Administrator flaunts rival’s VU to creditors

VU

Worrells’ Matthew Jess.

VU

Hamilton Murphy principal Richard Rohrt.

The second meeting of creditors of failed Victorian builder Project Group Construction on Wednesday afternoon will go down as being notable for two reasons.

This was the first attempt by creditor activist Subbies United (SU) to remove incumbent administrators and replace them with its preferred appointee in Victoria, a tactic SU has employed successfully in Queensland on several occasions.

The attempt failed, with incumbents Ivan Glavas and Matthew Jess of Worrells comfortably repelling the attack once the challenge to the resolution that they be appointed liquidators was put to a poll.

The second reason this meeting was notable however is more colourful. When discussion turned to the proposed replacement, Melbourne liquidator Richard Rohrt of Hamilton Murphy, Jess produced to the meeting Rohrt’s voluntary undertaking with ASIC, which he entered into in 2017.

We asked Jess and Glavas what purpose was served by the production of the VU by Jess. Glavas responded.

“There was limited discussion at the meeting which related to the voluntary undertaking (VU), (which is a matter of public record), insofar as it was relevant to discussion around the respective practitioners’ resources and capacity to manage an external administration of this complexity and scale,” Glavas said.

“There was no discussion around any other aspects of the VU. The respective practitioners’ capacity was a very relevant and important consideration for creditors given the nature of this external administration, which has approximately 1,000 creditors in number, totalling approximately $45 million, a large number of disputed recoveries for complete and incomplete projects that require ongoing assessment, and substantial investigations into the solvency of the company, insolvent trading, transactions that may be voidable and potential offences,” Glavas said.

So there you have it. In this new world where creditors can more readily replace insolvency practitioners after the first meeting it seems incumbents might be more readily compelled to expose a rival’s failures or shortcomings in a bid to swing a vote in their favour.

No doubt lawyers will approve. It’s a little like discrediting a witness to undermine the opposition’s case.

Further reading:

Creditor Activist Challenges Worrells Pair In Victoria

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.

1 Comment on "Administrator flaunts rival’s VU to creditors"

  1. I hope Messrs Glavas & Jess gave due consideration to ARITA’s Code of Professional Practice regarding replacing an incumbent (COPP 11.7). While not the alternative being put forward, the spirit of the code is quite clear – Practitioners must not make negative statements about other Practitioners. In my view (regardless of the reasons behind the VU) bringing it up in a competition situation is somewhat harsh, uncalled for and may have breached the COPP.

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