Beechworth: Australia’s longest running VA?

Getting to that second meeting of the creditors of Beechworth Land Estates is taking a long long time.
Beechworth Homes Limited VA Neil Cussen

Deloitte’s Neil Cussen: has he set the record for Australia’s longest running VA?

SiN’s been examining material relating to Beechworth Land Estates (BLE) which is in the hands of Neil Cussen and Ezio Senatore and the question has to be asked: is this Australia’s oldest VA?

The Deloitte duo were appointed voluntary administrators of BLE in July 2014 and have extended the convening period for calling a second meeting of creditors about half a dozen times.

Along the way they’ve been contractually appointed agents of Beechworth and allied entity Griffith Estates (In Liq) and court-appointed receivers of certain assets and rights belonging to both companies.

They’ve also successfully defended removal proceedings which attempted to argue that they had been invalidly appointed and managed to avoid being dragged into “shareholder proceedings”

What they haven’t done is place the company into liquidation or put a deed of company arrangement (DoCA) to creditors and that is quite a feat given it’s now more than three years since their appointment.

You might wonder why the courts would continue to agree to extend the convening period but this is no ordinary administration – few books and records have been yielded up to the VAs despite their efforts and even though BLE was purportedly mortgagee-in-possession of 28 vacant lots at Elm Tree Rise in Victoria, the company was not in possession of the relevant title deeds as at the date of the VA’s appointment.

There have also been numerous DoCa proposals that have come to naught and a failed sale to creditor and western Sydney lawyer Gus Dib.

Perhaps the circumstances of some of the parties involved has also given the courts cause for concern?

One player who should be providing no further source of anxiety is tax accountant Salvatore Arcuri, gaoled these past six months and whose April 2017 conviction for lodging two tax returns to his own name was ironically admonished at the time by now disgraced and now ex-deputy tax office commissioner Michael Cranston for trying to cheat the tax system.

But still in the mix Greg Huxley, a former bankrupt who’s well known in the money lending game and is an associate of the ex-deputy mayor of the ex-Auburn council Salim Mehajer.

Huxley’s Vangory Holdings claims to be a secured creditor of BLE and it was Vangory that appointed Cussen and Senatore as VAs. Problem is, BAD Nominees NSW Pty Ltd also claims to be a secured creditor and according to an affidavit of Cussen obtained by SiN it’s been BAD Nominees that “has historically supported the administrators’ appointment and conduct”. Vangory on the other hand has opposed the VA’s applications for approval of their remuneration.

The VAs have also had to deal with lawyer and former bankrupt Leonardus Gerardus Smits, more commonly known as Leo Smits. In May 2016 Smits wrote to the VAs advising that BAD had taken possession of the Beechworth assets.

Less than a month later theVAs received another letter from solicitor Geoff Cohen. He said he was acting for BAD and its director Brian Dean and that his clients disputed Smits’ purported authority to act on behalf of BAD. From the Va’s perspective the problem is knowing who is really controlling BAD. It seems Cussen suspects Dean might be a somewhat biddable director.

What actually isn’t a problem is envisaging how a succession of judges might agree that BLE should continue to remain in administration while the legitimacy or otherwise of the varying competing interests remains unresolved. But three years and three months? That’s so long in the tooth it’s a tusk.

About the Author

Peter Gosnell
Insolvency News Online illuminates the practice of insolvency Australia-wide, highlighting the triumphs and travails of the nation’s registered practitioners and the accounting and legal professionals who work with them. INO 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 "Beechworth: Australia’s longest running VA?"

  1. One must wonder how the overriding purpose in s 435A is being achieved. It seems also that as a matter of public policy there is need for finalisation and investigation

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