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14-160MR ASIC removes liquidator from industry
ASIC has cancelled the registration of liquidator, Mr Pino Fiorentino, following a successful application to the disciplinary body, the Companies Auditors and Liquidators Disciplinary Board (CALDB).
In ordering cancellation of Mr Fiorentino’s registration, the CALDB found Mr Fiorentino dishonestly used his position as the liquidator of ERB International Pty Ltd (ERB), failed to act in good faith in the best interests of the company and its creditors, lacked competence and failed to comply with his legal requirements.
Mr Fiorentino’s failures arose in circumstances where pre-appointment transactions demanded a full investigation such that ERB's creditors had confidence that he acted solely in their interests in maximising the return to them.
The CALDB found, among other things, that Mr Fiorentino signed a deed of settlement – on behalf of creditors – with ERB and its directors, without adequately and properly assessing necessary information. Also, the CALDB found that Mr Fiorentino procured invalid proxies and voted them in support of a resolution to approve his fees. Significantly, it found that Mr Fiorentino actively sought to undermine a claim by the New South Wales Office of State Revenue, a major creditor, to pursue another entity to recover its debt.
Overall, the CALDB found in favour of 20, out of 25, of ASIC's contentions.
ASIC Senior Executive Leader, Insolvency Practitioners, Adrian Brown said, ‘CALDB found that Mr Fiorentino failed to properly investigate ERB’s affairs where CALDB described pre-appointment dealings as a ‘phoenix’ transaction.
‘Liquidators are very important gatekeepers in identifying, acting on and reporting pre-appointment transactions which might seek to defeat the creditors' interests. Creditors must have confidence in the fundamental duty of liquidators to act solely in the creditors’ interests. I am also pleased that independent liquidators appointed by the court are now investigating the affairs of ERB.’
During the course of the CALDB proceedings, Mr Fiorentino made a number of unsuccessful applications to the Administrative Appeals Tribunal (AAT), the Federal Court of Australia and the Supreme Court of New South Wales. These are detailed below.
At the time of his conduct, Mr Fiorentino was a partner of Hamiltons Chartered Accountants, Business Advisors.
ASIC lodged its application with the CALDB in June 2013. Mr Fiorentino sought, and was granted, two adjournments of CALDB’s hearing of the case. On 4 February 2014, and after the CALDB refused to grant Mr Fiorentino a further adjournment, Mr Fiorentino filed an unsuccessful application in the AAT to restrain the CALDB from handing down its decision on the grounds that the Board’s refusal to grant him the adjournment had been a denial of natural justice and procedural fairness.
Mr Fiorentino then made application on similar grounds to the Federal Court of Australia. On 19 June 2014, the Federal Court of Australia dismissed Mr Fiorentino’s application. On 26 June 2014 Mr Fiorentino filed an application with the AAT for review of the CALDB’s decision to order cancellation of his registration as a liquidator, as well as an unsuccessful application to prevent the CALDB’s decision taking effect. The application for review is expected to be heard later this year.
On 7 July 2014, Mr Fiorentino made a further unsuccessful application to the Federal Court of Australia, again claiming that CALDB had denied him natural justice and procedural fairness.
In November 2013, Mr Fiorentino made application to the Supreme Court of New South Wales to have ERB reinstated. ASIC made submissions to the court that it was not appropriate for Mr Fiorentino to be appointed as liquidator should ERB be reinstated given the CALDB proceedings pending against Mr Fiorentino at that time. The court agreed with ASIC’s submissions and, in March 2014, the court reinstated ERB and new liquidators were appointed.
In April 2014, the CALDB, following an ASIC application, suspended William James Hamilton’s registration for six months for his role as joint liquidator of ERB (refer: 14-080MR).
ASIC’s recent actions against registered liquidators who failed to meet their obligations include:
cancelling the registration of Wagga Wagga liquidator, Stephen Alan Jay, at his request (refer: 14-128MR)
ASIC accepting an enforceable undertaking (EU) from Perth liquidator, Simon Roger Coad, who has agreed to improve his systems and procedures and have his practice reviewed by an independent quality reviewer (refer: 14-089MR)
suspend the registration of liquidator, Alan Godfrey Topp, for six months following an application to the CALDB (refer: 14-088MR)
cancelling the registration of Melbourne liquidator, Avitus Thomas (Tom) Fernandez, following an adverse decision by the CALDB (refer: 13-308MR)
ASIC obtaining court orders prohibiting the re-registration of Melbourne liquidator, Andrew Leonard Dunner (refer: 13-239MR)
ASIC cancelling the registration of Sydney liquidator, Mark Darren Levi, from the industry, following an adverse decision by the CALDB (refer: 13-227MR)
ASIC accepting an enforceable undertaking from Sydney liquidator, Ian Lawrence Struthers, who agreed to ASIC cancelling his registration as a liquidator for a minimum of three years (refer: 13-034MR), and
ASIC cancelling the registrations of Sydney liquidator, Peter Roger Grealish, (refer: 13-132MR), Melbourne liquidator, Paul Anthony Pattison (refer: 13-033MR), and Peter George Biazos, (bankrupted on 24 July 2013).
On 19 August 2015 the AAT dismissed Mr Fiorentino's application of 26 June 2014.