Colleague’s solvency gig didn’t discourage VAs

Two insolvency firm partners recently resigned their appointments as voluntary administrators (VAs) within days of consenting, but the decision wasn’t driven by the engagement of a colleague to produce a solvency report for a separate entity controlled by the VAs’ appointor. At least not immediately.

Indeed their DIRRI alluded to their colleague’s engagement and sought to assuage any conflict concerns by disclosing that as their appointor hadn’t provided their colleague with the materials necessary to produce the solvency report it probably wouldn’t be delivered.

Nevertheless the pair were gone in 72 hours, replaced by liquidators appointed by order of the Supreme Court of Queensland at the behest of a petitioning creditor who had the backing of the Australian Taxation Office (ATO). At least our short term VAs know when to fold.

The circumstances of this little imbroglio came to light on Monday in the NSW Supreme Court where a creditor is seeking to have wound up Adcon (VIC) Pty Ltd, one of the many Adcon entities in the stable of besieged builder Danny Isaac, who at times represents himself to be Sami Adib.

Isaac’s Descon Group is already in deep trouble with reported debts of $200 million and his Adcon group is subject to similar stresses, though bankruptcy proceedings to be heard in the Federal Court on May 15 will likely quell enthusiasm to accept VA appointments from here on in.

Indeed this would help explain why Jirsch Sutherland pair Chris Baskerville and Trent Devine were more than happy to relinquish their appointments as VAs of Adcon Admin Pty Ltd on April 19, three days after accepting.

In that short time the pair were probably appraised of the wishes of substantive unsecured creditors such as the ATO which had already voted last year to oust Hall Chadwick’s Richard Albarran and John Vouris from their roles as VAs of related entity Adcon Management Pty Ltd.

Albarran and Vouris were replaced by Langdon Grant’s Paul Langdon and Ian Grant and they’ve subsequently been appointed liquidators of that entity.

Langdon meanwhile was appointed singly as liquidator of Adcon Admin and has filed a notice of appearance in the bankruptcy proceedings with the intention of lodging an insolvent trading claim with Isaac’s trustee, assuming sequestration orders are made.

During the hearing on Monday the judge confirmed that Isaac’s self-inflicted conflict issue was cured by Baskerville and Devine’s resignation but queried why Isaac had now come back to court seeking an adjournment so as to allow his expert – Jirsch Sutherland’s Peter Moore – to prepare and finalise the solvency report in the next few weeks when Moore had already said the director wasn’t cooperating?

We asked Moore if he was any the wiser but no response was forthcoming prior to publication.

So we obtained the judge’s orders which show that Isaac has indicated he will file “a late expert report as to solvency on 10 May 2024 and the Plaintiff has foreshadowed that, if that occurs, it will serve solvency evidence in response by 17 May 2024, and reserve the question of any leave for the Defendant to rely on late expert evidence to the trial judge”. The hearing has been set down for May 24.