Tennis legend Ken Rosewall to return serve in Supreme Court action over BBY collapse

Liquidators of failed stockbroker BBY are seeking to recover funds from the former director.

Australian tennis great Ken Rosewall is being pursued by KPMG in a civil action over the BBY collapse. Picture: Brett Costello

Tennis great Ken Rosewall faces Supreme Court action next month as liquidators of failed stockbroker BBY seek to recover funds from the former director.

BBY liquidator KPMG is pursuing Mr Rosewall in a civil case over $3.3m paid to Ficema, an entity associated with him, before the 2015 collapse of the firm. KPMG are also preparing to make the first cash distribution in coming weeks to 6000 former BBY clients, relating to funds entangled in the firm’s demise.

BBY customers had claims of $64m.

Earlier court orders found BBY had been insolvent from January 2014, ahead of its 2015 collapse. The broker’s demise left a shortfall of about $20m in client accounts, following a complex web of questionable transactions.

Ken Rosewall was a director of BBY alongside his son Glenn, who ran the company, and lawyer David Perkins.

KPMG is arguing the loan repayment to the Ken Rosewall-associated entity was voidable because it reflected preferential treatment.

The funds were tipped into BBY when the stockbroker saw a $192m trade in Aquila shares go awry in mid-2014, spurring the firm to meet an ASX call for more capital.

KPMG had also been pursuing Glenn Rosewall over $2.5m in payments made by BBY to GARF, the trustee of his superannuation fund, at the time of the Aquila transaction.

But the liquidator was unable to recover those funds because Glenn Rosewall filed for bankruptcy in March last year. Some funds were recovered in settlements with insurers and BBY’s auditor BDO East Coast Partnership.

BBY customers will see the formal return of their funds, but not completely, after a protracted process spanning five years. Some were able to draw on a compensation scheme managed by the National Guarantee Fund, while others had incorrect transactions reversed earlier in the process.

“We are now in the home stretch of winding up BBY, which has been one of the most complex corporate liquidations in Australia,” said KPMG’s restructuring director Stephen Vaughan. “We have finally reached a significant milestone in the process … former clients of BBY can shortly expect their first distribution.

“If clients haven’t provided their updated personal details, they should do so now in order to receive their first payment. Next steps in the process can be found on the KPMG website.”

Over two payments, share trading BBY customers will see the return of 73c in the dollar, while those that used exchange-traded options will receive 59c. A third category, including foreign exchange and futures customers of BBY, will get 26c in the dollar.

The second payment will be made in the first half of 2021.