For some time two sets of practitioners have been tooing and frooing in respect of $20 million, claimed by one lot of liquidators in a winding up administered by another lot.
Schemes of arrangement have been proposed then abandoned. Deeds of company arrangement (DoCA) likewise, and in the absence of a resolution from either of these trusted mechanisms, litigation has volunteered its services.
As a result, Worrells’ Chris Darrin and Graeme Beattie are now battling it out in the Federal Court with Grant Thornton’s Phil Campbell-Wilson and Said Jahani.
At issue is a proof of debt claiming $20 million that Darrin and Beattie lodged in the winding up of Forward Mining Pty Ltd in their capacities as liquidators of Lottah Mining Pty Ltd.
The Grant Thornton pair, in their capacities as the liquidators of Forward Mining, have rejected the proof on the basis that it lacks sufficient supporting evidence.
The two companies are linked via various common directors, former directors and shareholders and an iron ore deposit at Rogetta in north west Tasmania.
Forward Mining held the lease. Lottah was supposedly responsible for developing the deposit.
Lottah commenced the proceedings challenging the rejection on May 17, less than two weeks before Lottah creditors approved Darin and Beattie’s entry into a funding agreement with the Commonwealth.
The FEG Recovery and Litigation Division is taking a keen interest given the more than $500,000 in employees entitlements that were to be paid via a Lottah DoCA that subsequently failed to effectuate last year, resulting in Darin and Beattie’s appointments as liquidators.
We asked Darin if the funding was for the purposes of the litigation commenced against Forward Mining and its liquidators but received no response by deadline.
In the Federal Court yesterday judge John Halley heard that Darin and Beattie, who were in default of orders made on May 17, needed more time to assemble evidence in support of their application.
As the orders being proposed were agreed by Campbell-Wilson and Beattie the judge was prepared to approve an extension, though not before delivering a lecture about the need for defaulting applicants to provide the court with explanations.
Barring a resolution the parties will return to the fray in August.
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