It makes sense to know who your friends are, not least because then you’ll then know that those of them closest must be the enemies.
But for one Sydney liquidator, not knowing what his colleague was capable of has come back to bite, hard.
Last month the Commonwealth of Australia via the Department of Employment and Workplace Relations (DEWR) filed a Statement of Claim (SoC) in the New South Wales Supreme Court.
The first defendant is Aston Chace director Steve Naidenov, the second is his former friend and now disgraced ex-liquidator David Iannuzzi, who was Naidenov’s colleague when both men worked at Iannuzz’s Veritas Advisory.
The third defendant is MK Floors (QLD) Pty Ltd (MK QLD), a name regular iNO readers will recognise given the extensive coverage we’ve devoted to this sorry, albeit colourful saga.
In its 44 pages, the SoC and supporting affidavits contain various allegations of breaches of the duties the Commonwealth say Naidenov and Iannuzzi owed to MK QLD and related MK group entities in their capacities as administrators from their appointment in 2016 and since.
The pair were appointed liquidators the same year but Iannuzzi was retired in May 2019, six months before he was struck off the roll of registered liquidators and banned from re-applying for registration for a period of 10 years.
Many of the allegations go to license agreements the liquidators entered into with Chiswic, a company associated with colourful accountancy identity Achilles “big Al” Constantinidis.
Accordant to the Commonwealth, while the agreements contained terms favourable to the MK Group and its creditors, in practice the benefits flowed overwhelmingly in Big Al’s favour that Naidenov and Iannuzzi must be made liable for the imbalance this created.
For example, between October 19, 2016 and December 16, 2016, Naidenov and Iannuzzi as administrators utilised the property of MK QLD to pay Chiswic $376,598.60.
According to the Commonwealth the Licensee had no entitlement under the Agreement to receive payment from MK QLD, no reasonable person would therefore have made those payments and as such the administrators breached their duties and MK QLD suffered loss.
We sought comment from Naidenov but he was unable to respond prior to our deadline. iNO makes no suggestion of wrongdoing.
Similar allegations are made in respect of MK NSW and MK ACT and the Commonwealth wants the pair to to pay damages and to make good the losses borne by the companies in circumstances where the losses ultimately meant there were insufficient funds to pay out all the entitlements owed to non-secured Priority creditors which meant the Commonwealth had to fork out employee entitlements to MK staff via the FEG scheme.
The first order of business of course is for the Commonwealth to win its as yet unresolved application for leave to proceed against the liquidator, former liquidator and companies in external administration.
Given that of the two individual defendants Naidenov is the one with a paid up professional indemnity insurance policy while Iannuzzi’s policy is probably in run-off, he’ll also be the primary target. Friends. They’re like fee estimates.
This story is published for the benefit of iNO Priority holders and must not be shared, copied, reproduced or otherwise distributed without the written permission of the publisher.
Further reading:
Referrer Identified As Possible Shadow Director
MK Floors: Liquidator Describes Director He Didn’t Meet
Be the first to comment on "The perils of joint & severalism"