Refinery woes deepen

TOWNSVILLE is facing a second wave of pain from the failure of Clive Palmer’s Yabulu nickel refinery with liquidators now chasing the return of millions of dollars in payments made to businesses for supplying goods and services in the months leading up to the collapse.

While liquidators FTI Consulting describe the attempted clawback as a “standard part” of liquidation, Townsville lawyer Evan Sarinas said there was “great concern” among businesses they could be ruined.

Mr Sarinas said one client, who did not want to be identified, had received a letter of demand for the return of almost $ 100,000.

Other businesses had also made inquiries to him about similar demands from FTI Consulting.

“This is of great concern to the local business community,” Mr Sarinas said.

“They are already finding it tough given the demise of Queensland Nickel.

“Now they are being pursued to pay back money they received for goods and services that were supplied.”

Liquidators are obliged to recover funds for the benefit of creditors and the Corporations Act provides that payments made six months before their appointment can be recovered as “unfair preferential payments”.

In a report to creditors, FTI Consulting estimates up to 52 entities have received possible preferential payments totalling $ 18.4 million.

Mr Sarinas said FTI Consulting had issued a letter of demand to his client seeking payment within 14 days.

But from his investigations, Mr Sarinas said the transactions were not some sort of shadowy dealings but payments for goods and services duly provided in the normal course of business.

He said the client was a family business and that to pay $ 100,000 “could ruin you”.

An FTI Consulting spokesman confirmed they were “vigorously pursuing” uncommer- cial and director- related transactions with legal actions under way.

But the firm also warned in its creditors report that Queensland Nickel may have had “an apparent or prima facie right” to dispose of assets and interests as a trustee, including a trustee’s right to be indemnified, despite their investigations identifying some $ 224 million in Queensland Nickel funds which had been transferred to director- related parties in the five years before the refinery’s collapse.