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Former operators of failed Bestjet face public interrogation

May 30, 2019 Headline News No Comments Email Email

The former operators of collapsed online travel firm Bestjet face being interrogated in a public court over the collapse.

Brisbane liquidator Pilot Partners has obtained orders for a public examination to be conducted by the Federal Court of Australia in Queensland and 9Finance has reported that 18 key players in the saga, including the company’s founder Rachel James and her businessman husband Michael James, have been summoned to appear in court on 12 June 2019 to produce key documents.

They must also appear on 24 July 2019 to provide testimony, according to court filings.

Rachel James founded Bestjet in 2012, a few weeks after the collapse of Michael James’ budget airline Air Australia.

Pilot Partners, the Bestjet liquidators, estimate the deficiency of Bestjet at AUD 22.6 million.

In a statutory report to creditors issued on 29 April 2019, Pilot Partners advised that it has also commenced legal proceedings in Singapore “in relation to rebates allegedly owing to the Company [Bestjet] from Bestjet Travel Pte Ltd (‘Bestjet Singapore’).”

The liquidators say they believe “that Mr Michael James may have acted as a de facto or shadow director of the Company. The Public Examinations will be used to extract further information from other parties to further evidence our claim that Mr James may have been a De facto director of the Company”.

The liquidators also note: “A director has a duty to prevent insolvent trading by the Company. If it is proven that a director (or a de facto or shadow director) has failed to comply with this duty, it may be possible for the Liquidators to recover from the director an amount equal to the loss or damage suffered by the Company.

“Our investigations have revealed that the director, former director and de facto/shadow director may have breached their obligations to act in good faith and in the best interests of the Company pursuant to section 180 and 181 of the Act [Corporations Act 2001].

“The Liquidators have completed and lodged with the ASIC a 533 report which outlines the offences that may have been committed.

“As previously advised, the Liquidators have also reported Mr and Ms James’ to ASIC for failing to provide information in relation to the Company’s affairs. ASIC has requested that we complete a supplementary report pursuant to section 533(2) of the Act. A further report to ASIC may be required after the Public Examinations”.

Written by Peter Needham

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