Robinson’s Reed blitz could attract FEG attention

PPB partner Mark Robinson is liquidator of Reed Constructions

Mark Robinson: big fees on the Reed liquidation but nothing for FEG yet

PPBA partner Mark Robinson has been running hard on the Reed Constructions case these last five and half years so SiN took a look at the most recent statement of accounts and minutes of meetings to see what he’s been getting for his efforts.

Backed with funds from Pat Maloney’s Litigation Capital Management, Robinson has been pursuing an insolvent trading claim against two Reed directors, Geoff Reed and Derry Hill, who in 2015 were banned from acting as directors by ASIC for three years and 12 months respectively.

The claim has targeted the pair’s professional indemnity cover and insurer Chubb is actively resisting so the only winners there so far are the lawyers.

LCM has also been funding Robinson’s efforts to realise debtors and claw back unfair preference payments made to related parties after the company was insolvent.

All this activity however has not yet changed Robinson’s view that there’ll be no dividend to creditors, a conclusion that may well account for an increasing focus on his fees, as demonstrated from questions from committee of inspection members (COI) at the most recent meetings.

That focus led last year to Robinson engaging an independent expert last year to evaluate and confirm the reasonableness of his fees, which according to the most recent accounts statement stand at about $1.93 million.

While the expert gave Robinson the tick of approval and the Reed COI has so far approved his applications for remuneration – with only limited opposition – the other issue Robinson will have to keep an eye on is whether the the liquidation is proceeding in such a way as to forestall any intervention from those avid litigators housed within the Department of Employment’s FEG Recovery Division.

The second report to creditors showed FEG claims of more than $3 million and total employee priority claims totalling more than $4.7 million.

What SiN hasn’t been able to identify in the most recent statement of accounts are any payments that would discharge the claims.

There are plenty of payments to PPB Advisory for remuneration and expenses, to LCM for costs on the D&O recovery action and unfair preference claims, and to law firms like Corrs Chambers Westgarth and K&L Gates  – but seemingly nothing yet to the Commonwealth.

Given the FEG Recovery teams’s well publicised view on the Commonwealth’s priority position in the payment waterfall, it might not be long before Robinson receives a politely worded ultimatum. If he hasn’t already.

Further reading:

Judge Skewers Inefficient Solicitors

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.

2 Comments on "Robinson’s Reed blitz could attract FEG attention"

  1. As a creditor of REED, before Mark Robinson’s appointment i had no idea of the insolvency jargon like “churning” “referral network” or my favorite “f$%king the dog” meant.

    Thank you Mark Robinson for the education.

  2. Rob given Reed’s history, why did you or the state government go near him. Having dealt with his previous insolvencies he should have been black listed for eternity.

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