In a stinging court judgment, Olvera Advisors is ordered to pay club’s legal costs

The Warringah Bowling Club has been rescued from administration, but only after the Federal Court intervened. Picture: Facebook

How do you get kicked out of being the administrator of an insolvent local bowling club? And mess up so badly you get ordered to pay the legal costs of the club members that went to court to force you out? Imagine the embarrassment.

Yet that’s where Olvera Advisors principals Michael Billingsley and Tony Wright find themselves, after being sent away with a stinging rebuke from the Federal Court’s Justice Angus Stewart this week.

We’re not talking about some broken down country bowls club, to be clear.

We’re talking about the Warringah Bowling Club on Sydney’s North Shore – a 122-year-old club at the heart of Tony Abbott’s old electorate that’s been sitting on valuable land for more than a century.

But still, it’s a bowling club, not high finance.

And Olvera has spent much of the past year dealing with far more complex matters than the Warringah Bowling Club. Olvera’s Damien Hodgkinson was at the centre of John Adgemis’s efforts to save his hotels empire, and the firm is also working for Sanjeev Gupta’s flailing Australian metals business.

Michael Billingsly.

Tony Wright.

It was Olvera that proposed the deal that saved Gupta’s control of the Tahmoor colliery, as Margin Call reported on Monday. And Hodgkinson is now the sole director and owner of the company that owns Gupta’s Potts Point mansion in Sydney.

A world away from the affairs of a local bowling club.

But all those fees add up, right?

And what a set of fees it is!

A touch over $640,000 is being claimed by Billingsley and Wright, court records show, for a four-month appointment to a club that had assets of more than $10m, and debts of about a quarter of that.

Olvera were called in at Warringah in early August, after the directors were blindsided by a $100,000 bill from the Australian Taxation Office – sent to the club treasurer that resigned in 2008 and died in 2019.

Warringah Bowling Club’s premises is valuable plus it owns other commercial properties. Picture: Facebook

The club’s North Shore premises are worth a mozza, and it also owns a nearby commercial property that yields about $400,000 a year in rent from a childcare centre, so the solvency crisis was only ever going to be temporary, despite Warringah also owing $2m to Judo Bank.

Billingsley and Wright told a creditors meeting in October that their advice was the club should either sell some land, or bring in a property developer to help redevelop its assets – though that would need “strong governance and management of the process”. The kind, we imagine, best provided by competent and experienced administrators.

Instead Warringah members – helped by a “consortium of investors friendly to the club” – organised a quick whip-around to buy out Judo Bank’s debt and put the club back on a steady footing.

Enough said, you might think. Tell Billingsley and Wright the problem is fixed, call a second creditor’s meeting, and Bob’s your uncle.

Not so easy

Club president Leo Macpherson had to go to the Federal Court to win orders ending the administration, so resistant was Olvera to handing the club back to its members.

Instead of calling time after being advised of the $2m lifeline, Billingsley and Wright kept on with their “normal investigations to seek clarification of matters” about the club, dragging out their involvement for another month.

That included seeking a meeting with directors, queries about whether an ATO private tax ruling still held, and investigations into whether the use of the childcare centre by club members breached the club’s liquor licensing conditions – despite the fact that the childcare centre was on a separate block of land and was not, we’re guessing, serving vodka to toddlers.

The investigations, according to Justice Stewart, were “not in any sense material to the question at hand, namely whether the club was solvent”.

“Whether the administrators were simply misguided as to their responsibilities, blindly resolute in sticking to the usual course of administrators’ investigations and accordingly unresponsive to what the new circumstances demanded of them, or knowingly racking up unnecessary fees and expenses, does not matter,” he said.

“The administrators’ conduct in relation to the potential termination of the administration was unreasonable, and it demonstrated a partisanship contrary to their responsibility to maintain essential neutrality”

The result? Justice Stewart ended the administration, and told Olvera to cough up for the club’s legal costs.

For the record, Wright told Margin Call that Olvera was considering the judgment, and had no additional comment.