Death of a director leads liquidators full circle

When a director dies it’s not necessarily the end of the story. Just ask Melbourne liquidator Peter Goodin. Or the practitioners who replaced him. Or the liquidator who replaced them.

This story started with the death in January 2018 of Mr Jun Chen, sole director of Good Home & Property Pty Ltd.

By the following year the company had been deregistered and that might have been the end of it but for the fact that the company, which operated a real estate enterprise, had accepted deposit funds from a client for the purchase of a property that was never completed.

Understandably the prospective purchaser wanted to retrieve their funds if the sale wasn’t going to proceed. But the company’s solicitors – an outfit called Hiway Lawyers – refused to release the money from its trust account.

Hiway advised that as a consequence of proceedings brought by another disgruntled client of Good Home & Property, a freezing order had been made. The money must remain in trust.

An application brought in the Supreme Court of Victoria then saw the company reinstated in June 2020 with Goodin appointed as director.

Determining that the company was solvent he placed the company into a Members Voluntary Liquidation (MVL) and appointed himself liquidator.

By September 2021 however Goodin had resigned as liquidator and Lowe Lippmann’s Gideon Rathner and Matt Sweeney were installed.

They deemed the company to be insolvent and the MVL was converted to a CVL in November 2021.

Two months later at a meeting convened for the purpose, creditors voted to remove the Lowe Lippman pair and replace them with DV Recovery Management’s Daniel O’Brien.

At the same meeting creditors refused to approve resolutions for the payment of Rathner and Sweeney’s remuneration.

That set up a stoush between the former liquidators and O’Brien over entitlement to the monies held by Hiway, with the former arguing they held a lien for their fees and expenses.

But by this time the freezing order had been discharged and the funds released by Hiway.

That meant O’Brien could try again to get the company’s modicum of creditors to approve his fees and those of Rathner and Sweeney. In late 2022 he succeeded. And not only that, there were sufficient funds remaining for a dividend to be paid. Hell, even Goodin, who remains as sole director, might get a slice.