Receiver’s ripper return didn’t satisfy beneficiary

It should be impressed upon young accounting and finance types contemplating a career in insolvency that they should abandon all hope of ever receiving an accolade from a grateful creditor.

In the game they’ve chosen to play, thankless silence is a ticker tape parade.

“What’s in issue is the level of attention to detail, the staff and title of the staff recorded and their charge out rates.” NSWC Supreme Court judge Ashley Black.

Deloitte’s David Mansfield however is currently enduring something towards the other end of the spectrum of creditor engagement, where persistent dissatisfaction manifests in complaints being brought before a court despite efforts which a judge this week described as “extraordinarily successful” in terms of sale proceeds Mansfield realised as receiver of the property of the CXGY Unit Trust.

That extraordinary success has not placated in the least Ms Hung Shang of Pymble, sole director of VSH Investment Pty Ltd (VSH) and owner of 20 per cent of the CXGY Unit Trust of which VSH, in liquidation since 2019, is trustee.

Mansfield was appointed liquidator by order the NSW Supreme Court in 2019 on an application brought by the Chief Commissioner of State Revenue and his forecast that the winding up would take approximately 12 months – contained in the May 27, 2019 Report to Creditors – suggests even this jaundiced insolvency veteran didn’t anticipate the internecine struggle between unit holders that was to take place, or the capacity of Shang to divine flaws in his conduct.

Fortunately for Mansfield on Monday a more temperate and disinterested mind called the shots when Mansfield’s application for approval of his remuneration as receiver of the trust assets and as liquidator of the trustee came before Justice Ashley Black.

Shang sought to have the quantum of the remuneration claim reduced by $100,000 on a variety off grounds.

Mansfield it appears had produced two remunerations reports, the first of which contained rates entered incorrectly and his counsel conceded that they contained discrepancies that couldn’t be explained by inflation alone.

There were also references to WIP Reports with time being booked for the payment of invoices,

“What’s in issue is the level of attention to detail, the staff and title of the staff recorded and their charge out rates,” Justice Black summarised, as he sought to prevent the dispute from consuming the $50,000 that Mansfield had retained pending finalisation of the disputes between the shareholders and the unit holders.

Mansfield had also dropped his claim by some $10,000 to $11,000 and his counsel suggested an additional lump sum reduction of a further $5,000 as a way forward but Justice Black wasn’t going to let Mansfield off before he submitted an accurate record.

The judge might have been impressed with the $2.35 million Mansfield obtained for the trust property in 2024 but that didn’t mean he should submit a rigorous remuneration report in support of his fee claim and orteded that further calculation take place.

Ms Shang, the primary beneficiary of Mansfield’s success in extracting such a generous return for the unit holders was unsuccessful in her bid to further impoverish her benefactor, at least for now. Aspiring practitioners take note.

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