Brendan Copeland.
Those of you with a taste for the intricacies inherent in right of subrogation questions will, In the matter of Fellmane Pty Ltd (in liq) [2020] NSWSC, 595, find much meat in which to sink your fangs.
In this matter Hogan Sprowles partner Brendan Copeland has had to go back to the drawing board after a planned sale of an asset connected to bankrupt builder Vince Battaglia was foiled by rival insolvency practitioners.
Copeland is currently the receiver and manager of the Battaglia Family Trust and liquidator of Fellmane Pty Ltd, the trustee of that trust.
“Accepting that it is not the role of the Court to make a commercial judgment on the proposed transaction, I am not satisfied on the present evidence that sufficient and appropriate consideration has been given by the receiver to the disadvantages of the proposed transaction in terms of its effect on Fellmane’s right of indemnity against Mrs Battaglia.” Justice Fabian Gleeson.
He had wanted to enter into a Deed of Proposed Transfer and Release which would amount to a sale of one of the trust assets – a property on Stafford Street, one of the best streets in Gerroa on the NSW South Coast – to related entity Batfamt Pty Ltd.
Batfamt’s shares are jointly held by a Mrs Karen Battaglia and her son Steffano Battaglia.
Enter KordaMentha’s Rahul Goyal and Smith Hancock’s Peter Hillig, who are respectively the liquidators of SX Projects and 330 Co, which are in turn unsecured creditors of Fellmane.
In his May 21 judgement NSW Supreme Court judge Fabian Gleeson said the liquidators – who appeared as contradictors – were concerned that Copeland had not “attempted to obtain a better deal from Batfamt than that offered by the proposed transaction, or from a third party purchaser, and in either case, in conjunction with negotiations with the NAB to maximise Fellmane’s position in recognition of Mrs Battaglia’s ultimate liability for the NAB debt.
“Accepting that it is not the role of the Court to make a commercial judgment on the proposed transaction, I am not satisfied on the present evidence that sufficient and appropriate consideration has been given by the receiver to the disadvantages of the proposed transaction in terms of its effect on Fellmane’s right of indemnity against Mrs Battaglia,” Justice Gleeson said.
“Nor am I satisfied that the receiver has taken all reasonable steps to attempt to negotiate a better outcome for Fellmane, either with Batfamt, the NAB or potential third party purchasers.”
Love how the courts are so loathe as to make commercial decisions that they make them all the time!