Beleaguered deal maker Jon Adgemis‘ fall is so complete he can’t even bankrupt himself.
This morning the Federal Court ordered that the debtor’s petition Adgemis filed with the Official Receiver in a blaze of righteous publicity yesterday be rejected.
On Thursday Adgemis told the world he was prepared to take responsibility for the $1.8 billion failure of his Public Hospitality Group and was proving it by filing the debtor’s petition.
Unless Adgemis dwells in a world where sound legal and commercial advice is either non-existent or unheeded, he must have known that such a move was pointless when an unopposed creditor’s petition application being brought by the Deputy commissioner of Taxation (DCoT)was scheduled to be heard this morning.
We know Adgemis can afford advice. He had David Sulan SC in his corner on Monday when he was still ostensibly considering opposing the creditor’s petition. And he’s engaged Media & Capital Partners‘ Justin Kelly to spruik his positions.
Maybe the revelation of his filing of a debtor’s petition on Thursday, which he announced to the media in a prepared statement, was about nothing other than media manipulation because he knew anything he said would be run prominently?
iNO didn’t see any coverage questioning the sense of filing a debtor’s petition when a creditor’s petition was set to proceed less than 24 hours later and was certain to result in sequestration.
But the debtor’s petition created one last opportunity for Adgemis to attempt to present himself in a positive light in circumstances where his bankruptcy represents one of the largest in Australian history.
It also however added one more complication for the Inspector General in Bankruptcy which has taken a role not dissimilar to a supporting creditor in the creditor’s petition proceedings.
After Federal Court judge Elizabeth Raper made the orders this morning for sequestration as sought by DCoT, counsel for the IGB asked her honour to make an order directing that Adgemis’ debtors petition be rejected by the Official Receiver (OR).
Normally the OR has up to 14 days to deliberate on a debtor’s petition application so even if it was filed electronically to the Australian Financial Security Authority (AFSA) processing centre in Adelaide yesterday the chances Adgemis would have been issued with the Certificate of Acceptance by the time the parties assembled at 9:00am for today’s hearing were zero.
In an emailed response to iNO’s inquiries the ATO said it was “unable to comment due to our obligations under taxpayer confidentiality laws”, obligations that apparently extend to non-taxpayers too. Blessed is the Land of Oz, where everyone gets something for nothing.
AFSA also refused to comment citing privacy concerns.
How admirable of AFSA to zealously guard the privacy of a debtor who until yesterday was attempting to force creditors to swallow 0.15 cents on the dollar on $1.8 billion in debts.
That’s the same debtor who on Monday had senior counsel appearing for him to oppose the sequestration application despite previously telling his controlling trustees he had $3.79c in the bank.
No doubt controlling trustees Scott Pascoe and Ben Ho of WLP Restructuring would have appreciated AFSA keeping private the concerns it had about the adequacy of the investigations they undertook before recommending creditors accept Adgemis’ now defunct Personal Insolvency Agreement (PIA).
As it was Pascoe and Ho were publicly excoriated, threatened with disciplinary action in an AFSA media release and were so concerned by allegations raised in the unread affidavit of AFSA national manager Neville Matthew that they sought this morning to put on the court record a series of rebuttals.
After some deliberation their counsel Frank Tao withdrew the request and the making of the sequestration order and rejection of the debtor’s petition now clears the decks for Pitcher Partners Andrew Yeo, who has consented to act as Adgemis’ trustee in bankruptcy, to begin his investigations.
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The Debtors Petition if not accepted by the Official Receiver means nothing.
It is therefore a mattyer for the Court on the Credityor’s Petition before it as to whether it exercised the diuscretion it has to make a squestration order.
The stay provided for under Part X up to the first meeting of creditors had lapsed and the question of whetrher to proceed with Creditor’s Petition was within the discretion of the Court: Field v Commercial Banking Co of Sydney Ltd.
Clearly there was a need to investigate such a large shortfall in respect of examinable affairs. Various cases in respect of Part X during the period 1988 to 1993 provide a clear guidancve in respect of this. The Bond Case was an exception and proper investigation existed. It did however lead top the changes to voting rights for an assignee of debts to the amount paid for the assignment – the creditor however could still participate for dividend for the full amount admitted under s 82 BA