Jon Adgemis $1.8bn debt decision delayed as bankruptcy regulator makes second intervention
Trustees for Sydney pub baron Jon Adgemis have told creditors a formal warning from the bankruptcy regulator was unnecessary in a tense affair. Archibald Capital boss Ben Madsen told the meeting he was ‘significantly impacted’ by the delayed vote.
The bankruptcy regulator has torpedoed another attempt by Sydney pub baron Jon Adgemis to secure a financial rescue by offering creditors 0.15c in the dollar to settle his $1.8bn of debt.
The Australian Financial Security Authority warned Mr Adgemis he risked jail time or fines if he or his trustees proceeds with a deal that it has repeatedly criticised as incomplete and lacking in diligence.
The businessman, who at his peak controlled a hospitality empire of more than 22 pubs, hotels, and other venues, is facing the prospect of being bankrupted and banned from running companies if his proposal is defeated.
Despite being warned they should not proceed with the meeting on Friday, creditors gathered in Sydney to decide his fate.
WLP Restructuring, Mr Adgemis’s bankruptcy trustees, told the creditors earlier on Friday the meeting could proceed, but it would seek an adjournment, and came good on its threat.
Creditors wanted to cast their votes but were stopped when trustee Scott Pascoe used his powers to adjourn the meeting to October 9.
That followed AFSA national manager Neville Matthew issuing a personal warning via his appearance on videoconference.
“Pushing ahead now would indicate to the inspector general a lack of impartiality between the controlling trustees, Mr Adgemis, and potentially some creditors,” Mr Matthew said.
“I remind the controlling trustees the need to remain impartial, act in the interests of all creditors, and to uphold the integrity of the personal insolvency system.”
Mr Matthew made a pointed warning to Mr Adgemis and those who may “aid or abet” anyone seeking to manipulate the bankruptcy process, and the potential to commit an offence “in knowingly giving a false and misleading answer to a question put to him at this meeting”.
Mr Adgemis joined the meeting via videoconference.
In a letter circulated ahead of the vote, Mr Matthew told WLP it had “not satisfied your statutory responsibilities in conducting an appropriate investigation” into Mr Adgemis’s assets.
“Despite the inspector general confirming the need for further investigation and additional information for creditors, you have instead indicated the issues raised by the inspector general are immaterial to the creditor’s decision.”
Several AFSA staff personally attended.
A spokeswoman for AFSA said the regulator was concerned about how much homework had been done on Mr Adgemis’s assets, reflecting the concerns of other creditors who had raised the same issue.
“The inspector general also has concerns about whether a number of parties have fully complied with the Bankruptcy Act,” she said. “However, the inspector general has not yet formed a view as to whether any specific provisions have been contravened by any particular party.”
But Mr Pascoe told the meeting he didn’t accept that “we’ve not been impartial”.
He decided to adjourn the meeting “despite two-thirds of creditors voting to proceed”.
“As AFSA rightly pointed out, Mr Adgemis’s affairs are complex, and we believe it is in creditors’s best interest to conduct further investigations into the issues raised,” he said.
“We have extended an invitation to all creditors to come forward with information that may support our ongoing investigations.”
The latest delay frustrated creditors, who first met on August 1 to decide his fate.
Archibald Capital boss Ben Madsen told the meeting he was “significantly impacted” by the delayed vote.
The private lender, a major backer to Mr Adgemis’s troubled pubs group, has heavily extended itself to finance his pub redevelopments including offering funds to finish several remaining incomplete venues.
Mr Madsen said he was seeking to refinance a $250m debt and the delays were “actually impacting lenders that have got security, that are trying to get a refi done on this”.
The meeting also heard questions about how Mr Adgemis was funding his attempt to secure a bankruptcy deal.
Mr Adgemis, who declined to comment, told the meeting the $250,000 to fund the process had come from his sister. His family has provided $3m toward the settlement with creditors.
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Originally published as Jon Adgemis $1.8bn debt decision delayed as bankruptcy regulator makes second intervention
