Communications regarding the external administration of BBY Limited and related companies.
Communications regarding the external administration of BBY Limited and related companies.
There are various classes of former clients and creditors of BBY who have suffered losses as a result of the collapse of BBY in 2015. To the extent funds and assets were held in trust by BBY on behalf of clients the net proceeds will be available for distribution to clients as beneficiaries. General creditors however are not entitled to be paid from these funds.
Creditor claims in respect of BBYH, BBYL, BBYAS and BSA were estimated to exceed $40 million. These claims include secured creditor shortfalls, trade creditors, employees and clients to the extent of shortfalls against trust assets. Whilst clients will recover a portion of their trust entitlements, there was no prospect of any return to creditors generally, except from possible net recoveries that may result from potential causes of action that have been pursued by the Liquidators. These have been discussed in previous updates.
In 2018 we commenced legal action to recover $2.5 million in payments made by BBY during 2014 to GARF Pty Ltd, the corporate trustee of Glenn Rosewall’s superannuation fund. This and other claims against Glenn Rosewall and a company associated with Ken Rosewall were in respect of related party loan repayments around the time of the Aquila Resources Limited transaction in June 2014 when BBY was insolvent and there were shortfalls in client trust funds. The Aquila transaction is discussed in previous reports to creditors.
In late 2018 Glenn Rosewall’s superannuation fund was closed and funds were moved to a new account. Glenn Rosewall was made bankrupt on 12 March 2019, shortly before we obtained judgement in respect of the $2.5 million. His bankruptcy trustee is Adam Shepard of Setter Shepard. Generally superannuation funds are protected and not available to creditors in a bankruptcy, with some exceptions, which we explored. We petitioned the Supreme Court to wind up GARF Pty Ltd and on 1 August 2019 the Court appointed John McInerney and Philip Campbell-Wilson of Grant Thornton as liquidators. In September 2019 however the funds were transferred again and the new superannuation account was closed. We received and considered a report from the liquidators of GARF Pty Ltd. There were no available assets in the liquidation and they did not have any funding to mee their expenses. We contemplated funding the Liquidators of GARF Pty Ltd to seek freezing orders to secure the funds whilst a claim was pursued however this would have involved significant legal challenges, uncertainty and expense. The superannuation funds had also allegedly been spent. We therefore concluded that we would not pursue this matter further.
In 2018 we commenced legal action to recover $3.3 million in payments around the time of the 2014 Aquila transaction from BBY Limited to Ficema Pty Ltd, a company associated with Ken Rosewall, on the basis that the BBY was insolvent at the time of the payments and that they were voidable. Our claim is being strenuously defended. The matter is scheduled for trial in the Supreme Court commencing on 8 September 2020.
In 2018 we issued a statement of claim against the former auditor of BBY in respect of losses and damages in relation to the conduct of audits of BBY. A claim of this nature fell within the scope of the secured charge held by St George Bank and it was entitled to a right of priority in respect of any recovery ahead of unsecured creditors. The auditor did not admit any liability and defended our claim. It also claimed it was not liable for any damages above relevant professional standards legislation and contractual caps that generally limit auditor liability. In May 2020 we held a formal mediation and agreed to settle our claim on the basis of a payment by the auditor. We cannot disclose the amount as the terms of settlement are confidential. Proceeds, net of costs were paid to the secured creditor.
9 April 2020: General update on BBY liquidation
We have published an update in relation to client monies under Client Monies: Court Directions Proceedings.
We have completed a range of recovery actions including settlement of our insolvent trading claim against the directors and recovery of funds from a number of parties in respect to a range of voidable preferential payments. The insolvent trading recoveries have been applied against unpaid winding up costs in the liquidations of BBY Limited, BBY Holdings Pty Ltd and Broker Services Australia Pty Ltd in accordance with Court orders.
During the course of these actions, Mr Glenn Rosewall declared himself bankrupt and an associated company, which acted as the corporate trustee of his superannuation fund, has been placed into liquidation. Recovery actions are continuing in respect these matters.
We are continuing a recovery action in respect of claims against Ficema Pty Ltd, a company associated with Mr Ken Rosewall. This matter is scheduled to be heard by the Court in September 2020.
