As AFSA announced, on 2 February 2024, the registration as a trustee of Mr Paul Leroy was cancelled from 5 February 2024 because he failed to maintain mandatory professional indemnity and fidelity insurance cover. The Inspector-General is now investigating the management of bankrupt estates administered by Mr Leroy. “The investigation is ongoing and further details will be provided at an appropriate time”: Trustee deregistered for failure to meet bankruptcy act standards | Australian Financial Security Authority.
Proceedings were commenced in the Federal Court against Mr Leroy on 1 February 2024.
Following asset freezing orders and orders for service of documents made up to March 2024, the proceedings have now had their fifth adjournment, to 21 February 2025.
No further information has been provided as to AFSA’s ‘ongoing investigation’.
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Peter Amos
The sentencing of former liquidator Peter Amos was on 13 September adjourned to Friday 29 November 2024.
The sort of issues raised by Amos in relation to his sentence are explained in Peter Gosnell’s Insolvency News Online: Amos tells court he was to anxious to ask creditors for cash (insolvencynewsonline.com.au).
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Paul Leroy
A case management hearing for Mr Paul Leroy in the Federal Court on 9 August did not eventuate and the hearing was then shown by the Court as being on 20 September 2024, at 9.30am.
Apparently without public notice, the hearing is now listed on 15 November 2024 at 9.30am. It may be that there are difficulties in locating Mr Leroy.
The Inspector-General in Bankruptcy is appearing by leave as amicus curiae. As much as we know from the Inspector-General, he cancelled Leroy’s registration as a trustee from 5 February 2024 because Leroy failed to maintain mandatory professional indemnity and fidelity insurance cover. The Inspector-General says he is also investigating the management of bankrupt estates administered by Leroy, that “investigation is ongoing and further details will be provided at an appropriate time”.
Then, at a speech given by the Inspector-General at the 2024 NSW Financial Counselling Conference on 11 September, he disclosed that Leroy was deregistered “17 days after his employer reported allegations of misconduct to us”.
Further details and comments follow
Mr Amos has pleaded guilty to charges under the Corporations Act involving companies to which he was appointed and from which he unlawfully transferred funds totaling close to $2.5 million. 23-347MR Former registered liquidator pleads guilty to dishonest conduct | ASIC
While such dishonesty is relatively rare among insolvency practitioners, Amos’s prosecution coincides with the apparent loss of moneys in bankrupt estates to which Mr Paul Leroy was appointed. Trustee deregistered for failure to meet bankruptcy act standards | Australian Financial Security Authority (afsa.gov.au)
A Federal Court case management hearing in proceedings seeking to recover those moneys was (apparently) next in court on Friday 9 August, as ordered by Justice O’Callaghan on 11 June 2024. Somehow that hearing did not eventuate and the case management hearing was then shown by the Court as being on 20 September 2024, at 9.30am. It is now listed on 15 November 2024.
Neither ASIC nor AFSA, nor any of the relevant industry bodies, has fully commented on how these defalcations occurred despite their regulatory powers. Nor is it clear whether the “adequate and appropriate professional indemnity insurance and the fidelity insurance” required of all insolvency practitioners will assist.
See also Insolvency practitioners and missing moneys – on-line regulation required – Murrays Legal
One Response
External administrators are gatekeepers of public policy and fiduciaries holding great powers and duties. To misappropriate moneys under their control apart from being a crime is an absolute breach of the trust under which they act and requires serious attention