Unique leave gives creditors second bite at PIA

Personal Insolvency Agreements (PIA) have blazed into the public’s consciousness in recent times thanks to spivs like Jon Adgemis trying to cajole creditors into swallowing brazenly unsatisfactory returns and to the Inspector General in Bankruptcy (IGB) Tim Beresford, who’s taken to guillotining these affronts to commercial morality whenever he can.

“Upon the expiration of the authority no further action can be taken by the controlling trustee until another authority is provided. However, s 188(4) of the Bankruptcy Act provides that a debtor cannot give a further authority within 6 months of giving an earlier one, which gives rise to the need for the present application for leave.” Justice Stephen Burley.

Adgemis’ effort to evade bankruptcy via a PIA were brought undone when Beresford intervened directly in a meeting being run by Adgemis’s former controlling trustee Scott Pascoe and Ben Ho and then teaming up with the ATO to force sequestration before Adgemis could file his debtor’s petition.

Just as dramatically, Beresford decapitated the PIA force fed to creditors of Gold Coast lawyer Beau Hartnett by initiating unprecedented legal proceedings to have the odiously ungenerous proposal set aside.

But not all PIAs labour under this accretion of notoriety, even when the outcome of the associated litigation is labelled as unprecedented.

In Secover Pty Ltd v Graham, in the matter of Graham [2026] FCA 260 we have what Piper Alderman lawyer Cristian Sotelo claims is the first successful application under section 188(4) of the Bankruptcy Act for leave to appoint a controlling trustee for a second time within a six-month period.

The application was brought by debtors Bryce Graham and Lachlan Graham in circumstances where their PIA had failed to get the necessary 75 per cent support at a meeting of creditors called by their controlling trustee Bruce Gleeson of Jones Partners.

Gleeson had been appointed controlling trustee two days before the scheduled hearing of a creditors petition brought by Secover Pty Ltd and the failure of the PIA to get up at the October 29, 2025 meeting meant the Graham brothers had to act fast, as explained by Federal Court judge Stephen Burley.

“On 17 December 2025 the debtors filed the present interlocutory application. The reason for it arises because the debtors wish to present an amended personal insolvency agreement for consideration by their creditors.

“By operation of s 189(1A)(d) of the Bankruptcy Act, the control of the debtor’s affairs ceases four months after the authority became effective. As the initial authority became effective on 16 September 2025, the authority was due to expire on 16 January 2025.

“Upon the expiration of the authority no further action can be taken by the controlling trustee until another authority is provided.

However, s 188(4) of the Bankruptcy Act provides that a debtor cannot give a further authority within 6 months of giving an earlier one, which gives rise to the need for the present application for leave,” the judge said.

Adding a certain urgency to the matter was the assumption, incorrectly indulged by all parties according to his honour, that the stay placed on the creditors petition hearing at the time Gleeson was appointed remained in place.

” …. it would appear from the language of s 189AAA(1) of the Bankruptcy Act that the stay that commences with the appointment of a controlling trustee ceases upon the earlier of the adjournment or conclusion of a creditors meeting”.