VAs acquiesce to fee cut after liquidator objects

Cor Cordis partner Jason Tang agreed to fee cut

Cor Cordis partner Jason Tang: Image courtesy Cor Cordis.

Cor Cordis partners Ozem Kassem and Jason Tang have had the fees they generated as administrators of Attack Engineering Pty Ltd lopped following objections by Steve Nicols, who replaced them when the company was wound up.

Kassem and Tang were appointed administrators of the Coffs Harbour-based firm on August 29, 2017 after receiving a referral from Shine Lawyers’ James Hulbert.

That appointment followed winding up proceedings initiated by the Australian Tax Office (ATO) in June of 2017 being adjourned by consent.

A very brief trade on period followed but no Deed of Company Arrangement (DoCA) was forthcoming.

After they were replaced in September 2017 Kassem and Tang subsequently applied to have the remuneration for their work during the administration fixed by the Court.

Nicols, who had replaced the Cor Cordis pair at the behest of the ATO, seemingly concluded that $166,000 was coming it a trifle high.

“…. affidavits were exchanged and a detailed work-in-progress ledger was prepared setting out objections made by the Liquidator to particular items of cost claimed and the Administrators’ responses to those objections”, Supreme Court judge Guy Parker said in Tang v Arc Attack Engineering Pty Ltd [2018] NSWSC 1891.

“When the matter came on for hearing before me, however, the parties had reached agreement. This involved a reduction in the amount claimed from approximately $166,000 to $119,000. Counsel for the Liquidator indicated that the reduced figure is a proper one.”

Well Counsel – being former liquidator and Hall Chadwick partner and now barrister Geoff Macdonald – would say that, wouldn’t he.

What was disappointing from INO’s perspective was that the disputed items of cost weren’t detailed in the judgment.

Nicols declined to comment for the record while the former administrators said he it had been a long, drawn-out matter, indicating perhaps that in the end getting in a large portion of three quarters of their fee before Christmas was the preferable to a less certain outcome, inevitably delayed.

“Our renumeration claim of $166k comprised of our appointment time, time spent post-appointment appropriately handing over the file to Mr Nichols, and costs incurred in making the Court Application,” Tang said.

“In considering the above, in order to resolve the matter, we accepted Mr Nichol’s counter-offer of $119k (after much negotiation).”

Nichols’ agreement on the final terms was also dependent on the costs of the remuneration proceedings being limited to costs on a party/party basis.

For those of you who dwell in the labyrinth of costs, Justice Parker’s comments starting at Paragraph seven, may interest.

The judge ordered Nicols to pay $100,000 of the total within five business days which means the money is due tomorrow.

If Kassem and Tang are anticipating hefty invoices from ASIC for their industry funding contributions then the orders are nicely timed, though they would also have recourse to funds from certain opportunistic lenders who’ve identified a potential market of motivated borrowers.

About the Author

Peter Gosnell
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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