Secondary liquidator not protection for lead appointee

PE Capital
Lowe Lippmann partner Gideon Rathner.
PE Capital
Lowe Lippmann director Matt Sweeney.

Insinuations about why PE Capital Nominees (Nominees) liquidator Matthew Sweeny presented for cross-examination this week have attracted a vigorous rebuttal from the Lowe Lippmann director’s counsel.

“There were many propositions put to him by Mr Bick that he seemed reluctant to embrace.” Justice Tim McEvoy.

In the Federal Court yesterday Ian Martindale KC for Nominees’ liquidators told Federal Court judge Tim McEvoy that it had in no way been a “forensic decision” by his clients for Sweeny to volunteer for cross examination by Peter Bick KC, counsel for Runner Investment Holdings Ltd (Runner) which is one of several lenders locked in a costly legal stoush for control of a parcel of land in Victoria that formed part of the assets of failed developer PE Capital Funds Management Limited.

Martindale was responding to insinuations from the bar table made earlier this week by Bick that Sweeny had appeared because he had been away for at least six weeks after he and Rathner were appointed by court order in August 2021 and due to an issue in his personal life at the time the pre-appointment meeting was held, his capacity to respond to inquiries would have inevitably been limited.

“Mr Sweeny had a very good reason for not having a good recollection of what occurred at the pre-appointment meeting,” Martindale KC said. “He plainly wasn’t obfuscating,” he told the judge.

“There were many propositions put to him by Mr Bick that he seemed reluctant to embrace,” the judge said in response.

Martindale however persisted, saying it was wrong for Bick to imply that Sweeny had been put forward to shield Rathner who is the lead appointee.

The defence of Sweeny and Rathner came yesterday on day three of the hearing of proceedings commenced last year by the liquidators, who are seeking to have a transfer of land from the trust to which Nominees was trustee to another entity reversed.

The pair commenced proceedings so they could possess and then realise the asset but that process has been complicated by the actions of the various secured creditors, including Runner, which is both a defendant and a cross-claimant in related proceedings.

The court also heard on multiple occasions that the liquidators had not acted impartially and that they should’ve sought the court’s advice on whether the could have disclaimed the asset so as to let the rival lenders slug it out.

Counsel for various parties who are listed as defendants and cross claimants alleged that the liquidators were favouring the interests of Mt Duneed Investments Pty Ltd, which is not only one of the lenders fighting for the right to control the land but is also funding the liquidator’s legal expenses and professional fees.

Obviously in such circumstances, an allegation of partiality is guaranteed but none of Mt Dundee’s rivals presented to the court any evidence more convincing than the mere assertion that liquidators are inevitably in their funders’ pockets.

We asked Rathner and Sweeny to respond to the allegations but received no reply by deadline. Judgement is reserved.

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