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Tuesday 25 October 2016

16-361MR ASIC accepts EU from NSW liquidator

ASIC has accepted an enforceable undertaking (EU) from Sydney-based registered liquidator, Mr Clifford John Sanderson of Dissolve Pty Ltd as Trustee for the Dissolve Unit Trust, following an ASIC review of an external administration that found he failed to adequately and properly discharge his duties as a registered liquidator.

Mr Sanderson has undertaken to:

  • engage an independent expert at his own cost to review his insolvency practice and to conduct quality reviews on three external administrations, and
  • complete 60 hours of Continuing Professional Development within 12 months including a minimum of 20 hours of CPD relating to insolvency courses provided by ARITA.

ASIC reviewed Mr Sanderson’s external administration of Nepean Refrigeration and Air Conditioning Pty Ltd (now deregistered) and found he failed to adequately discharge his duties in that he:

  • did not conduct a real property search in circumstances where the director’s report as to affairs, or the books and records provided to him, did not disclose the company’s entitlement to any real estate

  • did not undertake adequate investigations into the company’s assets (including real property, plant & equipment and debtors)

  • did not prepare, or alternatively, properly document, his assessment of his independence prior to accepting the appointment as external administrator

  • did not make requests of the company’s bookkeeper regarding the company’s financial affairs

  • did not adequately review voidable transactions, including unfair preferences and uncommercial transactions, or alternatively, failed to adequately document that review, and

  • did not make a claim against the company’s director for possible insolvent trading, despite identifying the possibility of such a claim to ASIC and creditors,, or alternatively, did not properly document his reasons for not taking such action.

ASIC Commissioner John Price said, ‘Creditors have a right to know that liquidators undertake their work independently and competently. ASIC continues to work with practitioners to improve these aspects of their practices.’ 

ASIC acknowledges Mr Sanderson’s cooperation and notes that he undertook remedial action to address ASIC’s concerns when ASIC brought the deficiencies in the discharge of his duties to his attention.