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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ARITA cuts Wily in the wake of AFSA deal

Andrew Wily.
Courtesy www.andrewwily.com.au

THE association of insolvency professionals has revoked Andrew Wily's membership after the armstrongWily principal cut a deal with the bankruptcy regulator that allowed him to resign as a trustee in bankruptcy, rather than having his registration terminated involuntarily.

"In accordance with clause 7.1(b)(ii) of the Constitution, Mr Wily's membership was automatically terminated effective from 24 March 2015," the Australian Restructuring, Insolvency & Turnaround Association (ARITA) said today.

"Mr Wily recently relinquished his status with the Australian Financial Security Authority as a Registered Trustee. Through its statutory role in supporting AFSA under section 155H of the Bankruptcy Act, ARITA became aware of actions being undertaken by AFSA that invoked consideration of Mr Wily's ongoing membership under clause 7.1(b)(ii) of the ARITA Constitution," ARITA said.

The relevant section of ARITA's constitution states: "If, as a consequence of Disciplinary Proceedings or legal proceedings taken against a Member, a Sanction is imposed on the Member which:

"has the effect of terminating the Member's entitlement to remain a member of a Foundation Organisation or to continue to practise as an Insolvency Practitioner or legal practitioner, then the Member's Membership is automatically terminated;".

Did Wily jump before AFSA pushed?

Andrew Wily hooked up and laughing.
Photo courtesy: Andrewwily.com.au

IN early February, Sydney-based insolvency practitioner Andrew Wily was required to front at a meeting with the Australian Financial Security Authority (AFSA).

The bankruptcy regulator had formed a three member committee under section 155(H) of the Bankruptcy Act to consider terminating Wily's registration as a trustee in bankruptcy.

Section 155(H) (1) allows for the involuntary termination of a bankruptcy trustee's registration. It empowers the Inspector-General to demand from the trustee a written explanation justifying why they should continue to be registered.

If the trustee's response either does not satisfy the Inspector-General, or is not forthcoming within a reasonable time frame, then under the Act, the Inspector-General must convene a committee "to consider whether the trustee should continue to be registered."

The reasons why the regulator might consider involuntary termination are numerous. If a trustee is incapacitated by illness or convicted of a crime then section 155(H) can be applied. If the regulator believes the trustee has failed to carry out their duties properly or exercise their powers in a suitable fashion then a demand under 155(H) can be issued. There is no suggestion that any of the above are the reason why AFSA was contemplating rescinding Wily's registration. On that point both Wily and AFSA are mute.

Whatever the reason, it was sufficiently serious for AFSA to form the committee comprising the Inspector-General, another public servant and a registered trustee with no conflict of interest. Under the Act the registered trustee must be chosen by the Australian Recovery Insolvency and Turnaround Association (ARITA).

SiN understands a trustee travelled from interstate to join the committee. It should not be inferred though that there isn't a trustee in NSW who doesn't have a conflict when it comes to the head of armstrongWily, who, as it turned out, arrived at the meeting accompanied by his lieutenant Paul Fury, another armstrongWily staffer and an alternate proposal.

EXCLUSIVE: Prentice may grill billionaire Mother over bankrupt son's mortgage

Max Prentice of BPS Recovery

SYDNEY-based bankruptcy trustee Max Prentice may seek to formally question one of Australia's richest women after being appointed trustee of the bankrupt estate of West Australian businessman Grant Bennett.

45 year old Bennett is the son of Angela Bennett, whose late father Peter Wright shared in the riches generated after he and his prospecting partner the late Lang Hancock identified and staked claim to much of the Pilbarra region's vast iron ore reserves. Ms Bennett's net worth is estimated at around $1 billion net, thanks to a half share in Wright Prospecting and a swag of property interests.

Grant Bennett declared himself bankrupt earlier this year via a debtor's petition filed in Adelaide after defaulting on loans extended by JWH Nominees, the private financing vehicle of the Sydney-based Hunt family, which sold out of Primo Small Goods in 2011.

The money was initially lent to Strategic Investment & Trading Pty Ltd, which spent $8.7 million buying farmland around Boddington south of Perth. The plan was to subdivide and sell to wealthy Asian investors.

Under the terms of an agreement with Strategic, Grant Bennett was then going to buy the farm from Strategic for $17.6 million, thereby enabling Strategic to repay JWH.

When Bennett's company, GKB Property Pty Ltd failed to obtain alternative financing to complete the transaction, JWH put receivers in charge of Strategic.

According to a report by journalist Neale Prior published in The West Australian last week, Grant Bennett provided personal guarantees on the loans to Strategic. Default interest rates of 39 percent have applied since July, 2013.

Prior's report also says JWH had hoped Angela Bennett would bail out her son. She refused and Grant Bennett then made an offer which JWH deemed unacceptable. He filed a debtor's petition with the Australian Financial Security Authority (AFSA) in Adelaide on January 12, 2015.

By declaring himself bankrupt, Grant Bennett's estate became the responsibility of the Official Receiver. However JWH Nominees then intervened, applying under Section 181 of the Bankruptcy Act to replace the Official Receiver with Prentice of BPS Recovery. Angela Bennett, who is also a creditor of her son, did not respond and Prentice was appointed trustee of Grant Bennett's estate on March 6, 2015.

The appointment of Prentice is likely to refocus scrutiny on potentially recoverable assets, principle of which is a mansion Grant Bennett occupies in Perth's exclusive Mosman Park.

Purchased in 2010, the property is mortgaged to Angela Bennett and without a settlement, Ms Bennett may well find herself summoned to answer detailed questions about the mortgage and its terms.

