Using your casting vote to overcome opposition to the payment of your predecessor’s fees ought to earn a liquidator something, right?
In the case of Ian Niccol, that something might be a placatory word from his predecessor in the ear of a certain director who’s given Niccol hell ever since he was appointed liquidator of Rio Dorado Limited by order of the court on November 10, 2023.
“Whilst I do intend to respond to Mr Mares’ latest correspondence in due course, creditors should note that Mr Mares’ behaviour and constant barrage of allegations has been unhelpful, resulted in unnecessary costs being incurred in the liquidation and has the potential to derail the realisation of the Company’s interest in the Sabaleta Mining Concession by persisting with a claim against the Ecuadorian subsidiaries.” Ian Niccol, Principal, Aston Chace Group.
In ordering that the company be wound up and its incumbent administrator not be appointed as liquidator, NSW Supreme Court Corporations judge Ashley Black dropped Niccol into the kill zone, as evidenced by Niccol’s most recent report to Rio Dorado’s creditors.
Dated February 9, 2024, the report includes a variety of references to Rio Dorado director Gary Mares, who would appear to be somewhat displeased about the appointment of Niccol in preference to his own nominee, the company’s former administrator David Levi.
Mares, Niccol told creditors, “had previously raised allegations of impartiality, unprofessionalism and independence in relation to my role as Liquidator of the Company”.
Further, Niccol said that Mares “has continued to attempt to obstruct the process of the Liquidation
and has recently issued correspondence to my office threatening to report my staff and I to the Australian Securities and Investments Commission (ASIC) and the Australian Restructuring, Insolvency and Turnaround Association (ARITA), and Chartered Accountants Australia and New Zealand (CAANZ).
“Whilst I do intend to respond to Mr Mares’ latest correspondence in due course, creditors should note that Mr Mares’ behaviour and constant barrage of allegations has been unhelpful, resulted in unnecessary costs being incurred in the liquidation and has the potential to derail the realisation of the Company’s interest in the Sabaleta Mining Concession by persisting with a claim against the Ecuadorian subsidiaries,” Niccol said.
“In short, Mr Mares has failed to adequately respond to a number of my queries, has failed to counter evidence which seemingly does not agree with his position, and continual push (sic) that I resign and have Messrs (Richard) Albarran and (Brent) Kijurina) of Hall Chadwick appointed as replacement Liquidators.”
Mares campaign to oust Niccol began last year with Mares gathering sufficient support to force Niccol to convene a meeting to allow a vote on two resolutions, one which proposed that Albarran and Kijurina replace Niccol and a second to approve Levi’s fees for his time as voluntary administrator (VA), a period from October 23 to November 10 which apparently required Levi and his staff to generate fees and expenses of almost $140,000.
The meeting, which Niccol adjourned until January 16, was convened shortly after Levi failed to repel an application brought by the petitioning creditor in the wind up proceedings, who wanted the Pitt Street-based liquidator to pay personally the costs they incurred opposing Levi’s adjournment application.
Levi had filed submissions in opposition to such an order and made what we understand was a low ball offer but the plaintiff refused and, after Justice Black advised that he may need to consider certain unspecified matters in respect of Levi’s conduct of the administration, Levi blinked and agreed to pay the $25,000 legal bill out of his own pocket.
Orders were subsequently made by consent in Justice Black’s chambers before the matter was due to be heard on the afternoon off December 15.
Fortunately for Levi, his fee claim found its way onto the agenda of the meeting Mares had engineered and when the votes were deadlocked Niccol used his casting vote to ensure his predecessor got paid.
You would think that given Levi had chosen not to open himself up to Justice Black’s acute brand of scrutiny on the the petitioning creditor’s claim for costs that Niccol might have been prepared to bet that Levi wouldn’t bring an application for approval of his fees before the same judge, but Niccol appears not to have considered such a possibility.
Instead he’s done Levi a favour and if he’s asked Levi to try and muzzle Mares by way of a favour in return well, based on his most recent report, either Levi isn’t asking or Mares isn’t listening.
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Further reading:
Liquidator invites adverse findings scrutiny
Dissatisfied directors try again with Hall Chadwick
More 11th hour VAs crushed by courts
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