Former Trims managing director Russell Trim under microscope over financial dealings

THE former managing director of the Trims clothing business has admitted to backdating the sale of his $1.9 million Toorak Gardens property to one day before he was made bankrupt.

THE former managing director of Trims has admitted to backdating the sale of his $1.9 million Toorak Gardens house to one day before he was made bankrupt.

Adelaide businessman Russell Trim confirmed the transaction while he was questioned in the Federal Court about the movement of his assets before and after the collapse of the Trims business in May last year, with debts of about $3.2 million.

The well-known clothing retailer was placed in administration after 77 years in business, most notably at its well-known site on King William St in the city, owing $3.2 million to about 60 creditors, with another $580,000 owed to staff.

Mr Trim’s trustees in bankruptcy are trying to make the case that Mr Trim propped up his son Matthew Trim’s failing restaurant ventures, while failing to pay creditors of the Trims retail business.

The movement of Mr Trim’s assets is relevant because he gave a number of personal guarantees to companies to which the business owed money.

If it can be shown the company was trading while insolvent, he could be held personally liable for its debts.

Mr Trim told the hearing that he had not transferred or gifted any assets worth more than $1000 in the past five years, which would have had to have been disclosed to his trustee in bankruptcy.

However, he then confirmed that he had borrowed $3.1 million in tandem with Matthew Trim’s wife, Olivia, in August, 2011,which was used to prop up his struggling restaurant businesses.

Mr Trim said he had “no idea” how the money was dealt with after he borrowed it and said he had “no expectation I would get the money back”.

The court also heard that Mr Trim transferred his shares in one of his many companies to his wife, Elizabeth, in mid-2103 - two months after Trims was placed in administration.

During the examination Mr Trim frequently could not recall details about the companies and trusts he was in control of, telling the court the group had about 300 entities and he couldn’t be expected to keep track of them all.

Catherine Gobbo, acting for the trustee, Pitcher Partners, asked him whether he had trouble with his memory, after one of several periods of questioning during which he could not recall details of transactions.

“No, I’m old, but I’m not that old. You’re asking questions which are very vague,’’ he said.

In relation to the sale of his house in Alexandra Ave, Toorak Gardens, Mr Trim said February 24, 2014, was used as the sale date because it was the date of the first offer.

But the court heard that real estate agent Jock Gilbert had provided a sworn statement to the effect that Mr Trim had asked him to backdate the purchase, which occurred on February 26.

Mr Gilbert’s statement read: “I was asked by Russell Trim to change the date on the contract’’.

The court also heard that Mr Gilbert said Mr Trim told him he had received advice that February 24 was a “better date”.

Mr Trim was declared bankrupt the next day.

Asked by Ms Gobbo if he was “in the habit of backdating documents”, an exasperated Mr Trim said she was “wasting the court’s time”.

“It makes no difference, anyway,’’ Mr Trim said.

“The property’s been sold, the trustees were never going to get any money out of it.’’

The hearing later heard that the original sale of the Toorak Gardens property had been halted after the trustee put a caveat on the deal, legally halting its progression.

The court heard Elizabeth Trim then set up a finance broking company, Secure Acquisition, which bought out the second mortgage on the property, declared the mortgage in default, and then sold the house, without Mr Trim notifying his bankruptcy trustee.

Ms Gobbo put it to Mr Trim that he had “contrived the transaction to frustrate your trustee’’.

Mr Trim replied that he had nothing to do with Secure Acquisition.

He was asked, in relation to the $3.1 million loan: “You would have done anything to keep (Matthew’s) businesses alive, isn’t that correct.’’

“I think that’s correct,’’ Mr Trim replied.

Matthew Trim runs Norwood restaurant Grace the Establishment.

He has run previous North Adelaide dining venues, including Sparrow and the Manse.

One of his businesses, T. H. Holdings, Pty Ltd, was placed in liquidation with debts of $900,000 in mid-2012.

Mr Trim also said that he had given personal guarantees to perhaps four or five of Trims’ creditors, meaning he would pay them personally if the business got into trouble, but could not remember the details of those guarantees.