1. If a company is wound up by the Court the applicant must prove the company is insolvent. The Court then appoints a liquidator who is usually nominated by the creditor. The Court may also place a company into liquidation when a dispute between shareholders or members is unable to be resolved by any other means.
2. If a company is wound up as a voluntary liquidation the members select the liquidator however in the case of a Creditors Voluntary Liquidation, creditors may nominate an alternate liquidator (although this occurs rarely).
3. A liquidator can also be appointed at the conclusions of the Voluntary Administration process by the creditors of a company. The initial appointment of the Voluntary Administrator is usually made by the directors of the company.

The liquidation process is almost identical regardless of how it is commenced.

If your company is insolvent it is your responsibility to take positive steps to prevent insolvent trading and to place your company into liquidation as soon as it is possible. If your company is insolvent and you fail to prevent your company from incurring debts by placing it into administration or liquidation you may become personally liable for the debts which your company has incurred. Learn more on insolvent trading

1. The company is insolvent and is unable to pay all of its debts.
2. The directors wish to avoid the potential of trading whilst insolvent.
3. A company’s affairs will not be fully wound up without having an independent and qualified Liquidator to undertake the process.
4. Liquidation protects creditors’, directors’ and members’ interests while the company structure is dismantled.
5. Allowing a company to simply be struck off ASIC’s corporate register provides no certainty that creditors will not re-register a company and pursue the director in the future.
6. The director of the company may have been served an ATO Directors’ Penalty Notice. If this notice is allowed to expire without appropriate steps being taken, a director may become personally liable for the company’s tax debt.
7. The company serves no purpose in going forward.
8. A group may need restructuring or reorganization.
9. To avoid possible criminal liability – stop trading before problems.
10. To bring to an end the overwhelming stress of continuing to trade

Mr Gore escaped personal bankruptcy in November 2010 after creditors, who were owed more than $480 million, voted in favour of a deal that meant they would be repaid just $3m, in what was understood to be Australia’s largest insolvency case.

But yesterday creditors voted for the personal insolvency agreement to be scrapped after the $83,000 payment was missed this month.

It is understood Mr Gore’s consultancy agreement to supply his services to MOGS, a company of which his Swedish wife, Marina, and his business colleague Graeme Stonehouse are directors, was terminated this week.

About 10 people attended yesterday’s Sydney meeting.

Anthony Warner of CRS Warner Kugel, who is the trustee of Mr Gore’s former estate, said a representative from the Australian Taxation Office indicated the ATO would be applying to the court to have Mr Gore declared bankrupt.

The personal insolvency deal struck in November 2010 was to result in Mr Gore’s 90-plus creditors being paid back little more than 6c in the dollar over three years and securing a 30 per cent stake in one of his businesses.

Mr Gore, who featured on the BRW Rich List three years ago with a fortune of $183m, was previously declared bankrupt in the 1990s but it was later annulled.

The Australian

The ATO flagged its intentions yesterday after Mr Gore’s creditors voted overwhelmingly to terminate his personal insolvency agreement to repay a fraction of the $495 million he owed.

Mr Gore’s trustee, accountant Anthony Warner, of insolvency firm CRS Warner Kugel, determined this month that Mr Gore had defaulted on a deal struck in late 2010.

Under that agreement, Mr Gore was required to repay just $3.3 million and deposit 30 per cent of any profits into a trust.

Some of Mr Gore’s biggest creditors, including the Mayfair Group and Trilogy Funds Management, had strongly pushed for Mr Gore to be bankrupted because it would give greater investigative powers to a trustee.

Mr Gore, who was bankrupt in the 1990s, said he had launched Federal Court action to challenge Mayfair’s $152 million debt claim. The next hearing in the matter has been set down for May 9.

“It is my opinion that the matters before the court ought to have been heard prior to any (creditors’) meeting taking place,” Mr Gore said.

But Mayfair chairman Shane Stone said yesterday Mr Gore’s challenge had no basis in fact or law.

He said a bankruptcy trustee could dig deeper in to Mr Gore’s business affairs and search for possible hidden assets.

”There’s more to be done on Gore and his accomplices,” Mr Stone said. ”We’d like to know where the money went. We would like to really understand just what went on.”

