Bitter partnership dispute edges closer to end game

Anthony Warner isn't ready to surrender in his dispute with Steve Kugel.

CRS Warner principal Anthony Warner

Steve Kugel court win but dispute not over

Insolvency Experts’ principal Steve Kugel.

Liquidator Anthony Warner could potentially face a hefty payout to former colleague and partner Steve Kugel following a judgment handed down this week by NSW Supreme Court Justice Guy Parker.

In the 30,000 plus word judgment of Shazbot Pty Ltd v Warner Capital Pty Ltd [2018] NSWSC 1645 Justice Parker has painted an at times less than flattering picture of Warner in respect of the machinations he engineered to extract himself from the partnership with Kugel in late 2014.

Whether the judge’s depiction stands may depend on whether Warner, who declined to comment for this story when contacted, chooses to appeal or otherwise attempt to modify the judge’s findings.

And with a detailed accounting now ordered there’s perhaps just as good a chance that the estranged former friends both emerge with little if anything to show from a dispute now in its fourth year.

It was back in September 2014 that Warner apparently set in train a range of actions prior to advising Kugel that he wanted out, in effect springing his decision to leave on his partner without warning.

Kugel offered to go instead. Divvying up what each was owed from the partnership’s assets after liabilities were taken into account came next.

Much of the dispute revolves around the question of whether Kugel and Warner were in a partnership, a finding Warner resisted during the hearing.

The judge however found a partnership did exist, meaning Kugel’s company Shazbot was entitled to an accounting of the profits and losses of the partnership assets and ” … an account of profits or an award of equitable compensation arising from the transfer of its share in Debtfree Pty Ltd to Warner Capital (for consideration of $1.00) on 22 September 2014.”

Kugel now has 21 days to bring in short minutes of order setting out further directions for the conduct of the accounts provided for by the judgment, and to deal with costs.

The chances of the parties agreeing seems doubtful at this stage so we can probably expect some more surprises before these protagonists cease fire.

Further reading:

Ex-Mates To Go Toe To Toe Over Failed Partnership

About the Author

Peter Gosnell
Insolvency News Online illuminates the practice of insolvency Australia-wide, highlighting the triumphs and travails of the nation’s registered practitioners and the accounting and legal professionals who work with them. INO is produced by Peter Gosnell, former business editor and senior business reporter at The Daily Telegraph newspaper. During a decade-long career, your correspondent reported on such notable corporate collapses as HIH, One.Tel, Westpoint and Fincorp as well as some of the nation's highest profile bankruptcies and the investigations and prosecutions arising from Australia's most notorious instances of white-collar crime.

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