With work scarce for many firms all avenues are being explored and major mid-tiers like Jirsch Sutherland are apparently not above scouring the lists of winding up applications for opportunities.
What’s interesting is the language employed in communications to the recipients of the dreaded wind-up notice. See an excerpt from the letter below.
A letter came across SiN’s desk this week from Jirsch subsidiary, Corporate Guardian addressed to a company director. It warned that the Deputy Commissioner of Taxation (DCoT) “has commenced proceedings seeking to appoint a court liquidator.
“Unless the ATO is paid the full amount due, or unless there is sufficient action taken in relation to the outstanding debt your company and its assets will be placed into liquidation.”
Such an approach is pretty straightforward. It then goes on to state that “Corporate Guardian is a division of Jirsch Sutherland and our principal aim is to stop your company going into liquidation”.
It also advises that unlike untrustworthy advisors, Corporate Guardian has access to more than 15 in-house registered liquidators and more than five in-house bankruptcy trustees, in case one assumes Corporate Guardian is unsuccessful in it’s principal aim.
ASIC’s advice on professional practice in this somewhat grey area is somewhat grey itself. The regulator does not censure the utilisation of the winding up lists to market business. Nor does ARITA, which after all has plenty of lawyers among it members for whom the wind up lists are required reading.
‘ASIC maintains its focus on practitioner independence,” a spokesman for the regulator said. “ASIC surveillance includes practitioner business structures and better understanding, and acting on, inappropriate referral relationships.
‘The law requires registered liquidators to fully disclose matters that, while not constituting a conflict, should be disclosed to the creditors so that creditors can consider exercising their statutory right to replace an appointed liquidator,” ASIC said.
Perhaps mindful of ASIC’s monitoring of this area, the letter – authored by Corporate Guardian director Stefan Arnautovic – also warns the addressee about approaches from “predatory businesses (guised as pre-insolvency advisers) that may have contacted you in regards to your wind-up application”. Perhaps it’s an attempt to differentiate Corporate Guardian from the opportunists swarming at the bottom of the pond.
“These businesses operate on the”fringes” in this regards, but the truth is they have no real qualifications to assist you through the process,” the letter continues.
All very well. But where will it end? Perhaps the dearth of work is pushing firms towards a space already picked over by the profession’s less-than-salubrious outsiders and a better outcome will result? The challenge is to avoid taking up the ways of the bottom feeders whilst sitting at the same table.