Luke Saraceni’s Westgem Investments has been placed into liquidation, following a heated creditors meeting in Perth this morning in which leading insolvency experts argued over who should be appointed to the role of liquidator.
The decision comes in the wake of Mr Saraceni launching a $200 million damages claim against Bankwest, the financier and major tenant of the Raine Square project, in the Supreme Court yesterday for an alleged breach of obligations of his financing agreement.
Raine Square was Mr Saraceni’s largest project but it led to a number of operational and financial issues.
Mr Hughes described Mr Donnelly as a “favoured practitioner” of the financiers, arguing that the bid to appoint him as liquidator was motivated by self-interest on the part of the receivers.
An administrator’s report distributed at the meeting stated that KordaMentha provided notice of the assignment of 14 debts to itself, totalling $680,000.
“It is extremely unusual, uncommercial, it smells of a sham and it requires additional investigation,” Mr Hughes said.
KordaMentha partner Mark Mentha disputed any wrongdoing and claimed the debt had been assigned in order to speed up the liquidation process.
“Your analysis is insufficient and at its worst, deeply flawed,” Mr Porter said.
Mr Saraceni expressed disapproval with the proceedings, asking rhetorically if a creditors meeting was “allowed to be a pseudo-trial”.
Bankwest appointed KordaMentha as receivers in January 2011, seeking to recover debts of more than $400 million.
KordaMentha sought to have a special purpose administrator appointed in the Supreme Court in November 2011 on the basis that Mr Hughes had a conflict of interest as a result of his extensive dealings with Mr Saraceni.
The court ruled in favour of Mr Hughes earlier this month.