Jirsch partner sacked over $240k misappropriation

Amanda Young.

Jirsch Sutherland partner Amanda Young has been sacked after allegedly stealing almost $240,000 from the accounts of insolvent companies she controlled as liquidator.

In a statement to Insolvency News Online (INO) late yesterday Jirsch Sutherland managing partner Bradd Morelli said that following undertakings Young provided to the NSW Supreme Court: “Amanda Young’s employment at Jirsch Sutherland has since been summarily terminated.”

She had also lodged with ASIC a request for suspension of her liquidator’s registration indefinitely, Morelli said.

Last Friday INO revealed that Jirsch had suspended Young’s employment pending investigations into alleged irregularities relating to a number of accounts she controlled as sole liquidator.

Young, who began work at Jirsch Sutherland in 2003, qualified for registration as a liquidator in 2013 and was made a salary partner of the firm in 2016.

In his statement Morelli revealed that she had allegedly misappropriated $238,502.23 from the liquidation accounts of four companies.

These were: Mamak Pty Limited (in liquidation); Roller Poster Company Pty Limited (in liquidation); St Gregory’s Armenian School Inc (in liquidation); and Admark Property Group Pty Limited (in liquidation).

$45,000 has since been recovered from solicitors’ trust accounts where it had subsequently been deposited. Morelli said there was no suggestion the laws firms were in any way complicit.

“It is alleged that funds from these liquidations were directed to accounts operated or controlled personally by Amanda Young,” Morelli said.

“In each case, these transfers took place without the knowledge or approval of any Jirsch Sutherland partner. There is no allegation or suspicion of any wrong doing by any current Jirsch Sutherland member of staff or Partner.

“The balance of $193,502.23 has been reimbursed into the subject liquidation accounts by the Jirsch Sutherland partnership pending any further recoveries from Amanda Young,” Morelli said.

Last Friday the Jirsch Sutherland equity partners sought and obtained orders for the replacement of Young as liquidator on a total of 18 appointments.

Young will be replaced by Morelli and partners Andrew Spring and Trent Devine, all of whom were listed as plaintiffs in the application brought against Young.

Also listed as plaintiffs were Victorian managing partner Glenn CrispMalcolm Howell, Lloyd Kerr and former NSW managing partner Sule Arnautovic, who is Young’s older brother.

In addition the files handled by Young will be scrutinised by an independent reviewer to be selected with input from ASIC, which has commenced its own investigation.

The corporate regulator said yesterday that it was alerted to the issue on December 11 and had been involved in discussions with the firm prior to the application last Friday, where it appeared as intervenor.

” …as part of the process, an independent reviewer would be appointed to review in the first instance the accounts of all administrations that Ms Young was appointed to,” an ASIC spokeswoman said yesterday.

“Creditors of all the administrations would receive a communication from Jirsch fairly disclosing the circumstances of the change in liquidators, the spokeswoman said, adding that ASIC had consulted with the Jirsch Sutherland leadership and concluded that it was appropriate Young be replaced with liquidators from Jirsch Sutherland despite the potential for the perception of conflict.

On Friday counsel for the plaintiffs told Justice Ashley Black that costs to creditors of changing appointees are generally lessened if the replacement is another liquidator from the same firm.

In the matter of FGM Print Pty Ltd and other Companies [2018] NSWSC 1983 Justice Black agreed.

“It seems to me that the case for appointing a liquidator from another firm is not established, as matters stand, where that would expose creditors to significant additional costs and where there may be no reason to do so,” the judge said.

“I am reinforced in that view by the fact that there is no doubt, in the relevant circumstances, that these matters will be the subject of regulatory scrutiny.

For that reason, I am not satisfied that the Court should depart from the common practice, where a liquidator resigns, of appointing another liquidator within the same firm.

“I am reinforced in that view by the fact that ASIC takes the same view, in the context of this application,” the judge concluded.

Morelli said Jirsch Sutherland would continue to investigate in collaboration with ASIC.

“These matters constitute a most egregious breach of trust for which we are all profoundly disappointed,” he said.

“The Jirsch Sutherland Partners are unanimous in their commitment to ensure that appropriate scrutiny is applied to Amanda Young’s matters with ASIC’s involvement and that creditors are in no way disadvantaged by these events.”

Further reading:

Jirsch Partner Suspended Amid Fraud Investigation

11 Comments on "Jirsch partner sacked over $240k misappropriation"

  1. Blood is thicker than water!!

    “Sule Arnautovic, who is Young’s older brother”. I cannot see how this matter can be handled independently within the firm where the brother is still a partner (as well as a further two brothers who are employees) and presumably still in touch with their sister. Yes the files can be independently reviewed by an 3rd party, however on the the facts of the case as stated, if the matter moves to charges being laid, would surely be compromised, with any information concerning the status of the current investigations and any further investigations required, potentially being leaked to the defendant.

    • You make a good point Shirley. I think most people would agree this is a poor outcome. I am surprised ASIC was not alive to this and sought to have an independent Liquidator appointed to the files.

    • If what Shirley has said is true then it would not be appropriate to use another Partner of the same firm to replace Young. It also makes me wonder whether this fact has been disclosed to the court at the hearing..

      • A good question. Justice Black seemed to think the independent reviewer and ongoing ASIC oversight was sufficient to quell any concerns around conflict but whether the regulator knew about the familial links is a separate question. How durable might Chinese walls be in a Serbian family or, if it is as the mysterious Nesa suggests, a Croatian one?

        • Shirley, one brother has left thought that still leaves two and a clear conflict.

          David M, What would be your gut instinct?

          Pnut, The Banking RC has shown us ASIC’s effectiveness!!

          Peter, You make valid points, having spent two arduous years in Bosnia i can assure you a
          Chinese Wall would be insufficient.

  2. I concur Shirley.

    Further to that any Liquidations she resigned from??

  3. I agree with you Shirley. What was ASIC thinking to allow Jirsch partners to take over her liquidations. Apart from the obvious conflict, the creditors have been duded and need protection when they are most vulnerable. ASIC may not have its heart in this one.

  4. Pnut ASIC thinking?

    Have to agree though,its very wrong.

    Jirsch should fund new liquidators selected by ASIC??

  5. Peter,
    This reporting is commendable up to your comment of 20 December, at 7:55am. Perhaps you should rephrase your query and exclude the perjorative use of ‘Serbian’ as firstly, it is inaccurate: the Arnautovic family is Croatian, who relocated for reasons most should know (or commentator Jules can elaborate).
    Secondly, such ad hominems diminish the validity of the issue raised by Shirley- the extent to which a familial relationship, assuming in this circumstance there is a communicable one between brother/s (colleagues and alleged victims) and sister (former colleague and alleged perpetrator), impacts on the proposed investigative process. I feel a reasonable view would be that the conflict and perception issues have been addressed to the satisfaction of the court, the regulator (responsible for the registration of Miss Arnautovic of Jirsch Sutherland in 2013), and the replacement appointee/s. We can be certain each obtained sufficient comfort as to the appropriate process for the affected appointments prior to the orders being requested.
    Certainly the implications of employing multiple family members is a stimulating debate where ethics is concerned, but so is the reporting of a journalist who would utilise a racial group in an inflammatory manner. Or is this the independent irreverant approach to reporting you champion?
    As for speculation, perhaps the bonds of those in the covenant of blood are actually closer than the ones of those raised at a common breast.

  6. Reporting is very commendable indeed, thank you.

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