Maybe it says something about Jay Weatherill’s Government in South Australia that even the insolvency operators are struggling.
The latest victim of Comrade Jay’s new age Leninism appears to be McGrathNicol, which well placed sources advise will close its doors on Level 26, 91 King William Street in the city of churches before the lease there expires on June 30.
Of course blaming the South Australian Premier’s lumpen interventionism is probably unfair. It’s more likely to be the demography of South Australia’s commercial landscape – plenty of small-to-medium enterprises but very few really big firms – that makes SA a tough place to thrive for the larger insolvency and restructuring outfits.
After all, the major firms have hordes of partners with five or so staff each charging $600 an hour and 2000 hours per annum. Without serious WIP those costs cannot be sustained.
Whatever the reason, the fact remains that well-regarded SA managing partner Thea Eszenyi and director Andrew Harding are either on the market or perhaps contemplating the firm’s offer to reposition out of state.
Eszenyi, who has been mentioned as a worthy replacement to fill the regulatory role being slowly vacated by Adrian Brown at the Australian Securities and Investments Commission (ASIC) did not respond to requests for comment.
Harding also declined to comment other than to suggest SiN call McGrathNicol’s executive chairman Peter Anderson. Which we did. Another SA office senior, Sam Davies, may have seen the writing on the wall earlier given he left the firm in November 2016.
The McGrathNicol withdrawal follows the retreat of the PPB brand from SA in the wake of the Peter Macks imbroglio and KordaMentha’s decision to shut up shop a few years ago.
Whether McGrath will now follow the lead of those two and chase more work on a fly-in-fly-out basis remains to be seen. That has its risks, as PPB found out when its receivership of Burrup Fertilisers in West Australia (WA) led to a judicial inquiry by a Federal Court judge.
When the dust settles around Arrium, we’ll know if KordaMentha has managed to avoid the mistakes in South Australia that led to PPB being so heavily scrutinised for its heavy-handedness in WA.