Gujarat fee deadlock to be broken by court

It’s almost six years since Sydney practitioner Guy Baxendale was appointed liquidator of Gujurat NRE India Pty Ltd (Gujurat) and despite paying an interim dividend of $4 million he’s yet to see a cent in fees. Major creditor AXIS Bank has seen to that.

The Mumbai-headquartered offspring of India’s oldest mutual fund manager, AXIS has resolutely opposed Baxendale’s requests to vote on fee approval without convening a meeting whenever’s he’s proposed them.

The bank’s position may be based in part on the idea that having obtained judgment for its debt against Gujurat before Baxendale’s appointment on December 14, 2020 its claim shouldn’t be treated equally with those of other unsecureds, foremost of which is the Australian Tax Office (ATO).

Progress towards further dividend payments has been delayed as Baxendale sought a ruling on withholding tax and AXIS has stuck to its guns, refusing to offer its 97 per cent of the total admitted claims in support of fee approval.

Initially Baxendale estimated total remuneration would likely cap at $300,000.

AXIS’s obstructionism has long since put that estimate in the shade, as the Federal Court heard yesterday when lawyers for Baxendale and AXIS came before Justice Ian Jackman ahead of a hearing on the contested question in August.

Forced to apply to the court for approval Baxendale is now seeking $939,000 plus GST. The judge’s reasoning should be instructive, particular in respect of his views as to the position taken by AXIS.