by Greg Bright
The liquidator to van Eyk Research appears to have done a good-enough job to date, for a healthy fee of course, but creditors will only get some money if various legal actions are successful, according to the latest report from Pitcher Partners.
The demise of van Eyk Research (the dominant advisory and research house for the financial planning sector for many years) in 2014, has been the subject of much industry discussion, as well as litigation, and its drawn-out liquidation process is now also attracting industry attention.
One small victory for creditors has been over the Australian Taxation Office. According to a report by Pitcher Partners, the liquidator, sent to creditors last week, the “transactions which may have been preferential in nature” included a demand from the ATO for $91,500. This has been settled at $55,000.
Elsewhere in the report, signed by liquidator Geoffrey Trent Hancock of Pitcher Partners, there was not much joy for creditors, but at least employees have been mostly covered. Under the ‘Fair Entitlement Guarantee’, which is the government system designed to protect employees during an external administration of a company, the liquidator has distributed $390,825 to a total of 19 employees. The executive director and largest shareholder, Mark Thomas, (including interests associated with him) has not received anything.
Pitcher Partners, which has been paid $730,000 to date, at an average-hourly wage of $435 for at least 12 staff and partners, is still trying to recover $375,538 from debtors. However, its main recovery possibilities involve ongoing litigation. So far the liquidator has realised only $459,455 of $928,900 it believes it has in “debtor value”. Asset sales to date have totalled a little over $1 million.
With a current balance of just $2,639 for its “receipts and payments” calculations shown to creditors, the report to creditors says: “Any future recoveries in this matter are subject to litigation that is currently in the courts. Accordingly, it is not practicable to state whether or not there will be a dividend available to unsecured creditors.”
Most of the money recovered by the liquidator is an undisclosed sum from Lonsec Fiscal which purchased the former van Eyk financial planner database and technology platform known as iRate. It would appear from the liquidator’s statements that Lonsec paid less than $500,000 for iRate.
Pitcher Partners was called in as voluntary administrator to van Eyk Research on September 15, 2014 and then appointed liquidator on October 21, 2014 following the freezing of van Eyk funds management accounts known as Blueprint by its responsible entity, Macquarie Bank. That followed an investment in an alleged illiquid asset through a UK-based hedge fund manager. Legal actions are either underway or under consideration on the more substantive matters.
There are also various administrative matters which need to be concluded before the company can be wound up, the liquidator’s report says. These include dealing with GST refunds, post-appointment BAS, the liquidator’s own accounts being lodged with ASIC and de-registration of the company.
“Following the resolution of the matters discussed above,” the report says, “and given the extent of legal actions currently being explored for the benefit of creditors it is premature to provide an estimation as to the likely conclusion of the liquidation.”
NOTE: the author is a former non-executive director of Pyne Gould Corporation, which was a substantial shareholder in van Eyk prior to the Blueprint funds freeze.