The Courier-Mail

GOLD Coast businessman Craig Gore failed in his legal bid yesterday to oust the new trustee overseeing his personal insolvency agreement.

Justice John Logan ruled in Brisbane Federal Court that Mr Gore had no prima facie case against accountant Anthony Warner and he dismissed the application.

Mr Gore, who was ordered to pay costs, alleged that Mr Warner was not fit for the job because of perceived conflicts.

An overwhelming number of Mr Gore’s creditors, who are owed $495 million, voted to appoint Mr Warner after they removed original trustee Max Prentice on December 23.

They had expressed frustration with the way Mr Prentice was overseeing the Part X agreement, which requires Mr Gore repay just $3.3 million and 30 per cent of any profits in a trust over three years.

Mr Prentice defended his work despite only making a few payments to select creditors just days before he was removed and no money went to the trust.

Creditors want a rigorous probe of Mr Gore’s business activities and sources of income.

That work is expected to include a public examination later this year.

Mr Gore, who recently hosted a lavish party at Sanctuary Cove with his new wife, has denied having hidden assets.

He alleged Mr Warner was conflicted in part because his business partner, Steven Kugel, was a liquidator of Mr Gore’s firm Secured Capital & Finance.

Mr Kugel wrote in a report to creditors in 2010 that he believed the company had operated as “something akin to a Ponzi scheme”.

Mr Gore, who angrily denied that allegation, did not return calls yesterday.

The Courier-Mail

The Federal Court yesterday rejected Mr Gore’s application to restrain Mr Warner from acting as trustee.

Mr Gore had sought Mr Warner’s removal just hours after creditors appointed him on December 23 to oversee Mr Gore’s record-breaking $495 million personal insolvency agreement.

The Federal Court yesterday rejected Mr Gore’s application to restrain Mr Warner.

Mr Gore’s creditors — including the Australian Taxation Office, Mayfair Group and former close friend Kevin Kalkhoven — sought Mr Warner’s appointment after questioning oversight of the insolvency agreement by former trustee Max Prentice, of BPS Recovery.

While Mr Gore said he welcomed a new trustee, he argued that Mr Warner, of CRS Warner Kugel, was “conflicted”.

Last year, CRS Warner Kugel partner Steven Kugel took a hard line in his examination of failed Gore company Secured Capital & Finance Pty Ltd, describing its operation as “akin to a Ponzi scheme”.

In his affidavit to the Federal Court on December 23, Mr Gore sought the appointment of Nicholas Crouch, of Crouch Amirbeaggi, as an alternative trustee.

This also was rejected.

Despite the rebuff, Mr Gore claimed yesterday’s ruling as a “success”.

“In my view Mr Warner is on notice to perform in the best interest of creditors,” he said.

In another blast for major creditor Mayfair, Mr Gore said his former UK backer wanted to bankrupt him ahead of a court hearing later this month in which he is challenging Mayfair’s status as a creditor with debts of $152 million.

Mr Gore said Mayfair did not want this month’s hearing to proceed and that it would find a way to delay it.

“The only way to stop the action is to have me bankrupted,” he said.

“I don’t believe they ever want to take it to court.

“Shane Stone (Mayfair’s chairman) will never want to take the witness box.”

But Mr Stone yesterday laughed off the suggestion.

“He clearly doesn’t understand or know me,” the former Northern Territory chief minister said.

“Mayfair will never lie down on that issue and no executive of Mayfair will have any hesitation in being prepared to give evidence on oath.”

— Nick Nichols, Business Editor

Ariff’s lack of contrition counted against him when Judge James Bennett imposed a non-parole period of three years and six months from his September conviction.

Parole authorities will decide in March 2015 whether Ariff will be released under supervision for the remaining two years and six months.

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Judge Bennett said he agreed with a submission from the Australian Securities and Investments Commission that a ‘’significant” sentencing factor was general deterrence.

Ariff was ”well aware” of the community’s expectations of his ”role and status” as a liquidator whereby he had control of the assets and responsibility for the conversion of cash, the payment of creditors and the distribution to members, the judge said.

