A national firm that claimed to be Australia’s highest-ranking legal service was wound up amid potential allegations of illegal phoenix activity, insolvent trading, and a failure to act in good faith.
Lawyers Weekly Australia
GTC Legal, formerly trading as GTC Lawyers or Taylor Rose Australia under the directorship of James Terence Alexander and Michelle Janette Makela, was wound up via special resolution in late May, according to documents obtained by Lawyers Weekly.
Alexander and Makela informed administrators at B&T Advisory that GTC Legal entered a joint venture with UK-based AIIC Limited – the parent company for Taylor Rose MW, FDR Law, SlothMove and Kingsley Wood – but its refusal to provide further investment “caused a detriment to the business which became unsustainable”.
GTC sought safe harbour advice and ceased trading last November.
Preliminary investigations by B&T’s Travis Pullen prior to 14 May identified potential contraventions of the Corporations Act 2001 by a director of GTC Legal, including an alleged failure to exercise their duties and powers with a degree of care and diligence and good faith.
According to Pullen’s second report to creditors, issued under the Insolvency Practice Rules (Corporations), there was a potential breach of a director’s duty to prevent insolvent trading by GTC Legal.
Pullen also identified potential alleged breaches related to use of position, unreasonable director-related transactions, and creditor-defeating disposition. The latter is often tied to illegal phoenix activity.
A number of clients were transferred to the related entity, GTC Legal Group Holdings (GTC-LGH), on or before GTC ceased trading.
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https://www.lawyersweekly.com.au/sme-law/44652-potential-contraventions-within-collapsing-law-firm
