Disaffected creditors have called a meeting to try to dislodge the liquidator of failed advertising agency McCorkell and replace him with another insolvency expert.
And the current liquidator, Liam Bailey of insolvency firm O'Brien Palmer, now believes McCorkell could have been trading while insolvent for several years.
Bailey was appointed after the business of McCorkell and Associates was “sold” to a company with a similar name, McCorkell Group. Agency founder Scott Keith McCorkell is the sole director of the new company.
The price paid, $29,129.61, how this number was determined, the movement of assets to a new company and staff left without pay are the issues behind the move to replace the liquidator.
According to documents lodged with ASIC, Bailey, before he was appointed liquidator, introduced a valuer, Andrew Whittingham of Groves & Partners, to Scott Keith McCorkell to establish a price for the agency.
The North Sydney agency founded in 1992 was then wound up the week before Christmas, leaving a string of creditors, including the Australian Tax Office (ATO), and 18 staff owed wages and superannuation.
Bailey, in his latest report to creditors, says the sale has caused “significant consternation” among former employees of the company.
However, he says the transaction is one based on an independent valuation.
Bailey argues that had the transaction not occurred, then it was likely that the business would have ceased to trade, causing a significant reduction in the value of assets.
And another 41 employees would have lost their jobs.
Bailey: “The sale of business agreement was not the cause of the company’s inability to pay out owed employee entitlements upon my appointment. Rather, this was a function of the poor financial position in which the company found itself.”
Bailey is also investigating whether or not the company had been trading while insolvent, which would mean Scott Keith McCorkell, CEO founder and sole director, could be liable for debts.
The liquidator has sent a confidential report to corporate regulator ASIC.
Bailey says the “the company was likely to have been experiencing solvency issues from at least 30 June 2019”.
He writes: “If my conclusion is correct, then the director (Scott Keith McCorkell) may be liable for the entirety of the company’s debt accrued since 30 June 2019, totalling $1,133,817.47. I intend to issue a demand on the director in relation to this claim.
“A land property information search conducted in the name of the director discloses that he is the registered proprietor of real property, with a 50% share in a property located in Mosman NSW, which does not appear to have any encumbrances.
“A desktop valuation of the director’s property conducted via onthehouse.com.au indicates the property may be worth approximately $5M - $6M. At this stage, it appears that the director may have the capacity to satisfy a claim for insolvent trading, should one be established.”
The notice of meeting to put a motion replacing the liquidator includes a written consent to act as liquidator by Michael Hogan of Hogan Sprowles.
The meeting of creditors will be held from 11 am at the offices of O’Brien Palmer in Clarence Street, Sydney on Wednesday, February 15.
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