High profile insolvency practitioner Damien Grant gained wide publicity and some sympathy fighting for registration as an insolvency specialist in the face of fraud convictions from his youth. Now, the High Court has disallowed fees of $20,000 and disbursements of $28,800 for poor record keeping in the liquidation of hydroponics company Quantum Grow Ltd and for his quixotic but ultimately fruitless chase after company assets.
Controlled by Alan Canavan, Christchurch-based Quantum Grow Ltd was put into liquidation by court order in 2012 for unpaid debts. The High Court was told Mr Canavan proved obstructive. Search warrants were needed to seize company records. Suspecting that Mr Canavan had shifted business assets across to another company called Lotus Gardens Ltd, Mr Grant took legal action against Lotus. Mr Canavan was by then giving as his home address a Northland address in Kaiwaka. Hundreds of thousands of dollars for in-house legal fees were incurred chasing Lotus through the High Court and on to the Court of Appeal for what amounted to a $25,500 claim. End result: nothing was recovered from Lotus.
All court-ordered liquidations require High Court approval for fees and costs incurred. The first round of paperwork filed by Mr Grant was turned back. Having recovered $210,100 in cash for creditors in the Quantum liquidation, he was claiming out of this $189,100 in fees and costs. The High Court asked for a detailed analysis. This was not forthcoming. The best Mr Grant could do was provide summary information. He did say that not all time incurred was being claimed; $340,500 in billable hours had been written off.
Associate judge Lester trimmed $56,300 off the $189,100 claimed for fees and costs as being unexplained. This $56,300 is to be paid to Quantum Grow’s creditors. Quantum has preferential creditor claims totalling $75,000; unsecured totalling $111,000.
Re Quantum Grow Ltd – High Court (8.10.21)
21.164