McCann shrugs off courtroom slur

Counsel for Mawson Restructures and Workouts alleged liquidator manipulated receiver payments.
Walton Constructions liquidator Michael McCann laughs off Mawson allegation.

Walton Constructions liquidator Michael McCann laughs off Mawson allegation.

Grant Thornton’s Queensland chief Mike McCann is no doubt used to the rough and tumble of insolvency and didn’t sound bothered when SiN called yesterday to ask about an allegation raised against him by counsel for Mawson Restructures and workouts Pty Ltd (MWR).

McCann told SiN he wished “I was that powerful” when asked if he and his co-appointees had influenced the payments from the Walton receiver so as to advance their claims against MWR.

McCann is liquidator of Walton Constructions (WC) and Walton Constructions Qld (WCQ). Readers may recall that the names Walton and Mawson have become bywords for alleged phoenix activity as a consequence of the restructuring of the Walton Group by MWR in 2013.

In the Federal Court recently McCann applied for an extension of the time available to make any application against Mawson and QHT Investments.

The extension application was opposed by MWR and QHT. QHT is an entity related to the Mawson Group. In September 2013 as part of the Walton restructuring, a debt WC owed to WCQ was assigned to QHT. The face value of the debt was $18,876,385. The consideration was $30,000.

During the hearing the court heard extensive submissions by MWR’s counsel suggesting almost $1 million had incorrectly been paid to WCQ instead of WC by the former receiver of the Walton Group installed by NAB.

In his judgment of September 23, the Federal Court’s Justice Jim Edelman retold how counsel for MWR had insinuated that McCann and his fellow liquidators somehow influenced the receiver.

“On 13 September 2016, $987,734.13 was paid to the liquidators of WCQ as surplus funds following the retirement of the receiver appointed by NAB. That money is now cleared. A further release of $411,000 is anticipated and any further distribution from the National Australia Bank is expected to be limited to approximately $50,000,” Justice Edelman said.

“The importance of this issue was that one reason why WC seeks an extension of time in relation to Mawson Restructures is to obtain funding in order to bring the action. A very serious allegation was made orally that the current liquidators might have tailored the payment arrangements in order to achieve this result.

“This necessitated a further affidavit, obtained over lunch, from the solicitors for the current liquidators explaining the operation of the receivership. Counsel for Mawson Restructures did not ultimately press the issue. He quite properly accepted that in an application for an extension of time, with some urgency, there might not be much utility in a collateral inquiry, based on allegations made orally at the hearing itself, into whether receivers had paid funds to the wrong party. That might be said to be an understatement.”

McCann said the next step was to secure funding to pursue claims against Mawson. He confirmed he’d had talks with the Department of Employment’s Fair Entitlements Guarantee Scheme (FEG) and had already received funds from ASIC and the Queensland Building Construction Commission.

About the Author

Peter Gosnell

Sydney Insolvency News illuminates the practice of insolvency in Australia’s largest city, highlighting the triumphs and failures of Sydney’s registered practitioners and the accounting and legal professionals who work with them. SiN is produced by Peter Gosnell, former business editor and senior business reporter at The Daily Telegraph newspaper. During a decade-long career, your correspondent reported on such notable corporate collapses as HIH, One.Tel, Westpoint and Fincorp as well as some of the nation’s highest profile bankruptcies and the investigations and prosecutions arising from Australia’s most notorious instances of white collar crime.

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