Liquidator appointed to wind up Bank of NauruDOWNLOAD
1 June 2011: The Government of Nauru has appointed Deloitte Insolvency Partner, Neil Cussen, as Liquidator of the island’s only financial institution, the Bank of Nauru (the Bank).
Mr Cussen, a Sydney-based south pacific specialist, last week sought orders in the Federal Court of Australia for cross border recognition of his appointment as Liquidator of the Bank by the District Court of Nauru.
The interim orders*, granted under the Cross Border Insolvency Act 2008, provide international recognition of Mr Cussen’s role as Liquidator in a foreign proceeding and allow him to temporarily dispose of the requirements to serve the originating application on the Bank’s creditors.
“There are approximately 3,500 deposit holders who are likely to be owed monies by the Bank,” he said. “However, the age and poor quality of its record keeping means that establishing a meaningful list of the Bank’s creditors is going to require a complex and protracted investigation.”
“It’s unusual for orders of this nature to be sought, but it’s likely that many of the Bank’s remaining assets could be located in Australia, Asia or elsewhere in the Pacific. These orders will help facilitate the process of locating and recovering those assets held outside Nauru.”
Mr Cussen, together with his specialist banking and finance team, will travel to the island in June to commence investigations in what is expected to be at least a year long liquidation process.
“The Bank has not filed financial statements since 2005 and our team will need to meet with Nauru government officials and deposit holders in order to reconstruct the Bank’s records before we will be able to establish the true extent of the situation,” he said.
The island has effectively operated as a cash economy since the Nauru Government revoked the licenses of all offshore banks in 2004 and the Bank of Nauru closed in 2006.
“The formal closure of the Bank of Nauru will help clear the way for the establishment of a new economic framework that is necessary to secure the financial future of the island.”
* The application for a final order recognising the Liquidator’s standing is returnable in the Federal Court on 28 July following completion of Mr Cussen’s initial investigations on Nauru.
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