN Images

MURRAY Godfrey, registered liquidator and official liquidator of the NSW Supreme Court and the Federal Court, is facing a creditor’s petition hearing over a $160,000 judgement debt.

The petition application was filed in the Federal Court on Wednesday, October 23. 

Also filed was a consent authority, signed a day earlier by Andrew Scott and Scott Pascoe of PPB Advisory. 

The filings come less than a week after a court dismissed Godfrey's application to have a bankruptcy notice set aside. 

Scott and Pascoe have agreed to act as trustees of Godfrey’s estate in the event the court orders sequestration and Godfrey is bankrupted.

If appointed, Godfrey will be the first Sydney-based insolvency practitioner the pair have on their books. They also manages the affairs of a bankrupt practitioner from Melbourne.

Burke passes Coshott baton to Prentice

BPS Recovery partner
Max Prentice. 

IT was an unusual little meeting at the offices of the Official Trustee in Bankruptcy last month.

There were two private trustees present. A third and fourth attended by proxy. And each was vying to take on the trusteeship of the bankrupt estate of Robert Gilbert Coshott.

Coshott is a former solicitor who was struck off the roll in 1997. He was bankrupted in 2008 on a creditors petition filed by Shipton Lodge Cobbity following a dispute over agistment fees.

Before the meeting on March 21 this year the Official Trustee administered the estate, having taken over from former trustee, John Burke on February 25, 2013.

Burke's resignation was approved after he told the Federal Court personal reasons had compounded the difficulty of managing “a very complex bankruptcy administration”.

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.

Keddie creditors shedding trustees

Casa Barakat, Roseville Chase
Photo: SiN Images

CREDITORS of the former partners of legal firm Keddies want to slash the number of bankruptcy trustees in a bid to reduce fees - and who can blame a former Keddies client for being a little testy on that topic?

The first step towards paring the four trustees back to one will be taken on December 19 when former partner Tony Barakat submits a proposal for a composition.

The composition - under section 73 of the Bankruptcy Act - comprises an offer by Barakat of $2 million.

Lehman creditors encouraged to share the pain

Lehman Borthers Australia
liquidator Marcus Ayres.
Photo courtesy PPB Advisory

YOU know you’re handling a complex liquidation when the best option for satisfying creditors’ claims is one that delivers equality of unhappiness for all.

Lehman Brothers Australia (LBA) is such a liquidation. Since their appointment in 2009 PPB Advisory’s Marcus Ayres and Steve Parbery have dealt with complex financial instruments backed by tainted mortgage pools; multi-jurisdictional legal wrangles; hardball insurance syndicates and class actions mounted by plaintiffs scarred when the aforementioned derivatives exploded.

On Wednesday the liquidators faced LBA creditors assembled at the Bligh Street offices of Clayton Utz to discuss their latest report.

Radhika wins minor round against PPB

A Fairline Squadron, similar to the one PPB is
worried will rot at its mooring. 

YOU'D think PPB Advisory's boys on the Burrup Fertilisers Pty Ltd (BFPL) receivership might be a little miffed.

On December 22, just a week after their big win in the Supreme Court of Victoria, Federal Court judge Justice Neil Walter McKerracher dismissed their application seeking to be appointed receivers to a Fairline Squadron 74, purportedly owned by the wife of absent fertiliser mogul Pankaj Oswal. And that decision is going to cost. (Read the Judgement)

NAB on the hook for $58 million

Chris Hill and Alan Hayes from PPB Advisory are nominally in charge of HP Industries (Hollywood Plastics) after the steel and plastic packaging group’s directors appointed the pair voluntary administrators last Tuesday.