Liquidators vying for appointment plum

The competitive juices will be flowing in the offices of those vying for the role of court appointed liquidators of Rynever Pty Ltd.

At present there’s four candidates from two firms in the hunt with the contest likely to be resolved next week after NSW Supreme Court judge Ashley Black hears argument from shareholders of Rynever seeking to have the company wound up and from Rynever’s directors, who aren’t opposing the appointment of liquidators as long as their nominees get the gig.

The plaintiffs of course are of the view that as the party concerned about how the directors have managed the company and its subsidiaries in recent years, appointing the directors’ nominees would potentially defeat the purpose of appointing a liquidator to conduct investigations, particularly of the kind the shareholders want undertaken.

Naturally they have their own appointees lined up and at the conclusion of the hearing on Monday the judge will likely determine which firm’s liquidators get to conduct investigations, secure in the knowledge that the company, though cash-flow poor, contains a precious plum in the form of freehold ownership of a western Sydney industrial complex valued at $15 million, though that valuation was provided via a Declaration of Solvency lodged with ASIC on December 11, 2023 by one of the directors’ nominees.

iNO asked Declaration author Morgan Kelly of EY if such pre-appointment involvement would disqualify him from accepting the appointment in the event that Justice Black sided with the directors’ nominees Kelly and colleague Martie Tziotis.

“The winding up of Rynever is on just and equitable grounds,” said in reply.

“If we are eventually appointed by the court, we will be required to complete our DIRRI and circulate it to creditors, which will include all of our interactions with the company prior to the court making orders,” he said.

A trusted source however said Kelly’s pre-appointment involvement could potentially create an additional hurdle for barrister and new father Daniel Krochmalik, who is acting for the directors on instructions from Vincent Young Lawyers.

As the judge said on Monday, the courts will normally appoint the plaintiffs’ nominees, all other things being equal which means the EY pair can’t be considered favourites for the job.

The pair who can are Worrells’ Graham Beattie and Daniel Cvitanovic with the latter possibly getting the referral via his long time connections with Wollongong, home to the plaintiff’s lawyer, Graham Lancaster of Lancaster Law & Mediation. Certainly Lancaster intends to make an issue of Kelly’s prior involvement, putting the defendants on notice in respect of their opposition, as outlined in a February 9, 2024 letter from Lancaster to Vincent Young Lawyers.

“The fact that Morgan Kelly was engaged by Messrs Hall and Lewis (Rynevers’ directors) without any prior advice, or consultation with the Plaintiffs has added to their concerns, and they do not consider that it is any answer to suggest that Mr Kelly is best placed to become liquidator due to his
“knowledge” of the affairs of Rynever and its subsidiaries,” Lancaster said.

The Declaration of Solvency was lodged with ASIC on December 11, 2023, less than a week after the shareholder applicants commenced proceedings to have Rynever wound up.

The three page solvency report reveals little about Rynever’s financial performance but it does indicate that the western Sydney freehold site has a value of $15 million and the company’s liabilities total some $4.85 million.

Plenty of plum to spare there and that’s without investigating any potential recovery that might flow from investigations of a variation of lease agreement entered into shortly before the winding up proceedings were commenced that appears to have allowed the tenant at the site – which is also part owned by Rynever’s directors – to avoid paying in excess of $400,000 in rent.