We filed a statement of claim against the former auditor of BBY in respect of losses and damages in relation to the conduct of audits of BBY. The Court ordered that the parties attend a mediation regarding our claim. The matter is next before the Court for directions in May 2020.
We shall report to creditors in more detail on the conduct of the BBY liquidations later this year.
10 September 2019: Court application regarding distribution of recoveries
The liquidators of BBY Limited (BBYL), BBY Holdings Pty Ltd (BBYH) and Broker Services Australia Pty Ltd (BSA) have made an application to the Supreme Court for directions as to how the liquidators should; distribute net proceeds recovered in respect to the insolvent trading claim the liquidators have pursued against Glenn Rosewall, Ken Rosewall and David Perkins in the windings up of BBYL, BBYH and BSA; and allocate the remuneration and expenses which have been incurred by the liquidators in pursuing that claim, amongst these insolvent estates.
The liquidators' application for directions is listed for final hearing on 23 September 2019 before Justice Rees in the Supreme Court of New South Wales. Read the notice (PDF 67KB) with information about what you need to do if you wish to participate or seek further information. This notice has been sent to all former clients and other creditors. You do not need to take any action or participate in these Court proceedings if you do not wish to.
3 July 2019: Notice of termination of client agreement: BBY Online Trader – Saxo Capital Markets
On 26 November 2018 the Court ordered that the Liquidators are entitled to sell the securities held on the Saxo online trading platform upon termination of the Online Account Terms applicable to the "BBY Online Trader" product offering (the Agreement). Saxo clients with a Saxo position claims will have received a circular from KPMG advising them of the termination of the Agreement (PDF 113KB). Should you have any questions regarding this notice, please contact us.
21 September 2018: BBY Liquidators' Third Annual Report
We have published our latest annual report to creditors (PDF 827KB) on the BBY creditor information website. This report provides a summary of key events during the previous year, the current status and next steps in the winding up of the insolvent estates of the above companies. It should be read in conjunction with our previous reports, dated 9 September 2016 (PDF 632KB) and 21 September 2017 (PDF 941KB).
30 June 2018: KordaMentha appointed Receivers and ManagersOn 30 June 2018, Martin Madden and Cassandra Mathews, both of KordaMentha, were appointed by Westpac as Receivers and Managers of BBY Ltd (In Liquidation)(Receivers and Managers Appointed), BBY Holdings Pty Ltd (In Liquidation)(Receivers and Managers Appointed) and BBY Advisory Services Pty Ltd (In Liquidation)(Receivers and Managers Appointed). The appointments were made jointly and severally with Stephen Parbery and Mark Robinson, the other Receivers and Managers of those companies at that time.
On 31 July 2018 Stephen Parbery and Mark Robinson retired as Receivers and Managers, with the appointment of Martin Madden and Cassandra Mathews as Receivers and Managers continuing and unaffected by that retirement.
For any future Receivers and Managers queries please direct to KordaMentha at www.kordamentha.com/contact
18 December 2017: BBY Nominees Liquidators' Second Annual Report
Each year during the winding up of a company, liquidators are required to convene an annual meeting of creditors (or lodge an annual report with ASIC), providing an account of the conduct of the winding up. This is the second annual report by the Liquidators to the former clients and creditors of BBY Nominees and accompanies notice of a meeting of creditors to be held on 5 January 2018.
21 September 2017: BBY Liquidators' Second Annual Report
Each year during the winding up of a company liquidators are required to either convene an annual meeting of creditors or lodge an annual report with ASIC, providing notice to creditors. We have elected to lodge this second annual report with ASIC and publish a copy on the BBY creditor information on the BBY website. We have sent notification to approximately 6,000 former clients of BBY by email and to 400 possible creditors by post. This report provides an update on and should be read in conjunction with our previous report, dated 9 September 2016.
25 May 2017
Client monies Court directions proceedings
Clients are reminded that monies in the CSAs and other client related recoveries cannot be distributed until the Court has made its final determination. At this stage clients do not need to take any further action and we do not require further documentation from clients.
‘Erroneous Deposit’ clients
The Liquidators have distributed funds to those clients that had made Erroneous Deposits (received by BBYL after the date of administration, which were made for a purpose which failed, for example in anticipation of future trading that did not occur).
