No love for receiver in loan account imbroglio

Trying to consolidate the loan accounts of warring directors can be tough enough but if you want a real challenge add the animosity that’s reserved for disputes involving directors who are related. Desmond Teng knows all about it.

In October last year the Byrons corporate recovery partner was appointed receiver of Love D&V XOXO Pty Ltd and D & V Vlahos Pty Limited, the latter entity being the corporate trustee of the D & V Vlahos Trust.

Prior to Teng’s appointment the companies, the trust and its assets were controlled by cousins Danielle and Vicki Vlahos, founders of the Portia & Scarlett fashion brand.

With funding from Danielle Vlahos Teng was able to trade the business until he and his team could close a sale to Atlanta, USA-based Allure Brands in December.

As it’s transpired, that was the easy part. On Monday the NSW Supreme Court heard that Teng required directions as to how to proceed in reconciling and making a determination in respect of the directors’ loan accounts, which based on the most recent RoCAP lodged by Teng indicate that $3.567 million is owing by Vicki Vlahos, $2.77 million is owed by Danielle Vlahos and almost $1.7 million is owed by the trust.

The RoCAP was signed by Vicki Vlahos as director and CEO and dated January 23, 2024.

Danielle Vlahos has yet to submit a signed RoCAP and Teng meanwhile needs to progress the job.

That however requires that he make determinations in respect of the loan accounts, something he can’t do until he has all the necessary supporting documentation.

To get that Teng needs to proceed against the parties using company money, hence his application for directions in that regard and for court approval of his claim for more than $500,000 in remuneration.

Vicki Vlahos meanwhile wants Teng’s remuneration claim independently reviewed via a referee and lawyers for the sundered cousins – who it seems are united only in their opposition to Teng’s application – complained on Monday that Teng had already obtained directions in respect of the loan accounts determination.

But when the judge asked those assembled before him if the earlier orders had “empowered” or “required” Teng to make a determination in respect of the loan accounts straight answers were exceedingly scarce.

In the ensuing silence his honour directed Teng to file a statement of facts, matters and circumstances as he understands them by May 6 and the matter will return to court on date to be determined.