Brew Still my beating heart

There are few things that should get the pulse racing like consenting to become administrator of a corporation about to be wound up.

Knowing there’s a problematic debt, knowing that a hearing’s imminent and knowing not much else about an entity’s affairs must elevate the tension for even the most cocksure practitioner, especially in circumstances where, having been appointed administrator, they’ve sought to have the winding up hearing adjourned.

” …. it is not immediately apparent why it would be in the creditors’ interest to expend $50,000 (plus GST) on a voluntary administration which is as likely to demonstrate that there was never any real prospect of a restructuring of Brew Still as the contrary.” Justice Ashley Black.

Taking calculated risks however is the only way an insolvency practitioner has any hope of pulling a rabbit out of a hat, which may well have been the thinking that guided Shaw Gidley’s Paul Gidley when he consented to act as administrator of Hunter Valley distiller Brew Still Pty Ltd three days before an application to wind up the company was to be heard.

A day before the hearing Gidley applied to have it adjourned for a month so he could investigate Brew Still’s affairs and determine if there was an alternative to liquidation that provided a better return.

But with Brew Still’s petitioning creditor and the Deputy Commissioner of Taxation (DCoT) opposed his adjournment gambit was always a long shot and as is revealed in Re Brew Still Pty Ltd (admin apptd) [2023] NSWSC 256, it turned out to be one of those occasions where taking such a risk has left the punting practitioner worse off.

Delivering his judgment last week NSW Supreme Court judge Ashley Black last week refused the adjournment, ordered that the company be wound up and for good measure ordered Gidley to pay the costs of the opposing parties.

Rubbing salt in, his honour also declined to appoint Gidley as liquidator of Brew Still despite Gidley having already consented last year to act as liquidator of a related entity in separate proceedings underway in the Federal Court.

In those proceedings it is the DCoT attempting to have wound up The Phoenix Brewhouse Pty Ltd, a name which might give some hint as to why, as as is revealed in Justice Black’s judgment, the DCoT has refused the director’s offer to enter into a payment arrangement in respect of outstanding tax and superannuation payments.

In those proceedings the DCoT sought and obtained Gidley’s consent to act as liquidator of The Phoenix Brewhouse in the middle of 2022.

Last week however Justice Black ordered that the petitioning creditor’s preferred nominee Andrew Barnden from Rodgers Reidy be installed as liquidator of Brewhouse.

Inevitably perhaps, that led to a new consent being filed in the Federal Court proceedings on Tuesday this week, and it will now be Barnden and not Gidley appointed to The Phoenix Brewhouse if the winding up application succeeds.

The price of risk you say? No doubt. Our courageous punting practitioner bet the house on a VA with a $50,000 price tag yet was left with nothing to show but a costs order.