If this isn’t victim blaming we don’t know what is. The Australian Financial Security Authority (AFSA) has commenced proceedings in the Federal Court seeking, amongst various forms of relief, orders requiring Mackay Goodwin to pay for monies purloined by fugitive ex-trustee and former employee Paul Leroy, who must qualify as the firm’s most disastrous ever hire.
In a media release issued late yesterday AFSA said it had sought “An order directing Mackay Goodwin, the firm that employed Mr Leroy, to account for all remuneration approved and/or received by Mr Leroy, Mackay Goodwin, or its agents in connection with the relevant bankrupt estates or property”.
Further, the personal insolvency regulator also wants an order requiring: “Mr Leroy and/or Mackay Goodwin repay such remuneration to the affected bankrupt estates and the individual whose bankruptcy was annulled”.
Given AFSA only learned about the extent of Leroy’s transgressions after being alerted by Mackay Goodwin, it seems pretty tough for the firm to be targeted.
Leroy joined Mackay Goodwin in mid-2023. Hopefully a recruitment agency didn’t pocket a fee for that referral.
The AFSA release also reveals that by the time he departed for the flesh pots of Paris in late 2023 Leroy had trousered more than $4 million from five bankrupt estates.
While the freshly minted proceedings seek orders requiring Leroy to make good the hapless Mackay Goodwin is the only party in the jurisdiction capable of complying if the orders are made.
The regulator will of course have to prove that the court has the power to order a service firm to disgorge funds obtained from legitimately approved remuneration claims.
No doubt AFSA has legal advice in the affirmative and iNO is keen to hear what a judge will make of it.
We asked Mackay Goodwin founder and CEO Domenic Calabretta if his firm would oppose the relief sought. He did not respond prior to iNO’s deadline.
Further reading:
The claims would not be by AFSA but probably the current trustee or perhaps the Inspecitor General in Bankruptcy.
PAL was of course operating at time under the professional indemnity policy of Mackay Goodwin, the cancellation of which led to him having his registration terminated.
PALs position as a trustee was however personal to him and not the firm. It is perhaps untested how the claims are sought to be maintained against the firm. This may depend upon the arrangements for his engagement.
Also having regard to Div 60 of the IPSB and IPRB strictly remuneration is to the trustee not the firm if it is separate incorporated entity. This is an issue with all registered trustee or external administrators,