LM DIRECTORS IN FIRING LINE

Written on the 30 July 2013

LM DIRECTORS IN FIRING LINE

THE directors of LM Investment Management Ltd could be in the firing line to face charges over unspecified offences, according to administrators of the Gold Coast funds manager who have recommended the company be wound up.

Administrators John Park and Ginette Muller, of FTI Consulting, say that “various offences” occurred in the lead-up to the collapse of LMIM, the company founded by Peter Drake and which, until earlier this year, controlled investor funds totalling $750 million.

The administrators also reveal that they have found some evidence that LMIM had traded while insolvent “for a period and entered into certain transaction (sic) that may be voidable against a liquidator”.

The administrators’ report, which was sent to LMIM’s creditors on July 25, will be presented to the second meeting of creditors due to be held in Surfers Paradise this Thursday, August 1.

The administrators will be recommending to the meeting that LMIM be wound up, although they give no immediate indication the size of their potential dividend.

The administrators say a dividend is possible from a liquidation, with the book value of LMIM’s assets at $7.934 million.

“In our view, the winding up of the company is the best option for creditors,” the administrators say in a joint statement.

“If creditors resolve to wind up the company, liquidators will be appointed to realise the company’s assets for the benefit of creditors.

“This option also allows voidable transactions, insolvent trading, breaches of director duties and other offences to be investigated more thoroughly.

“If the company is wound up, creditors with guarantees from the company’s director(s) could pursue the director for those debts immediately.

“We anticipate a dividend to creditors may be distributed in liquidation, however at this stage we are unable to quantify the amount of such a dividend due to the commercially sensitive nature of the property-related assets of the company and the unknown recoveries in relation to voidable transactions.”

The administrators say in their statement that their investigations “revealed that some LMIM directors may be guilty of various offences committed prior to the appointment of the administrators”.

They do not specify their areas of concern.

Park and Muller were appointed voluntary administrators to LMIM on March 19.

They say the full creditors’ report will be made public only after this Thursday’s creditors’ meeting and after “a number of ongoing legal matters have been resolved”.


Latest News

HONG KONG FUND INVESTS $212.8 MILLION IN G8 EDUCATION

G8 EDUCATION (ASX: GEM) has secured $212.8 million from Hong Kong-based CFCG Investment Partners to pay down debt and...

MERGER DELIVERS THE FINANCIAL GOODS FOR TERRY WHITE

TERRY White Group has posted a solid half-year net profit of $1.3 million amid a period of major transformation fo...

BLUE SKY APPOINTS TWO NEW INDEPENDENT DIRECTORS

BLUE Sky Alternative Investments (ASX: BLA) has appointed two new independent, non-executive directors to its board: ...

INTEREST IN RETAIL PROPERTY SPIKES AS INTERNATIONAL BRANDS LOOK TO ROLL OUT IN AUSTRALIA

AN influx of international retail brands into Australia over the next five years are expected to push up demand for f...

Related News

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

TEST DRIVE A POST GRAD AT BOND

THERE'S only one way to really move your career into the fast lane, says Bond University, and 'test driving...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter