Scott McCorkell, the founder of the failed North Sydney advertising agency of the same surname, has been lobbying creditors to gather support for the liquidator in a bid to stop him being removed, according to insiders.
A group of creditors, including staff left without pay the week before Christmas and trade creditors, want a new liquidator appointed to McCorkell and Associates.
Documents seen by AdNews show Scott McCorkell contacting creditors with pre-filled proxy papers voting against the removal motion. Just add a signature to complete.
McCorkell, the CEO and founder in 1992 of McCorkell and Associates, and now the single director of a new company, McCorkell Group, has been contacted for comment.
The liquidator estimates a funding deficiency of $1,358,987 and that staff are owed $445,272.82.
A creditors meeting, called to vote on a motion to replace Liam Bailey of insolvency firm O'Brien Palmer, who was appointed by Scott McCorkell, is being held Wednesday this week.
Bailey says the meeting of creditors was convened at the request of Karen Powell, former general manager and managing director, in her capacity as a creditor.
Bailey told AdNews: “I am unsurprised to hear that creditors are gathering support from other creditors both for and against the motion for which the forthcoming meeting has been convened, after all that is the point of holding a meeting of creditors.
“Creditors who lobby other creditors often pre-fill the proxy forms to make life easier for those whose support they have secured.
“I’ve had no part in this process but I will address this matter at the forthcoming meeting now that you’ve brought it to my attention.”
Part of a pre-fileld proxy form being sent to creditors:
Bailey was appointed after the business of McCorkell and Associates was sold to a newly formed company McCorkell Group, leaving behind unpaid staff and a string of debts.
The price paid, $29,129.61, how this number was determined, the movement of assets to a new company and 18 staff left without pay are the issues behind the move to replace the liquidator.
According to documents lodged with ASIC, Bailey, before he was appointed liquidator, introduced a valuer, Andrew Whittingham of Groves & Partners, to Scott McCorkell to establish a price for the agency.
However, Bailey says the motion to remove him comes after he refused Karen Powell, a creditor and former senior executive at McCorkell, access to the company’s books. He says a court order is needed for this.
McCorkell, according to Bailey in his report to creditors, points a finger at Powell for the agency's problems but that she maintains she wasn’t responsible for the company’s finances and didn't access to its systems.
Bailey says the sale has caused “significant consternation” among former employees but that the transaction was one based on an independent valuation.
Bailey argues the business would likely have ceased to trade if the transaction had not occurred, causing a significant reduction in the value of assets. And another 41 employees would have lost their jobs.
The notice of meeting to put a motion replacing the liquidator includes a written consent to act as liquidator by Michael Hogan of Hogan Sprowles.
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