Inspector General in Bankruptcy keeping his promises

iNO OPINION

When AFSA CEO and Inspector General in Bankruptcy (IGB) Tim Beresford showered the personal insolvency profession with fire and brimstone earlier this year at the Association of Independent Insolvency Practitioners‘ (AIIP) conference in Canberra, he wasn’t kidding.

In an impassioned harangue replete with warnings about trustee standards Beresford left nobody in the room in doubt that licking the regulated population of trustees in bankruptcy into shape was his priority. 

Promising increased intervention, he spoke of a more activist IGB, the establishment of a “Trustee Taskforce” to focus on serious practitioner misconduct and exhorted his listeners to fulfil their duties in all aspects, including as whistle blowers.

“If you see something wrong, say something. Don’t walk past it. Don’t let it be the standard you accept,” he railed as his audience quailed.

That was a reference straight from the mouth of former Australian of the Year, republican activist and diversity zealot David Morrison and it should have warned those listening that here was an individual wearing ideologically tinted spectacles, an individual affronted by the profession’s slightly monochrome reality – many men, many of them white – and an individual determined to impose a vision of practitioners, advisers and their public service counterparts all singing and dancing to the same state-approved polka. 

Hard times a’coming beneath the heel of this new commissar. At least the profession can be reassured that they will know where they stand. A man of his word, Bereford’s already racked up several significant firsts.

These began with proceedings commenced in mid-2024 which ultimately succeeded in having set aside the Personal Insolvency Agreement (PIA) of Gold Coast lawyer Beau Hartnett, which had been recommended by Hartnett’s controlling trustees Anne Meagher and Adam Kersey of SV Partners. In February this year Hartnett’s estate was sequestered and Mackay Goodwin’s Gavin King appointed trustee. 

Then in August this year came AFSA’s intervention in the Personal Insolvency Agreement proposal put up by debt-besieged pub developer Jon Adgemis and endorsed by controlling trustees Scott Pascoe and Ben Ho of WLP Restructuring. 

AFSA issued Pascoe and Ho with a formal direction to adjourn a scheduled meeting at which creditors were to vote on whether or not to accept the PIA. 

Failure to comply the pair were told could result in “criminal penalties of imprisonment and fines of up to $39,600 in respect of conduct that obstructs, hinders, intimidates or resists the Inspector-General or his delegates in the performance of functions under the Act”.

Working with the ATO in its capacity as a significant creditor the two regulators were able to have Adgemis bankrupted via creditors petition, even securing a court order requiring the official receiver to refuse Adgemis’s debtor’s petition so that the ATO’s preferred trustee Andrew Yeo of Pitcher Partners secured the appointment. 

But as the scandal surrounding fugitive ex-trustee Paul Leroy shows, buddying up to Beresford buys no protection.

As iNO reported this week, AFSA filed proceedings in the Federal Court on Tuesday seeking orders forcing Leroy’s last employer to disgorge any remuneration Leroy or the firm obtained whilst Leroy worked there between June 2023 and January 2024.

This was despite Mackay Goodwin being kept in the dark by Leroy and ultimately bringing Leroy’s malfeasance to Beresford’s attention.

How Beresford thinks burning informants will encourage the trust which he says is essential to the proper operation of the personal insolvency system is unclear but if his track record is any indication it’s fear and not trust that is the AFSA boss’s preferred tool.

So far it’s unclear how Mackay Goodwin intends to respond to the proceedings filed this week or whether Pascoe and Ho will find themselves subject to any disciplinary or recovery sanction but what’s clear is that there’s now in Beresford an IGB willing to wield coercive powers. 

If he wants to continue drawing audiences however Beresford must make sure that that willingness does not metastasise into anything more.