Certain creditors of a North Sydney-based ad agency are apparently so incensed with Liam Bailey that they’ve forced him to convene a meeting next week to consider replacing the O’Brien Palmer partner as liquidator of McCorkell & Associates (McCorkell).
While trade media coverage has suggested the creditors have been irked by pre-appointment referral advice Bailey provided to sole McCorkell director Scott Keith McCorkell prior to the winding up, Bailey told iNO that the request to convene a meeting was for a very different reason.
“One of the creditors demanded access to the books and records of the company,” Bailey said yesterday, adding that he was well within his rights to decline such a demand, unaccompanied as it was by any order of the court.
His refusal he said prompted the creditor – who is the former managing director – to petition to convene next Wednesday’s meeting.
This was a very different reason to that reported in trade media, which focussed on Bailey’s referral of a business valuer to the director ahead of the director executing a business sale agreement (BSA) which saw the business assets and the bulk of the employees transferred to a recently incorporated entity called the McCorkell Group Pty Limited on December 14, 2022.
Trade debtors of more than $1 million were also assigned to the new entity and Bailey was appointed liquidator the following day.
McCorkell Group, which is jointly owned by Scott and Georgina McCorkell, was brought into corporate being on November 24, 2022.
The valuer Bailey referred to McCorkell was Groves & Partners director Andrew Whittingham, son of veteran Sydney liquidator Ken Whittingham who these days plies his trade at Kroll.
After accounting for total liabilities of $2.208 million, including the transfer to McCorkell Group of almost $1.65 million in employee entitlements and an assignment of a secured debt of more than $560,000, Whittingham valued the business at a shade under $30,000.
Bailey has already reported that he regards the valuation as reasonable and the BSA as having been conducted on commercial terms.
The BSA contemplated the transfer of 41 employees to the new entity. That left Bailey having to tell 18 staff their employment had been terminated 10 days before Christmas.
Bailey was adamant his referring of a valuer was not the reason certain creditors wanted him replaced. It was he insisted, all about his refusal to allow access to the books and records.
Curiously he’s already had a resolution passed to enable destruction of said books and records before the statutory 5 year period despite the director not producing a RoCAP as at January 31, 2023.
But if next Wednesday proceeds as certain creditors want, the books and records issue will become a problem for aspiring replacement liquidator Michael Hogan of Hogan Sprowles.