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Keystone Asset Management Ltd

(Receivers & Managers Appointed) (In Liquidation)

ACN 612 443 008

Details

 

Appointment type: Receiver and Manager & Liquidator

Appointment date: 28 August 2024 & 2 December 2024

Appointees: Jason Tracy and Lucica Palaghia 

On 27 August 2024, as determined by an order of the Federal Court of Australia in proceeding number VID 536 of 2024, pursuant to s 1323(1)(h) of the Corporations Act, Lucica Palaghia and Jason Tracy were appointed as joint and several receivers and managers (receivers) of the Property of Keystone Asset Management Limited (KAM) (the Company) in its capacity as:

  • Responsible Entity for the Shield Master Fund (ARSN 650 112 057)
  • Trustee for the Advantage Diversified Property Fund; and
  • Trustee for the Quantum PE Fund (together, the Funds).

On 5 September 2024, as determined by an order of the Federal Court of Australia in proceeding number VID 536 of 2024, pursuant to s447(a)(1) of the Act and / or s90-15 of the Insolvency Practice Schedule (Corporations) (being Sch 2 to the Act), Scott Langdon, John Mouawad and Michael Korda of KordaMentha (prior administrators) were removed as the administrators of the Company and Lucica Palaghia and Jason Tracy were appointed as the joint and several administrators (administrators).

On 2 December 2024, at the second meeting of creditors of KAM, creditors resolved that the Company be wound up and Jason Tracy and Glen Kanevsky of Deloitte be appointed Joint and Several Liquidators (liquidators).

Our appointment as Receivers is not affected by our appointment as liquidators.

First Meeting of Creditors

The first meeting of creditors was held at 2:00 PM AEST on 9 September 2024.
 
At this meeting, creditors of the Company resolved to form a Committee of Inspection (COI) for the Voluntary Administration of the Company.

A copy of the minutes of the first meeting of creditors have been lodged with ASIC and creditors can request a copy of these by email to shieldinvestors@deloitte.com.au

 

Second Meeting of Creditors

The second meeting of creditors of the Company was held at 11:00 AM AEDT on 2 December 2024.

At this meeting, creditors resolved that the Company be wound up and Jason Tracy and Glen Kanevsky of Deloitte be appointed Joint and Several Liquidators.

Creditors of the Company also resolved to approve the remuneration and disbursements of the prior administrators’, the administrators’, the liquidators, to form a COI for the Liquidation of the Company and the future destruction of the Company’s books and records (subject to obtaining approval from ASIC pursuant to section 70-35 of the Insolvency Practice Schedule).

A copy of the minutes of the second meeting of creditors will be lodged with ASIC and creditors can request a copy of these by email to shieldinvestors@deloitte.com.au

Pursuant to the Order 4 of the 27 August Orders (a copy provided below), the scope of our appointment as Receivers includes:

  • “identifying, collecting and securing the Property of the First Defendant held in any of its Relevant Capacities;
  • ascertaining the amount of the Investor Funds received by the First Defendant;
  • identifying any dealings with, payments of, distributions of or uses made of the Investor Funds by the First Defendant;
  • identifying any Property purchased or acquired, directly or indirectly, with Investor Funds; and
  • recovering Investor Funds”

Our work to date has included:

  • Entering into possession and taking control of the property of the Funds
  • Carrying on the business of KAM in its capacity as responsible entity and trustee of the Funds
  • Recovering investor funds; and
  • Preparing a report to the Court in relation to the Property of KAM, investor funds, providing an opinion as to the solvency of KAM, and various other items.

We confirm that the receivers report was provided to the Court on 25 September 2024. The receivers report to Court is confidential and has been prepared solely for the purpose of providing the Court and the relevant parties a report as to the receivership of the Property of Keystone and the Funds as set out at Order 7 of the order made on 27 August 2024.

Our work as Receivers as set out above is ongoing.

We confirm that redemptions in the Shield Master Fund remain stopped pending the Court’s determination of the Proceeding which is ongoing.

A guide for creditors in a receivership prepared by ASIC is available here.

On 25 November 2024, the Administrators issued a report to creditors of KAM on KAM’s business, property, financial circumstances, and on the alternative future options available. This report also included a notice of meeting of creditors of KAM to be held on 2 December 2024.

