OPINION PIECE

When I was in business in Inverell, I frequently saw cases where companies collapsed leaving creditors out of pocket, but the liquidator walked away with a big fat cheque.

 In recent months I have been dealing with people in Sydney and Adelaide who have had their lives turned upside down by unscrupulous liquidators and administrators, and that prompted me to seek a Senate inquiry into their practices and the role of ASIC. The Insolvency Practitioners Association said an inquiry wasn't needed, yet shortly after that statement a Sydney liquidator was banned for two years. The inquiry will be conducted by the Economics Committee and just over 60 submissions were received. Submission 61 from Armidale Dumaresq Council is a prime example of how the actions of liquidators and administrators are not properly scrutinised. The YCW Leagues Club at Armidale had called in a Newcastle insolvency practitioner because of the club's financial situation, and things went downhill from there. Media reports allege fees of $916,000 were charged ( the club's debt had only been $540,000), the club's poker machines were sold off, local tradesman and suppliers were not paid, and at least one club employee is still chasing entitlements for $60,000. This happened right under the nose of ASIC, a point made by the Council in its submission. Another submission to the inquiry alleges its administration cost $11 million, yet its deficiency was just $4.5 million. Again according to the document, ASIC reacted all too slowly. It is interesting that I have been told by people within the insolvency and legal professions that this inquiry is overdue to weed out the bad practices and tighten regulations to stop people being ripped off. At the moment it appears too easy, despite claims to the contrary. The submissions can be viewed at http://www.aph.gov.au/Senate/committee/economics_ctte/liquidators_09/submissions.htm