Mahoneys recently acted for a creditor in the high-profile winding up of Descon Group Australia, a national construction firm conducting a $1b residential development on the Gold Coast.
Descon initially sought to resist the winding up on the basis that it was solvent. The Company went so far as to produce a solvency report from a highly reputable solvency practitioner to support its supposed, solvent status.
Descon failed, however, to provide its expert with a full picture of its financial position. For example, the Company unexplainably failed to inform its expert of a $3m debt facility with one of its funders. Nor did it brief the expert in respect of a $1m unsecured debt to AMEX.
Ordinarily, the test for proving solvency in the face of a winding-up application is notoriously difficult. With this in mind, the company did itself no favours by failing to brief its expert with accurate or even proper evidence of its financial position. This failure was easily exposed in the lead up to trial and resulted in a total capitulation at the eleventh hour.
Our team was led by Anders Mahoney with the assistance of Rhett Kipps of Counsel along with Shaun McKinnon and David Brushe of BDO Australia as experts.
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