Reaping almost $130 million from the sale of public houses looks like an exceptional result for a pair of Sydney receivers but a decision to affirm a director’s unit trust holding could see distribution of the profits disrupted by a Special Purpose Liquidator (SPL).
Since December 2021 when they were appointed receiver managers of the assets and undertakings of Peak Invest Pty Ltd ATF Peak Unit Trust; Five Islands Invest Pty Ltd ATF Five Islands Investment Unit Trust; Surry Hills Pub Invest Pty Ltd ATF Surry Hills Pub Unit Trust; Four By Four Investments Pty Ltd ATF Four By Four Investments Trust and subsequently liquidators of the trustee corporations, Wexted Advisors’ Joe Hayes and Andrew McCabe have sold the relevant entities’ pub assets and adjudicated on creditor and unit holder claims.
That done they made the necessary filings in the NSW Supreme Court with the intention of applying on November 21 for orders approving the distribution of more than $50 million.
But not all players in this saga were happy with the conclusions Hayes and McCabe had arrived at in their adjudications, as the pair noted in a letter sent on the same day to Hall Chadwick partners John Vouris and Sule Arnautovic, who are the deed administrators (DAs) of Corrimal Pub Pty Ltd.
“One creditor / unitholder has raised concerns over our adjudication of the units held by Mr Damian Kelly and / or his related entities. Those concerns relate to the 35 units in the Surry Hills Pub Unit Trust acquired by Bulli Pastoral Co Pty Ltd (Bulli), a related party of Mr Kelly.”
Hayes and McCabe were writing to the DAs because according to their investigations, a loan from Corrimal to Kelly to purchase trust units in Pub Unit Trust had been repaid.
“It would therefore appear from the financial statements of Corrimal that to the extent the Payment was made by way of a loan from Corrimal to Mr Kelly and/or his related entities, for the acquisition of 35 units in Surry Hills Pub Unit Trust, that loan has been repaid as Corrimal’s financial statements do not disclose any director loan balance outstanding at the time the accounts were executed on 27 January, 2022,” Hayes and McCabe said.
The letter to the DAs was written after the pair had received notice early on November 21 of objections other unit holders had taken to their adjudication of Kelly’s trust unit entitlement.
In that notice the Wexted duo were served with an unfixed interlocutory process seeking an order pursuant to section 90-15 of the Insolvency Practice Schedule (Corporations) (IPS) for the appointment of Anthony Elkerton as SPL of Surry Hills Pub Invest Pty Ltd.
Hayes and McCabe were advised that the applicants want Elkerton to investigate “the purchase of units in the Surry Hills Pub Unit Trust by Bulli and any other related entity of Mr Kelly”.
So much for a pre-Christmas hail storm of dividends for unit holders and creditors alike.
When the parties turned up for the distribution application and the judge learned that there was an application afoot to appoint an SPL and that Kelly hadn’t been given notice to allow him to respond he adjourned the mater to December 12. Next Monday should be interesting.