It might be thought wise to never let someone who’s after your job address those who’ve assembled to decide your fate, but Richard Lawrence risked it yesterday when he temporarily vacated the chairman’s seat at the first meeting of creditors of Balmaine Gold Pty Ltd.
The partner from the Hall Chadwick Melbourne practice made the decision some two and a half hours into the meeting so as to allow KordaMentha partner Richard Tucker to speak to the large throng of Balmaine creditors who’d turned up at the Eureka Ballroom of the Ballarat Mercure in the historic mining town of Ballarat.
“What you’re implying is highly offensive to my profession and to me personally.” Richard Lawrence, Hall Chadwick.
Thy’d come to hear the grisly details of their customer’s or employer’s plight, and to decide if Lawrence and colleagues Richard Albarran and Cameron Shaw should be replaced.
Tucker meanwhile had travelled from his hometown of Perth, having consented along with colleague Sebastian Hams to act as replacement administrators of Balmaine Gold, which is the operator of the troubled Ballarat gold mine.
Unfortunately the audio visual technology made available to the meeting organisers wasn’t up to scratch and the only microphone that was adequately conveying what was being said to those attending remotely was in front of Lawrence’s chair so he temporarily vacated the “hot seat” as someone nearby described it so Tucker could present his pitch.
The offer however might also have been timed so Lawrence could get some respite from that hot seat, given he’d endured a period of intense questioning from creditors and been involved in a spicy exchange of pleasantries with King Wood Mallesons partner Mark Troiani, the latter having been engaged by Balmaine’s Singapore-based owner Shen Yao Holdings Limited to bring proceedings to set aside the administrators’ appointment. That challenge is scheduled to be heard in the Federal Court this morning.
During their exchange Troiani demanded that Lawrence tell the meeting how he, Albarran and Shaw could possibly be impartial in respect of investigating the validity off their own appointment given their appointor, secured creditor GI 306 Pty Ltd, had installed them after Balmaine defaulted on a $25,000 interest payment in February, which was subsequently paid in March.
Troiani said that in “35 years as an insolvency lawyer I’ve never seen such a thing”, referring to the fact that the there’d been $4 million in the bank account at the time of the default and GI 306 could have simply appointed a receiver to recover the sum, thereby avoiding the cost and inconvenience associated with appointing administrators.
Querying the basis for the appointment however wasn’t the only bee in Troiani’s bonnet. How, he demanded, could Lawrence and the other administrators act impartially in respect of investigations of the reasons for their appointment, given the significant pre-appointment discussions that had commenced in January this year, almost a month before the event of default.
“What you’re implying is highly offensive to my profession and me personally,” Lawrence responded, before pointing out that it’s not the administrators’ role to investigate their appointor in respect of the circumstances of the appointment.
None of this would likely have impressed the many employees and trade creditors who’d attended in person to vote so giving Tucker the floor might well have been a way to get the creditors’ attention off uncomfortable topics.
Tucker launched into his spiel, replete with references to the various mining companies he’d successfully restructured and the odd profanity as he gauged the no nonsense mindset of the creditors present.
He also dismissed as “just a lot of shit” the conflict issue that had been raised due to the fact that KordaMentha had previously been sounded out about a related engagement but as it turned out, this was an issue not so easily ignored.
When counting on a poll on the resolution to replace the administrators was concluded the value was in favour of the KordaMentha pair but the numbers were against.
In those circumstances Lawrence said he wouldn’t use his casting vote to push through the resolution – no conflict there of course – because KordaMentha had a conflict and because GI 306 had indicated to him that in the event the KordaMentha pair were installed it would appoint a receiver.
Well, if recovering its $25,000 interest payment was always what it was all about then Troiani’s question about why GI 306 didn’t simply appoint a receiver in the first place is a question that needs an answer.
Maybe Lawrence, Albarran and Shaw have known why not all along, which was why letting Tucker address the meeting was no risk whatsoever. Or maybe that question will be asked by the judge this morning. iNO will update the story on Friday.