He found that Ariff was motivated primarily by a desire to save his struggling practice, Stuart Ariff Insolvency Administrators, from collapse.

It would have been obvious that ”the only course he should have considered” was to seek independent advice on whether the firm could survive, Judge Bennett said.

His clean record was of little weight because he was able to perpetrate his crimes through his reputation for integrity.

Judge Bennett read from a pre-sentence report containing Ariff’s comments to a prison doctor.

In it he criticised the jury and blamed employees for the transfer of funds from the bank accounts of a Newcastle family company, HR Cook Investments, 13 times, and the falsification of six forms lodged with ASIC.

”He feels that the jury didn’t examine the evidence in detail,” the report said, noting the deliberation took only four hours after a six-week trial.

Ariff said to the doctor: ”At the end of the day it was under my watch and I take the blame for that but I don’t take responsibility for the carrying out of the specific transactions and the preparing of the documents.”

Asked if he blamed someone else, he said: ”Yes, and that person was the prime witness for the DPP.”

The Commonwealth Director of Public Prosecutions gave an indemnity from prosecution to the manager Ariff assigned to the HR Cook liquidation, Tina Battye.

Judge Bennett said there was ”glaring and irrefutable” evidence that ”the offender and his company were the intended beneficiaries” of the crimes.

”I reject the proposition that the offender was not the principal in all that occurred,” he said.

Even if others had participated, the judge said he rejected the notion that he did not know what was happening.

He took into account Ariff’s age of 48 and that a life ban from the insolvency profession would make it difficult for him to find a job when he left prison.

The stress on his family and his mother’s ill health were also mitigating factors.

by Elisabeth Sexton

Giving reasons for revoking Ariff’s bail, Judge James Bennett, SC, said the prosecution had presented a ”formidable” case.

”The allegations are serious allegations and upon the material that I have before me, it would seem inevitable that the offender will suffer a period of incarceration,” Judge Bennett said.

A sentencing hearing has been listed in November.

Ariff, 48, took $1.18 million in 13 transactions between 2006 and 2008 from a company he was winding up, HR Cook Investments Pty Ltd.

More than $700,000 went to pay legal bills for other companies where he was liquidator, almost $400,000 went into the bank account of his practice, Stuart Ariff Insolvency Administrators, and $50,000 went to his mother, Barbara Ariff.

Susan Shedden, whose parents set up HR Cook in 1960 as a family investment company, said she was ”absolutely on top of the world” at the outcome of the four-week trial.

Trish McDonald, SC, for the Australian Securities and Investments Commission, successfully applied for Ariff to be taken into custody immediately after the jury delivered 19 guilty verdicts.

Thirteen of Ariff’s offences, for transferring funds from HR Cook with intent to defraud, carried a maximum penalty of 10 years’ jail each, Ms McDonald said.

”It will be the Crown’s submission that a period of full-time imprisonment is the only sentence that would be available to your Honour in the circumstances,” she said.

The other six offences, of falsifying HR Cook’s accounts, carry a maximum fine of $22,000 or imprisonment for five years or both.

ASIC charged Ariff in August last year, three years after a consultant’s report commissioned by aggrieved creditors of a company under his control concluded he ”knowingly and deliberately made claims for items which were not appropriate or did not actually exist”.

The regulator brought civil proceedings in the NSW Supreme Court in 2009, which led to Ariff’s ban from the insolvency profession for life, and an order that he pay $4.9 million in compensation to creditors of 16 companies where he was liquidator or administrator. He became bankrupt two months later without paying the compensation.

The judge who banned him, Justice Patricia Bergin, noted that a liquidator was an officer of the court and described his conduct as ”quite appalling”.

HR Cook, one of the 16 companies in the Supreme Court case, was put into liquidation voluntarily in 2006 by Ms Shedden, her mother Joan Cook and a trustee for her niece and nephew.

Ariff’s task was to distribute the proceeds of a $3.2 million share sale, sell two investment units and pay capital gains tax.

Ms Shedden, who gave evidence of threatening to replace Ariff as liquidator in 2009, and her mother received their full entitlements from HR Cook, but tax of $612,000 was never paid and her niece and nephew did not receive dividends of $584,000

Elisabeth Sexton