Breaking: Court to rule on Ten VAs independence

Ten VAs head to courtTen Network Holdings VAs will ask a judge to confirm they've satisfied their independence obligations.
Ten Network Holdings VAs off to court

Ten Group VA Mark Korda: off to court to confirm independence.

Mark Korda, Jarrod Villani and Jennifer Nettleton are due this morning to ask a Federal Court judge to determine if they were sufficiently independent when they accepted the appointment as voluntary administrators (VAs) of Ten Network Holdings and thirteen related entities on June 14, 2017.

Sources told Sydney Insolvency News over the weekend that the three KordaMentha partners will make the application in the Federal Court in Melbourne in tandem with an application to extend the time allowed to convene the second meeting of Ten’s creditors.

An originating process and affidavits were filed in the Victorian registry of the Federal Court last Thursday after creditors were briefed about the independence application, which follows a formal complaint to the Australian Restructuring, Insolvency & Turnaround Association (ARITA).

ARITA declined to comment for this story yesterday and Mark Korda said only that the application was to extend the convening period for the second meeting of creditors.

Questions around independence have dogged Korda, Villani and Nettleton since it was revealed in their Declaration of Independence, Relevant Relationships (DIRRI) that the firm generated fees of almost $1 million providing pre-appointment assistance in relation to Ten’s financial position after being engaged by Ten’s legal advisors Gilbert + Tobin in February, 2017.

Such was the consternation – among envious rivals not least – that the VAs lodged a supplementary DIRRI with Australian Securities and Investments Commission (ASIC) dated June 22. In it they explained that the first DIRRI had been prepared and printed within 24 hours of their appointment.

As such they had not had time to obtain advice in relation to possible Privacy Act, confidentiality and disclosure issues generated by TEN’s status as a company subject to the Australian Stock Exchange’s (ASX) continuous disclosure regime.

Despite issuing the supplementary DIRRI it seems someone is still pushing the VAs to confirm that they have satisfied the independence test as outlined in the the Corporations Act, the caselaw on the topic and the ARITA member’s Code of Professional Practice.

The court filing makes no mention of a contradictor who would normally be in a position to refer the judge to the relevant case law and ASIC had not responded to a request for comment at time of publication.

SiN understands that the cost of the independence application will not be charged to the creditors and that the VA’s lawyer, Leon Zwier of Arnold Bloch Leibler, has agreed to act pro bono.

Hearing the matter will be newly minted Federal Court Justice David O’Callaghan. Given the consequences that hinge on his findings on the question of the VA’s independence SiN suspects he would be unlikely to refuse the application to extend the convening period.

A finding by the judge that the VAs had not satisfied the independence criteria could make for a second meeting of creditors like no other. Ten should consider broadcasting it live.

See also: Korda’s Ten DIRRI a gameshow script

About the Author

Peter Gosnell
Insolvency News Online illuminates the practice of insolvency Australia-wide, highlighting the triumphs and travails of the nation’s registered practitioners and the accounting and legal professionals who work with them. INO is produced by Peter Gosnell, former business editor and senior business reporter at The Daily Telegraph newspaper. During a decade-long career, your correspondent reported on such notable corporate collapses as HIH, One.Tel, Westpoint and Fincorp as well as some of the nation's highest profile bankruptcies and the investigations and prosecutions arising from Australia's most notorious instances of white-collar crime.

1 Comment on "Breaking: Court to rule on Ten VAs independence"

  1. What a joke! ASIC questions the little boys club, ASIC go back to yourdog kennel and stick to your bone!

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