Insolvency firm's fraud claims hit court as industry faces overhaul

INSOLVENCY firm RSM Bird Cameron has launched legal action against former partner Glenn Anthony Crisp, alleging he committed fraud and misappropriated more than $500,000, much of which was used to renovate a suburban property, over the course of a long-running liquidation.

The case comes as the Gillard government released draft laws on Wednesday to overhaul the insolvency industry, including giving greater powers to creditors to remove liquidators and curb excessive fees.

Parliamentary secretary to the Treasurer Bernie Ripoll said in a statement: "The Gillard government is committed to restoring the community's confidence in the effective regulation, high professional standards, transparency and accountability of the insolvency profession following recent high-profile cases of misconduct by corporate insolvency practitioners."

Mr Crisp, a veteran insolvency practitioner whose list of appointments runs to 11 pages, has worked on jobs including Mick Gatto's Elite Dogman & Riggers, which failed in February owing the Australian Tax Office $3 million, and trucking company Viking Group, which collapsed last year amid allegations of fraud.

Mr Crisp, who now works for rival firm Jirsch Sutherland, denies the allegations, which relate to the liquidation of Foodlife Inventory Holdings between 2002 and 2008.

In a statement, his legal team said the allegations of fraud against him were not properly pleaded, he had provided all information about Foodlife to RSM and the firm had released him from any liability in a deed signed when he left in August.

BusinessDay is able to reveal details of the case after the Chief Justice of the Victorian Supreme Court, Marilyn Warren, threw out Mr Crisp's attempt to obtain a suppression order.

Justice Warren also denied a bid to force Fairfax Media to reveal its source, saying the application "contains an element of fishing", and awarded costs against Mr Crisp.

She said there was "a public interest" in reporting on Mr Crisp because, as an official liquidator, he acts as an officer of the court when he accepts appointments from the courts.

Mr Crisp is liquidator of Viking Group, which collapsed last year amid allegations that invoices had been falsified and luxury cars had gone missing.

The Herald Sun reported in August that it had "seen" emails to RSM Bird Cameron in which "claims were made that Hells Angel bikies illegally took trucks and other equipment on behalf of RSM Bird Cameron". RSM Bird Cameron has denied using Hells Angels to repossess goods and continues as liquidator of the Viking Group companies.

Mr Crisp was also appointed liquidator of Mick Gatto's company Elite Dogman & Riggers in February. That job remains with RSM.

RSM filed a writ on November 8, 2012, and a statement of claim eight days later. On the same day RSM filed the writ, its 80 partners slapped a caveat on Mr Crisp's property in Windsor Drive, Lysterfield.

The statement of claim alleges that as liquidator of Foodlife, Mr Crisp billed $2.1 million but failed to pass all the fees through to RSM, leaving a "shortfall amount" of $514,313.

Between September 8, 2004, and June 23, 2006, RSM alleges Mr Crisp made 70 payments from an account to his personal bank account to meet debts which he owed creditors.

It itemises payments to companies including Artistic Pools, A&R Building Constructions, Coolabah Landscapes and Valley Motor Group. Some of money was allegedly spent on property renovations at the Windsor Drive property.

RSM is seeking damages, an account of profits made by Mr Crisp in breach of his fiduciary duty, an order that any profits or benefits are held on trust for RSM, an order that Mr Crisp holds his interest in the Lysterfield property on trust for his former employer, and costs.

The insolvency industry has been the subject of a Senate inquiry after the government was pressured to review the sector and the role of the regulator, Australian Securities and Investments Commission, in its regulation of the industry. Liquidators have been called "cowboys", "bottom feeders" and "vultures", and have faced criticisms ranging from excessive fees, over-servicing, protracted settlements and lack of transparency, to conflicts of interest.

The Senate inquiry, which began in November 2009, has uncovered repeated complaints about the insolvency industry.