Liquidator replaced – conduct to be reviewed

Conduct to be reviewed
Mackay Goodwin principal Domenic Calabretta. Image courtesy Mackay Goodwin.

Domenic Calabretta’s handling of the Condura Pty Ltd MVL and CVL will be reviewed after a court ordered that the Sydney liquidator be replaced by Ferrier Hodgson’s Robyn Duggan.

Calabretta was appointed liquidator of Condura via a members voluntary liquidation (MVL) back in December 2017.

By August 2018 the MVL had become a creditors voluntary liquidation (CVL) and the Commonwealth Department of Jobs and Small Business’s FEG Recovery Team was taking an interest.

Orders were made in the Federal Court on February 19, 2019 directing that the Mackay Goodwin principal be replaced by Duggan.

Shortly thereafter Duggan discovered that the company had been deregistered on January 25 this year.

That precipitated an urgent interlocutory hearing on Monday, arranged so Federal Court judge David Yates could make orders to resurrect the company.

INO went along to hear how it all came about.

While Calabretta did not attend personally his appearance was noted for the court record.

It seems that either he or one of his staff mistakenly filed a 5603 End of Administration form with ASIC in September year 2018.

The FEG Recovery Unit – which had already failed to replace Calabretta at previous meetings of creditors – commenced proceedings in the Federal Court in late December 2018 to have him replaced.

After the requisite orders were made on February 19, 2019 Duggan lodged her appointment documents and the deregistration error was uncovered.

Justice Yates heard that in nine letters that passed between Calabretta’s lawyers and KingWood Malleson’s (KWM) Natalie Tatasciorie for FEG, no mention was made that the company had been deregistered.

“The Commonwealth regards that the filing of the wrong form has frustrated the continuation of the creditors voluntary liquidation,” senior counsel Jeremy Giles told the court.

Unsurprisingly, among the orders sought was that the costs of the applications be born by Calabretta personally and that he have no recourse to Condura’s assets, an order to which Calabretta consented the court heard.

More worryingly for Calabretta though were the judge’s comments in regards to evidence he said he’d seen regarding the early stages of the administration, prior to Condura being placed into insolvent liquidation. These issues he said would be reviewed.

That evidence, the judge said, indicated that “The first defendant (Calabretta) had not conducted the MVL with the due diligence, care and skill required of a liquidator.”

The judge also remarked that it would be inappropriate for the first defendant to investigate these matters when his conduct may have facilitated them.

Those issues he said included some $620,000 allegedly paid out of the company, ” …. either to the former director or at his direction …”.

Calabretta did not respond to requests for comment.

Further reading:

Liquidator Repels FEG Replacement Bid – For Now

Commonwealth Moves To Clip Liquidator

1 Comment on "Liquidator replaced – conduct to be reviewed"

  1. Interesting, so if a liquidator or someone within a liquidators office is assisting a company months before a VA, that company should not take the VA?

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