24/09/2008 - 22:00

Growth in local insolvency work

24/09/2008 - 22:00

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PERTH'S insolvency world is undergoing a restructuring of its own ahead of an expected rush of new business in the wake of the credit crunch and global banking crisis.

Growth in local insolvency work

PERTH'S insolvency world is undergoing a restructuring of its own ahead of an expected rush of new business in the wake of the credit crunch and global banking crisis.

Among the latest moves are Mel Ashton, who is taking a big role at KPMG, Vince Smith, who has shifted to Ernst & Young, and Jeff Herbert, who will next month become a partner in the new national PPB partnership.

Mr Ashton last worked directly in the insolvency sector with the WA practice PPB Ashton Read, but has most recently been running a mentoring business and joined several boards.

He will consult to KPMG and help them start up a reconstruction business in Perth that avoids direct involvement in administrations.

He will quit the Fremantle Dockers board after six years but remain with Gryphon Minerals Ltd, Venture Minerals Ltd and Empire Beer Group Ltd, including through the latter's progression into a cash box.

Mr Smith left Pitcher Partners in 2007 to join Deloitte but signed up for Ernst & Young a few weeks back.

Mr Herbert said he had been focusing on forensic accounting and expert reports at his own firm, Calyx Consulting, but had already developed strong links to PPB. He believed the environment was going to be buoyant for insolvency, with cash-strapped firms likely to run into trouble as bank credit policies changed.

"We have seen all this before," Mr Herbert said.

Lavan Legal insolvency lawyer Dean Hely said he had seen the professional services sector gearing up for increased work in the area after several lean years, especially in WA, where the recent shortage of work had resulted in less people with specialist knowledge.

Mr Hely said that while quality resources companies with good assets were expected to be safe, many other sectors could struggle.

"It is in that second tier of the economy," he said. "It is a product of mismanagement.

"Previously some of that could be covered up by the generous lending terms of the banks, especially with private equity about, people could borrow themselves out of trouble."

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