The report disclosed that the Administrators had received three proposals to enter into an arrangement with KAM to avoid liquidation (generally referred to as DOCA Proposals). One of these proposals being from Mr Paul Chiodo was not progressed due to his confidentiality requirements and a supplementary report would be issued to creditors detailing DOCA proposal from Mr Roberto Filippini. The Administrators recommended against the DOCA Proposals on the basis that they were not in the best interests of creditors or SMF investors and set out their reasons for that opinion.

Following the release of the report to creditors, the Administrators received two further DOCA Proposals. The Administrators issued further reports to creditors on 27 November 2024 detailing the DOCA proposal from Mr Roberto Filippini and 30 November 2024 details a DOCA proposal received on 29 November 2024 from Newcoshield Pty Ltd. These reports informed creditors of the DOCA Proposals and set out the Administrators’ recommendation against these further DOCA Proposals on the basis that they were not in the best interests of creditors or SMF investors. Again, the reports set out the reasons for that recommendation.

We encourage creditors and investors to read these reports to understand the reasons for the administrators’ recommendation. In short, each DOCA Proposal involved creditors and SMF investors giving up on significant claims and assets at a very low rate of return and/or progressing risky and/or uncertain investments.

Copies of these reports are available on our dedicated website (see link below) under the heading ‘Notices & Court Documents’.

At the second meeting of creditors for KAM held on 2 December 2024, creditors ultimately resolved that the Company be wound up and Jason Tracy and Glen Kanevsky of Deloitte be appointed Joint and Several Liquidators.

In our role as liquidators, the scope of our role includes:

  • protect, collect and sell the Company’s assets
  • conduct further investigations and report to creditors about the Company’s affairs, including voidable transactions that may be recoverable for the benefit of creditors
  • conduct further investigation and report to creditors about offences committed by past or present Directors of the Company.
  • distribute money from the collection and sale of assets after payment of the costs of the liquidation to the creditors of the Company.

We note that, under the Corporations Act 2001 (Cth), a liquidator is provided with investigative powers to assist in identifying and recovering assets for the benefit of creditors, including powers to conduct public examinations where required to obtain information required for the purpose of their investigations.


The findings of our investigations will also be reported to ASIC.

A guide for creditors in a liquidation prepared by ASIC is available here.
 

Status of Creditors and Investors

We have received several queries from investors and creditors in relation to our appointments as receivers, administrators and subsequently Liquidators. Our appointment as receivers and liquidators have distinguished roles and responsibilities as described above.

We advise that investors in the Funds are not classified as creditors in the liquidation of the Company unless they have some other claim against the Company. Investors may wish to seek independent legal advice as to whether they may have some other claim against the Company. Unless an investor wishes to make a claim as a creditor, investors are not required to complete a proof of debt form or attend creditors meetings. We note that this relates only to the liquidation of Keystone in its own right, and this does not mean that investors are excluded from the insolvency process. Please see above for details of our duties to investors as receivers of the Funds, particularly with respect to recovering investor funds.

Future of the Funds

Given KAM has now been placed into liquidation, and no viable alternative was identified for the ongoing operation of the Funds, the Receivers are considering termination of the Funds and will provide further information to SMF investors in relation to this shortly.

We confirm that in our capacity as receivers of the Funds and liquidators of KAM, our focus is on recovering assets for the benefit of creditors and investors.

We confirm that redemptions in the Shield Master Fund remain stopped pending the Court’s determination of the Proceeding which is ongoing. As our investigations and the Proceedings are ongoing, we are unable to confirm the timing and quantum of funds available to investors.

We expect to provide a further update to investors shortly.

Further background to the Keystone matter, the status of enforcement action and further support and information is available on ASIC’s website at the link following: Shield Master Fund | ASIC.

VA Second Supplementary Report to Creditors
30 November 2024

Supplementary VA Second Report to Creditors
27 November 2024

Notice to Creditors
10 September 2024

VA Second Report to Creditors
25 November 2024

Extension of Convening Period
18 September 2024

Initial Notice to Creditors
06 September 2024

Court Orders
05 September 2024

Court Orders
27 August 2024

Court Orders
26 June 2024

 
General Enquiries

Please direct all future correspondence to shieldinvestors@deloitte.com.au.
 

Media enquiries

Kari Keenan
Communications, Media & Corporate Affairs
M: +61 409 366 226
E: kkeenan@deloitte.com.au