Perhaps the US interests condemning Cameron Gray’s conduct as liquidator of Nasdaq-listed Mawson Infrastructure Group Inc (MIGI) think the distance between jurisdictions means their allegations need to be extreme to carry any weight after travelling so far.
“Mawson alleges that the debts have been created in some breach of fiduciary duty and that Mr Gray was effectively complicit in this behaviour, acting in concert with the cabal to effect this damage.” Barrister Tony Di Francesco for Cameron Gray.
Certainly the claims of connivance in a dastardly scheme blipped bright on iNO’s fiascometer when parties to this enthralling, cross-border brouhaha came before Federal Court judge Brigitte Markovic yesterday.
For clarity, MIGI is a foreign company registered in Australia as a Part 5.7 Body for the purposes of the Corporations Act 2001 and its centre of main interests (COMI) is in the USA.
As plaintiff Gray is ostensibly the moving party but it soon became clear that like everyone else in this collision between US Bankruptcy Law and our Corporations Act he’s hedging his bets.
Justice Markovic heard that Gray, who is under pressure from the US interests controlling MIGI to terminate the liquidation, would be prepared to go along with what the court thought appropriate.
Obviously her honour wasn’t gong to let herself be played and said so. At some point very soon Gray will have to tell the court whether he believes the winding up should end or continue, and why.
The reason Gray has to form such a view stems from orders made in the Bankruptcy Court of Delaware, USA in late 2024, which came about in the wake of the filing by creditor W Capital Advisors (WCA) of an involuntary Chapter 11 petition against MIGI under the US Bankruptcy Code.
Justice Markovic heard that under US law, the filing of an involuntary petition activates an automatic stay on any proceedings against the debtor and its subsidiaries anywhere in the world.
The Federal Court here granted leave for Gray to be appointed liquidator of MIGI in February 2025 – on an application for winding up sought by WCA.
But as 2025 progressed Mawson managed to have the Chaper 11 proceedings dismissed. That meant the automatic stay was lifted. But according to the US Bankruptcy judge presiding over the case it didn’t cure Gray’s breach or reverse the invalidity of his appointment.
And as Gray’s counsel Tony Di Francesco of Frederick Jordan Chambers explained yesterday, once out of Chapter 11 MIGI commenced a damages proceeding which identifies WCA and Gray as defendants. And in respect of the latter it asserts much more than an accidental breach.
“Mawson alleges that the original applicants for the winding up were a cabal acting with Mr Manning and other persons by bringing the involuntary petition in bad faith,” Di Francesco said.
“Mawson alleges that the debts have been created in some breach of fiduciary duty and that Mr Gray was effectively complicit in this behaviour, acting in concert with the cabal to effect this damage.”
A glance at Gray’s DIRRI illustrates why MIGI might see things this way.
The job was referred to him by North Sydney accountant James Manning, a former director, founder and CEO of MIGI who in 2023 referred an appointment as receiver managers to Gray and his then DW Advisory colleague Anthony Elkerton to MIGI subsidiary Mawson Infrastructure Group Pty Ltd (MIGPL).
iNO makes no suggestion of wrongdoing in respect of Gray or Manning, only that interests associated with MIGI have made the allegations, which remain untested.
Manning has lodged a proof of debt in the liquidation of MIGI for $US3.5 million, a sum he says arises from MIGI’s breach of the terms of a departure deed. He claims he was entitled to be granted reserved stock units in the company and didn’t receive them.
Naturally enough Manning opposes any termination of the winding up of MIGI, as does WCA which decided to put itself in administration in October last year, around the time MIGI extracted itself from Chapter 11 in the US.
But if, as the court heard yesterday, MIGI is out of Chapter 11, has completed a recapitalisation and is solvent, how can continuance of the winding up down under be justified?
As well as seeking to terminate the MIGI winding up in Australia MIGI’s US controllers have also applied for leave in the NSW Supreme Court to commence a proceeding against WCA.
If granted leave MIGI will seek to have the resolution for a Deed of Company arrangement (DoCA) proposed by WCA sole director Darron Wolter and passed on January 30, 2026 set aside.
Deed administrator Brad Tonks of PKF – who declined to recommend MIGI’s competing DoCA proposal at the time – has given an undertaking to refrain from effectuating the DoCA before the leave application is decided.
Gray meanwhile will soon have to consider evidence – if any is put forward by the Americans – to try and justify their hyperventilating allegations of cabal complicity, along with any offers to drop him as a defendant in the damages proceeding if he chooses the option MIGI prefers.
Sounds like an unholy cross boarder shambles. The Australian IPs are in an unenviable position.