A general purpose liquidator has been found to have had a conflict of interest because a former legal adviser to several of the companies in liquidation – offering “funeral products” – was both the spouse of a partner in the liquidator’s firm and a shareholder in a company associated with the liquidator’s practice. This information had been disclosed to creditors in the liquidator’s declaration of independence (DIRRI) when he was appointed in March 2022 although full details were subject to a confidentiality order. This conflict served to “undermine the apparent independence” of the liquidator.
Special purpose liquidators (SPL) were appointed in December 2022 to further investigate the companies. ASIC and a government creditor seeking the appointment were prepared to fund or to consider funding the SPLs. The interest of creditors was the ultimate determinant. As to costs, three law firms and four barristers were involved in making or responding to the applications.
Although the conflict undermined the apparent independence of the GPL, he was not removed, with reference made to future work that may be required by him to assist the special purpose liquidators.
