Scott Pascoe.
There is no shortage of opinions spiralling in the gyre of Jon Adgemis’s proposed debt compromise.
Not all creditors are what they seem. Adgemis will cut a deal. The ATO will blink.
“It is incumbent on the Trustees to ensure they have adequate remuneration to conduct these detailed investigations and carry out their required duties thoroughly before accepting the role of Controlling Trustee”. AFSA Media.
Also engaging those whose claims comprise the estimated $1.8 billion Adgemis and his companies owe is the question of how an experienced and highly regarded practitioner like Scott Pascoe wound up in a situation where the bankruptcy regulator appears more focussed on the conduct of the controlling trustees than that of the debtor?
After reporting on Friday that the Inspector General in Bankruptcy (IGB) Tim Beresford had issued Pascoe and fellow trustee Ben Ho with a formal Direction requiring them to adjourn the meeting scheduled for that day, iNO has learned that prior to the adjournment the IGB delegate in attendance Neville Matthew told the meeting that the controlling trustees would be issued with Notices to Produce.
We asked the IGB through the AFSA media team what material for production had been identified in the notices and also put the question to our sources in the legal sphere.
While the regulator was unable to provide a response by our deadline what came back from iNO’s sources was that the IGB will want the legal advice Pascoe and Ho relied upon to determine which creditors could be admitted to vote.
But for the IGB’s intervention the meeting would have proceeded to a vote on Adgemis’s miserly 0.15 cents in the dollar offer. When you’re in this deep you might as well be brazen.
With an adjournment till next month now in place Pascoe and Ho could face the appalling prospect of having to waive privilege or challenge the IGB’s right to view the advice in circumstances where they have already been directed to undertake further investigations into matters the IGB believes were not examined thoroughly and not detailed in the trustees’ supplementary report.
We asked the IGB if trustees could be forced to undertake work if there was insufficient assets in the estate to pay for it.
“It is incumbent on the Trustees to ensure they have adequate remuneration to conduct these detailed investigations and carry out their required duties thoroughly before accepting the role of Controlling Trustee,” the IGB said through its media unit.
The whole episode is suspect. The IGB, which insists it doesn’t comment on the circumstances of individual debtors, did just that on August 29 when it published the following statement: AFSA statement on the regulated debtor estate of Jon Angelo George Adgemis and controlling trustee actions.
Clearly Beresford knows when it’s time to invoke the exception to the rule rule.
The scandal of ex-trustee and now international fugitive Paul Leroy and the monies Leroy looted from the bankrupt estate of former Health Services Union secretary Kathy Jackson took place on Beresford’s watch.
He won’t want the regulator in the frame if another costly fiasco plays out in public in relation to Adgemis.
The solution? Heap pressure on the controlling trustees so that it will look like Pascoe and Ho’s failure if there’s a rupture.
No doubt the notices to produce come with a deadline and the trustees have also been instructed to produce a transcript of last Friday’s meeting and distribute it to creditors – including the ATO – and the IGB by week’s end.
It’s all sure to keep the gyre spiralling.
Further reading:
There comes a point in pre appointment inquiry as to how far funding becomes part of any investigation and therefore a disqualifying event in taking the appointment under the ISPS, ISPR, Guidelines issues by the IGB and the Code of Conduct of ARITA plus the Insolvency Standards. Obviously the distribution is in the Bond administration area of compromise and needs appropriate disclosure to the extent that information is available to the Trustees.