Martie Tziotis.
The Gallic shrug, best articulated by uttering c’est la vie may have been heard in EY Sydney’s George Street HQ this week after a judge of the NSW Supreme Court decided against appointing two of the big four firm’s restructuring specialists as liquidators of Rynever Pty Ltd.
Instead, Judge Ashley Black sided with the plaintiff’s preferred nominees, which is usual practice unless respondents can show there’s an issue with the applicant’s pick.
That wasn’t the case on Monday however when certain significant shareholders of Rynever faced off against the company’s directors, who are also shareholders.
The plaintiffs, who claim they’ve been frozen out by the directors, want Worrells’ Graham Beattie and Daniel Cvitanovic installed to investigate the company’s affairs, with a specific focus on an allegedly preferential variation of lease agreement entered into by Rynever, which owns a factory complex in western Sydney valued at $15 million, and the site’s major tenant, which is also partly owned by Rynever’s directors.
The variation of lease appears to have excused the tenant from paying approximately $400,000 in rent and was entered into late last year, shortly before the plaintiff shareholders commenced proceedings to have Rynever wound up.
Shortly afterwards the directors engaged EY’s Morgan Kelly to lodge a Declaration of Solvency with ASIC which included the $15 million factory valuation.
Rynever’s directors also obtained consents to act from Kelly and colleague Martie Tziotis but given the general rule of courts siding with the plaintiff’s preference, the EY duo were always pushing it up hill, though Justice Black made it clear in his judgment delivered ex-tempore that while Kelly’s pre-appointment involvement had the potential to create an apprehension of bias, his ex-tempore findings should not be construed as a criticism in any way of the EY pair or of Kelly in particular.
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