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Liquidators of LGL Commodities may take directors to court

Following the company entering administration in June this year, directors of failed grain company LGL Commodities may be taken to court as the appointed liquidators aim to retrieve up to $6m.

Andrew Yo of Pitcher Partners told the Weekly Times that the collapse of the company left around $10.7m of debt, inclusive of $8.3m owed to unsecured creditors.

In minutes from the last creditors meeting which took place on 26 September, the liquidator alleged that the company may have been trading while insolvent “since at least 30 April 2014”.

“The total value of the insolvent trading claim against the directors is estimated between $3.6 million and $6 million,” the minutes claimed.

“Initial investigations indicate that the directors may have breached Section 180 of the Act in relation to the duties as directors of the company.”

One of the company’s former directors, Simon Freeman, said at the same creditors meeting that the liquidator’s report failed to take into account a number of variables including potential insurance claims and alleged theft of stock. He also said that the directors would strongly defend any action regarding an insolvent training claim.

“Notwithstanding Mr Freeman’s claims, there is still $11 million which remains unpaid to creditors,” Yo told The Weekly Times.

“And these (losses) were accumulated over a number of months prior to the company’s insolvency.”

 

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