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Crouch poised to cherry pick portfolio

Andrew Wily showing there's more to life 

than being a bankruptcy trustee.

Photo courtesy Andrewwily.com.au

SITTING on a beach at Byron Bay, Crouch Amirbeaggi co-principal Nicholas Crouch is a long way from the worries occupying fellow insolvency practitioner Andrew Wily.

The head of armstrongWily is currently organising his voluntary retirement from life as a registered bankruptcy trustee, part of which entails working out what to do with more than 400 bankruptcy appointments prior to the deadline imposed by AFSA.

That date is described by the bankruptcy regulator in the following, somewhat flexible terms: "It presently is anticipated that the Inspector-General will accept Mr Wily’s request to cease to be registered shortly after 30 May 2015."

SiN understands about 150 of Wily's bankruptcy files are active. When contacted Crouch confirmed he'd spoken with Wily about taking over some of the jobs. However he said he "wanted to see what was in them" first and mentioned that Wily was speaking to other trustees. It's possible the pick of the portfolio might go to tender.

The most obvious way to effect the transfer of bankrupt estates to other trustees is via Section 181 of the Bankruptcy Act which states: "The creditors may, by resolution, at a meeting of which not less than 7 days' notice has been given, remove a registered trustee appointed by them, or a registered trustee who is, by virtue of subsection 156A(3), the trustee of the estate of the bankrupt concerned, and may at the same or a subsequent meeting appoint another registered trustee to be trustee in his or her place."

Another avenue might be by applying to the court for an order apportioning the jobs to specific trustees named in the application. That however would deny creditors their right to object to the nomination of a particular trustee without having to incur the cost of opposing the nomination through the courts.

None of that of course is occupying the mind of the sports-loving Crouch who - presently ensconced on the NSW far North Coast - is about as far away from Wily's woes as a Sydney-based insolvency practitioner can get, apart of course from those who've already jetted off for San Francisco for the INSOL Conference, which kicks off next Sunday.

See also EXCLUSIVE: Wily relinquishes bankruptcy ticket

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EXCLUSIVE: Dolores Lavin declares bankruptcy

The Wylde Street Potts Point complex housing
Dolores Lavin's cherished home.

FOLLOWING her failure to win a reprieve in the High Court, artistic agent Dolores Lavin has declared bankruptcy in a move unlikely to satisfy ex-bestie Paola Toppi, who has a court judgment and bankruptcy notice ordering that Lavin pay Toppi and her husband Neil Cunningham more than $870,000.

Documents obtained by SiN show Lavin was registered as a bankrupt on the national personal insolvency index on February 19, 2015, a week after the High Court shut the last door on her fight to avoid recovery proceedings Toppi of Machiavelli Ristorante fame commenced in 2011.

Worrells' Aaron Lucan has consented to act as trustee of Lavin's bankrupt estate but given the dealings that have taken place regarding the proprietorship of Lavin's ritzy Wylde Street apartment in Potts Point, it promises to be anything but boring.

On September 13, 2013 a Deed of Change of Trustee was registered. Listed on the deed of change are Lavin, accountant Constantine Savell, Billy Buckle Pty Ltd and The Wylde Family Trust. Effectively the deed empowers Savell as appointor of the trust to appoint Billy Buckle Pty Ltd, replacing Lavin as trustee of the The Wylde Family Trust.

EXCLUSIVE: Wily relinquishes bankruptcy ticket

Andrew Wily, happier without the stress
of working on profitless bankruptcies at the behest
of AFSA. Photo: Andrew Wily  

ARMSTRONG Wily principal Andrew Wily has confirmed he has surrendered his registration as a trustee in bankruptcy, blaming onerous regulation and meagre profits.

"It's been brewing for a while," Wily told SiN when asked when he decided to give up his ticket. "It's a process that will go on for months of winding down, that's all," he said.

The Australian Financial Security Authority (AFSA), which regulates personal insolvency, refused to comment when contacted. Wily's name and contact details were still present on the AFSA website's lists of registered bankruptcy trustees at time of writing, despite Wily confirming he could no longer accept appointments.

"The story with bankruptcy these days is that it's very regulated and the regulator wants everybody to do a lot of work in matters that have no money in them," Wily told SiN. "They're saying 'we don't really care if there's any money in the job or not. You have to do a whole heap of work'.

"So that means you have to employ a lot of staff, and do a whole lot of work and there's no assets in them. It's a commercial decision as to how much work you do. I think I had over 300 files at one stage," he said.

Wily denied that AFSA had pressured him to relinquish his ticket in the wake of an application late last year in the Federal Court by the liquidators of Timbercorp Finance.

In November 2014 Mark Korda and Leanne Chesser of Korda Mentha sought an inquiry into Wily's conduct and his removal as trustee of the bankrupt estate of  Melbourne-based financial advisor Peter Raymond Holt, who was banned from providing financial services for three years in September 2012 in relation to Timbercorp investments made by his clients. 

Wily said the application caught him by surprise because he had earlier approached the liquidators, seeking funding to carry out further investigations. He said he also provided lawyers for the liquidators with full access to his case files.

"No, there were no issues on that one but there's no doubt that AFSA's looking at all trustees at the moment," he said. "They're saying, 'guys you've got to keep the high levels of work up and if you don't you've got to start thinking about exiting the industry'," Wily said.

When asked if AFSA had tapped him on the shoulder in relation to an appointment other than Timbercorp Wily was equivocal, saying only that he had an enormous amount of work in progress built up over the years. That work will pass to the Official Receiver who will then allocate it to eligible private trustees.

Wily meantime will focus on corporate insolvency work, when he's not fishing and ridding properties of feral pests.

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