The long-running legal entanglement between two local events companies is set to enter a new phase with expo group Exibit agreeing to fund a public examination into the demise of rival, and debtor, Consolidated Business Media.
CBM liquidator Gary Anderson confirmed that Exibit had agreed to pay the amount, about $20,000, required for the public examination.
The examination could result in former CBM director John Webb being required to answer questions in court as part of the process.
Matters likely to be the focus of investigation include concerns raised by Mr Anderson that some CBM funds and assets appear to be unaccounted for, and the circumstances of the sale of CBM’s remaining business assets to Media and Events Australia for $40,000.
However, Mr Webb’s wife Denise Webb is first in line for any funds identified through the examination because she bought secured creditor BankWest’s debt and has also appointed a receiver and manager to CBM.
Mr Webb said Media and Events Australia, the company he now works for, would take legal action to halt the public examination if it was being solely funded by its major competitor, Exibit.
“Most of the money that Exibit puts up for this examination will be chewed up in legal costs through our challenge,” he said.
A public examination is held in a court of law and witnesses, such as the former directors of the company in question, are questioned under oath.
Mr Webb said he was concerned the action by Exibit was solely aimed at causing damage to Media & Events, which is Exibit’s main competitor.
Exibit director Peter Versluis said he was funding the action because Exibit was owed money by CBM and that he believed there were funds that could be identified and recovered by an examination.
Several of the points likely to come up in any examination have already been the subject of a dispute between Mr Webb and Mr Anderson.
In a circular to creditors earlier this year Mr Anderson says there are questions relating to the sale of a boat, which realised about $17,000, that “appears to have been sold after my appointment, without my consent and without the proceeds being delivered to me”.
In the circular Mr Anderson also questions the whereabouts of sporting memorabilia, understood to be cricket bats signed by former Australian captain Alan Border, and valued at $30,000.
Mr Webb wrote to creditors following the release of the circular rebutting Mr Anderson’s claims.
In his letter he says the boat had been sold before CBM went into liquidation and that the proceeds had been put towards the company’s debts, and that the sporting memorabilia had been mostly given to clients for promotional reasons prior to Mr Anderson’s appointment.
On the question of the sale of CBM’s assets to Media and Events, Mr Webb provided a report prepared by MGI Bridge Partners which shows the consideration paid was almost $520,000, because Media and Events took on about $480,000 in liabilities from CBM.
It is understood Media and Events paid MGI Bridge Partners to conduct the report.
In the circular to creditors, Mr Anderson says three properties linked to Mr Webb could also be subject to investigation.
One of these is 11 Peasholm Street, City Beach, which was used to secure BankWest’s debt with CBM.
CBM was placed into liquidation in June 2004. It owed about $5 million to more than 70 unsecured trade creditors.
Those creditors include The Office of State Revenue, which is owed $250,000, 96FM Southern Cross Broadcasting ($24,000), and major professional services firms Freehills ($95,000) and Ernst & Young ($85,000).
Employee entitlement claims add up to more than $300,000.
Media and Events managing director Greg Millar is one of those claimants, seeking more than $40,000. John Webb is seeking $3,474 and Denise Webb $3,905.
