Liquidator repels FEG replacement bid – for now

Mackay Goodwin’s Domenic Calabretta has fought off a bid to replace him with Ferrier Hodgson partner Robyn Duggan but the Minutes of the September 24, 2018 meeting of creditors of Condura Pty Ltd suggest those backing Duggan aren’t giving up.

Condura Pty Ltd appointed Calabretta via a members voluntary liquidation (MVL) on December 6, 2017, one day after the company lodged a declaration of solvency with ASIC.

But in August this year a creditors voluntary liquidation was proposed in light of some change in Condura’s solvency status.

We don’t know what changed – the August 28, 2018 report to creditors isn’t falling off the back of any trucks in INO’s jurisdiction – and the Minutes of the 24th provide no detail in that respect.

But what they do reveal is that Condura’s priority creditor, the FEG Recovery Unit, wanted Calabretta gone and may still be of that view after the resolution calling for Duggan’s installation was defeated by creditors.

According to the Minutes Duggan turned up at the meeting accompanied by FEG Recovery czar Henry Carr and King & Wood Mallesons (KWM) senior associate Natalie Tatasciore.

During the meeting Tatasciore told Calabrettawho was chairing the meeting that given that the business had been insolvent for some time including whilst he had acted as liquidator under an MVL, FEG did not regard him as independent.

Calabretta insisted he was independent and added that appointing Duggan would lead to duplication of costs.

That appeared to prompt Vaucluse ragtrader Eliezer Alster to complain that if Duggan was appointed it could delay finalisation of the matter and diminish his return.

Tatasciore appears to have dealt with that by informing the Vaucluse ragtrader and former owner of the business that his claims was unsecured, unlike FEG’s.

What the Minutes also make reference to is a sale of the business at an unspecified date and the status of debtors pre and post sale.

Certain claims against the company were apparently paid during the MVL period in accordance with legal advice and Carr is recorded as asking if the debtors related to a security held.

“The Chairperson advised that the debtors were not the property of the Company as at the date of the appointment and that many had been collected in a pre-appointment bank account and subsequently remitted,” Calabretta told the meeting. $40,000 remained of what he and his team had collected from post-sale debtors.

Despite Calabretta insisting he was still independent Tatasciore on behalf of FEG flagged a court application to roll him if Duggan didn’t get the gig.

Whilst the Minutes are curiously obscured in relation to exchanges at this point of the meeting it appears that Calabretta, who was concerned about increasing costs, offered to ” .. negotiate in the event that the alternative liquidator is not appointed, prior to seeking court approval.”

We asked Calabretta what that meant but he had not responded by time of publication. Our inquiries to FEG, Ferriers and K&WM elicited a similar silence but given this stoush sounds like it has more rounds to run, we’ll stay seated ringside.