‘Erroneous Withdrawal’ (EW) clients
We refer to our update of 22 November 2016 on proposed distributions on Erroneous Withdrawals (margin calls made on 19 May 2015 in respect of Exchange Traded Options where BBYL did not settle its margin obligation with ASX Clear). These distributions have not yet been paid as a consequence of objections from certain representative defendants in the court proceedings, in light of a potential application to costs of the proceedings among the various classes of clients funds before distributions are made. We shall provide further updates on resolution of this matter.
Equities and ETO clients – Property Entrusted Claims
On 23 May 2017, the Securities Exchanges Guarantee Corporation (SEGC) issued a circular inviting Equity and ETO clients of BBY Limited who might be eligible to claim compensation from the National Guarantee Fund (NGF) to lodge a claim. Clients should contact the SEGC directly on +61 2 8216 0231 or email firstname.lastname@example.org should you wish to lodge a claim.
25 November 2016: BBY Nominees Liquidators' Annual Report
Each year during the winding up of a company, liquidators are required to convene an annual meeting of creditors (or lodge an annual report with ASIC), providing an account of the conduct of the winding up. This is the first annual report by the Liquidators to the former clients and creditors of BBY Nominees and accompanies notice of a meeting of creditors to be held on 15 December 2016.
9 September 2016: Liquidators' Annual Report
Each year during the winding up of a company liquidators, are required to either convene an annual meeting of creditors or lodge an annual report with ASIC, providing notice to creditors. Given the lack of funds in the liquidations to meet costs of holding a meeting for so many clients and creditors, we have elected to lodge this report with ASIC and publish a copy on the BBY creditor information website. Notification will be sent by email to approximately 30,000 former clients of BBY and by post to 400 possible creditors.
|03/07/2019||BBY Circular to clients: Notice of termination of client agreement: BBY Online Trader – Saxo Capital Markets (PDF 113KB)|
|23/05/2019||BBY Circular to clients: Notice to submit client claims (PDF 61KB)|
|21/09/2018||BBY Liquidators' Third Annual Report (PDF 827KB)|
|18/12/2017||BBY Nominees Liquidators' Second Annual Report (PDF 415KB)|
|21/09/2017||BBY Liquidators' Second Annual Report (PDF 941KB)|
|23/05/2017||SEGC Circular to Equities & ETO clients: Property Entrusted Claims (PDF 510KB)|
|25/11/2016||BBY Nominees Liquidators' Annual Report (PDF 632KB)|
|22/11/2016||BBY Limited Circular to Clients (PDF 127KB)|
|17/10/2016||BBY Nominees Circular to clients (PDF 133KB)|
|22/12/2015||BBY Client Monies Investigation Report and supporting documents|
|06/11/2015||Notice to Creditors – Court Directions regarding Client Monies (PDF 90KB)|
|08/10/2015||BBY Nominees: Second Meeting of Creditors Presentation (PDF 1.248MB)|
|02/10/2015||BBY Nominees Circular to clients (PDF 71KB)|
|29/09/2015||BBY Nominees 439A Report to Creditors (PDF 1.05MB)|
|15/09/2015||Notice to Clients: End of year holdings and statements (PDF 53KB)|
|09/09/2016||BBY Liquidators' Annual Report (PDF 1.03MB)|
|22/06/2015||Market Update: BBY Group Administrations (PDF 103KB)|
|22/06/2015||BBY Group: Second Meeting of Creditors Presentation (PDF 1.38MB)|
|18/06/2015||Market Update: BBY Group Administrations (PDF 110KB)|
|12/06/2015||Circular to creditors and notice of meeting (PDF 112KB)|
|12/06/2015||Administrators' report to creditors (PDF 3.2MB)|
|27/05/2015||BBY Group: First Meeting of Creditors Presentation (PDF 154KB)|
|27/05/2015||Declaration of Independence, Relevant Relationships and Indemnities (PDF 117KB)|
|20/05/2015||Circular: Appointment of Administrators and Meeting of Creditors (PDF 473KB)|
|20/05/2015||Notice to Creditors (PDF 473KB)|