Kapp saga continues as trustees fall short

Trustee in Bankruptcy Andrew Aravanis.
Trustee in Bankruptcy Alexander Clark.

The most likely outcome flowing from this week’s court ruling in the bitter fight between the trustees of bankrupt ex-Corr’s partner Phil Kapp and his wife Maryann is likely to be an appeal.

“Although the bankruptcy trustees have had some success they have failed on most of their claims. Federal Court Judge Nye Perram.

On Wednesday Federal Court judge Nye Perram delivered his decisions in relation to two sets of proceedings brought by Kapp’s trustees, Andrew Aravanis and Alexander Clark, which the the judge heard together so as to “avoid the prospect of two appeals”.

As is explained in Justice Perram’s judgment, Aravanis and Clark submitted that Kapp had been personally insolvent since 2010 due to tax debts he had no intention of paying on the basis that he had received a terminal cancer diagnosis and a life expectancy estimate of four months.

In the decade proceeding 2010 Kapp and his wife Maryann had bought and sold a number of properties, incurring significant stamp duty liabilities while Kapp’s personal income tax debts mounted.

After his initial cancer diagnosis in 2008 and a recurrence in 2010 that was initially believed to be terminal, various transfers of property were made so as to ensure Maryann and the couple’s two sons couldn’t be rendered homeless by any recovery action commenced by the ATO.

It was those arrangements that Aravanis and Clark have been seeking to crack open but as is revealed in Aravanis (Trustee) v Kapp, in the matter of the Bankrupt Estate of Kapp [2023] FCA 702 Justice Perram has denied them most of what they are seeking.

Whilst Aravanis didn’t respond to requests for comment an appeal is anticipated.

Further reading:

ATO pursues cancer-stricken lit. funder to bankruptcy

Trustees seize high flyer’s holiday house sale proceeds

Litigation funder bankrupt

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