A total of 15 businesses in the process of being wound up have been assigned new liquidators after their incumbent was deregistered for falling into bankruptcy himself – reportedly due to a tax debt.
Under the Corporations Act, a registered liquidator cannot be insolvent under administration. Doing so automatically cancels a liquidator’s registration.
That was the case for Cairns man Justin James Cadman, who had operated an accounting and insolvency business within Mclaren Knight, and later Mclaren Knight International.
Mr Cadman had been registered to operate as a liquidator since August 2005, but with Mclaren Knight in liquidation, Mr Cadman’s registration was formally revoked after he was declared bankrupt this month by the Federal Circuit Court.
“ASIC has moved quickly to exercise the new powers under the insolvency regime to appoint a replacement liquidator," ASIC commissioner John Price said.
Mr Cadman was involved in 15 active administrations when his registration was cancelled. ASIC has appointed Moira Carter of BRI Ferrier NQ and Todd Kelly of BDO (Nth QLD) as replacement liquidators.
Despite being in liquidation, the Mclaren Knight website remains live, although the listed phone number has been disconnected and emails were not returned.
Media reports from 2017 suggest that the firm was forced to call in the liquidators on itself in 2017, after being unable to repay a substantial tax debt.
The ATO declined to comment on the case.
However, in a publicly available notice on ASIC’s website, the deputy commissioner of taxation was cited as the plaintiff in an application to wind up Mclaren Knight in December 2016. The business fell into liquidation in May 2017.
The case comes as the ATO is subject to an inquiry into its use of garnishee notices to SMEs.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.