Spurned creditor, irate director, frustrated shareholder and jilted buyer makes for a potent shot of resentment, particularly when distilled into a single individual but this is the draught three Hall Chadwick partners may have to swallow after proceedings were commenced in the Supreme Court of Queensland challenging their wildly underestimated fees.
Preparation of this witch’s brouhaha began shortly after Hall Chadwick’s Marcus Watters, Richard Albarran and Kathleen Vouris were appointed voluntary administrators (VAs) of four corporate entities involved in the operation of childcare centres in semi-rural districts around Brisbane.
The Chadwickians were appointed to St Bernard’s Village Child Care Centre Pty Ltd (SBVCC), St Bernards Village Investments Pty Ltd (SBVI), Mt Cotton Village Child Care Centre Pty Ltd (MCVCC) and Panially Pty Ltd (Group) on June 15, 2023 following pre-appointment communications with two of the Group’s three shareholder directors.
This was two days after the third director/shareholders had offered to buy one of the childcare centres from the other two director/shareholders, not knowing at the time that his co-directors were in talks with Hall Chadwick after HC Consult’s Andrew Crawley received a referral from Marsh Tincknell Accountancy partner Brett Dunn. Dunn is the son of Group shareholder and ex-director of SBVI and SBVCC Barry Dunn.
Upon learning of the appointment of the VAs, shareholder director Chris Scroope applied for and obtained winding up orders.
Watters, Albarran and Vouris were appointed liquidators of the Group entities on June 29, 2023 and on October 6 were appointed receiver managers of the Group’s four underlying trusts.
Estimating fees at the commencement of an external administration is necessary but notoriously difficult.
According to documents filed with the court the VAs provided an initial estimate of their likely remuneration, which included trading the centres whilst in liquidation, of $440,000.
Subsequent updates provided to creditors in the reports and collated for the Supreme Court proceedings show that those estimates have ballooned, taking existing and anticipated remuneration payable to the completion of the Group liquidations to more than $1.5 million.
That disparity has enraged Scroope in circumstances where there has been a spectacular falling out between himself, and fellow Groups shareholders Barry Dunn and Gordon Leck after they formed suspicions around 2021 that the managers they employed to operate the Centres had been misappropriating funds and undermining the businesses’ profitability.
At time of publication no charges had been laid and iNO makes no suggestion of wrongdoing.
Further antagonising Scroope has been the liquidators’ rejection of portions of his proof of debt in circumstances where funds generated during the trade on have been applied to pay invoices issued by Dunn and Leck’s lawyers Rostron Carlisle.
Such is the acrimony that those rejections are now also being challenged in the courts with a hearing set down for next week.
The challenge to the liquidators’ remuneration is to be heard on May 15 and 16 but at a meeting of creditors in May last year Watters, Albarran and Vouris offered to trim $100,000 off their past remuneration and $100,000 off their prospective remuneration, conditional on them not having to apply for court approval or defend any litigation.
Scroope commenced his application for a review of the fees in January and iNO’s mail is that this week the liquidators advised through their solicitors at ENYO Lawyers that in light of the litigation they will be drawing the full amount approved at the May 2024 meeting and making an application in court for a further $200,000.
Isn’t it good to see a good old “stoush” over fees in an administration. There was Burrup Fertilisers involving the former PPB partners in the Western Australia administration.