Good old Government. Neither model litigant nor it seems, lender be, at least not in the mind of one general purpose liquidator (GPL) sitting on millions of yet to be distributed dollars while special purpose liquidators (SPLs) do the investigatory hard yards.
Such anxiety does this GPL harbour in regards to the New South Wales Government in its capacity as a funder of external administrators that he flagged his concerns this week during a hearing in the NSW Supreme Court.
That hearing involved an application brought by the Minister responsible for the Department of Fair Trading (The Department) for orders approving the entry by the Department and the SPLs of The Aboriginal Community Benefit Fund Pty Ltd (ACBF) into a funding deed.
The court heard that the funding would be non-recourse, meaning that NSW ratepayers won’t get the chance to recover their money but ACBF GPL David Stimpson of SV Partners had other concerns.
Stimpson’s counsel Craig Coulsen told the court that while the GPL didn’t oppose the application, he did want it known that if the funding was exhausted and the SPLs then decided to lob a claim for remuneration against the $10.8 million he’s preparing for distribution to ACBF contributories, then they should think again.
Stimpson’s concern stems from the fact that not even Fair Trading Minister Anoulack Chanthivong or SPLs Melissa Humann and Derrick Vickers of PwC know if the amount agreed in the funding deed will be sufficient to bankroll the SPL’s investigations.
Nor does the GPL know if Chanthivong will tip in more if the SPL’s require it.
This is critical for Stimpson as he is in the middle or preparing an application for judicial advice as to the best way of distributing the $10.8 million to ACBF group contributories.
If the the SPLs are to be entitled to claim for remuneration and expenses from that sum it could complicate Stimpson’s judicial advice application.
How does he tell the court how much will be free to distribute to contributories if the SPL’s can assert a priority lien for an amount unknown?
Then there’s the delicate issue of having two partners from PwC – a big four professional services firm currently mired in controversy – being entitled quaff from the trough before contributories get to drink. Political optics atrocious.
On hearing the GPLs concerns on Monday NSW Supreme Court judge Ashley Black responded that if Stimpson wants to try and insulate the contributories’ funds from any future claim by the SPLs he’ll need to make an application to that effect.
That in turn will depend on whether Humann and Vickers can complete their appointment with the funds being made available by the Department.
Monday’s appearance by Stimpson was a preliminary move to ensure that if he has to make an application then the SPLs will have already been put on notice.
Further reading:
I note the comment about 2 partners conducting the SPL activities – quite obviously they would be aware in respect of remuneration and also third party costs that they had to act: firstly, in respect of remuneration in a manner which was fair reasonable and proportionate; and secondly, in respect of third party expenses that they review them so that they also are fair reasonable and proportionate – even in on solicitor and own client basis – absent leave of the court