Trustee to fight IGB suspension bid

Before departing the jurisdiction in late 2023 with millions of stolen creditor funds fugitive ex-trustee Paul Leroy was briefly employed by Domenic Calabretta’s mid-tier Mackay Goodwin.

Leroy wasn’t there long and didn’t much attend Mackay Goodwin’s Bridge Street HQ.

Time was short and there was much to be done. Money transferred offshore, excuses proffered for not providing Mackay Goodwin staff with the information they were constantly requesting and travel arrangements finalised.

When at last Calabretta and his colleagues decided that some of those excuses should be independently corroborated the jig was up.

In early January 2024 AFSA was informed that Mackay Goodwin’s new recruit had serious questions to answer and wasn’t contactable.

Within weeks AFSA had cancelled Leroy’s registration as a trustee on the basis that he had no professional indemnity insurance, though according to charges recorded on his AMEX the former Honorary Consul of Belgium (NSW) was by this time eyeballs deep in the fleshpots of Paris.

If anybody was as outraged as the creditors of the estates Leroy had looted it was Inspector General in Bankruptcy (IGB) Tim Beresford and he wasn’t going to be satisfied with cancelling the registration of a trustee who’d committed the most flagrant breaches of trust imaginable on his watch.

Leroy’s audacious pilfering is the used prophylactic stuck to Beresford’s otherwise immaculate resume.

So it may not surprise to read that according iNO’s sources Beresford is of the view that 99.9 per cent of his regulatory ire should be reserved for bankruptcy trustees, of whom perhaps 0.0001 per cent do the wrong thing.

Bankrupts, those people who got themselves into trouble in the first place? They’re entitled to all the sympathy he can conjure, regardless of how greedy, venal or crooked.

So having done all he can in respect of Leroy, at least until the fugitive is brought back to Australia, Beresford late last year turned his attention to Mackay Goodwin and its head of personal insolvency Gavin King.

A week before Christmas the IGB filed in the Victorian Registry of the Federal Court proceedings naming King as primary respondent. The allegations are serious.

Beresford alleges that King:

• transferred estates from Leroy to himself without following proper process;
• provided misleading information to the Inspector-General in Bankruptcy, the Federal Court, National Australia Bank and creditors;
• failed to keep proper records and notify creditors of conflicts;
• made or signed documents that were false or misleading;
• failed to ensure communications were accurate and complete;
• breached duties by profiting from estates;
• and failed to act honestly and impartially.

Beresford wants King’s registration as a trustee suspended for an unspecified period. Failing that he wants an independent supervisory trustee appointed.

We asked AFSA how many estates could be affected if King is suspended and whether the Official Trustee would administer those estates itself or farm them out to private trustees.

No response by deadline was received but if Beresford thought the object of his ire would meekly acquiesce, King yesterday assured iNO he would not be capitulating.

“We dispute all allegations and will vigorously defend the claims being made,” King said in a one sentence email sent in response to iNO’s enquiries.

No first directions hearing date has been set down for the matter but Beresford had already commenced a separate proceeding against Leroy in which Mackay Goodwin is also a respondent.

Those proceedings, which are due to be first heard in March, include an application for orders requiring Mackay Goodwin to “account for all remuneration approved and/or received by Leroy, Mackay Goodwin, or its agents in connection with the relevant bankrupt estates or property” and an order requiring Leroy and/or Mackay Goodwin to repay that remuneration to the bankrupt estates Leroy looted and to an individual whose bankruptcy was annulled.

Beresford may think he’s got Mackay Goodwin and King bookended with this pincer movement but only time will tell if the bankruptcy boss put some gloss on the embarrassing record regulators who take insolvency practitioners to court in this country have earned.