The Kleenmaid group of companies suffered a high profile collapse in 2009.
A former director of one of the Kleenmaid group of companies, Bradley Wendell Young, has been sentenced to 9 years jail this month after being found guilty by a jury of 18 offences. Remarkably, the trial ran for 71 days. The jury found Mr Young guilty of:
- one count of fraud by dishonestly gaining loan facilities from Westpac Bank in November 2007 totalling $13 million;
- Two counts of criminal insolvent trading of debts totalling $3.5million relating to two additional loan facilities from Westpac Bank in July 2008; and
- 15 counts of criminal insolvent trading of debts totalling more than $750,000 that were incurred during the period October 2008 to April 2009.
The jury found Mr Young not guilty on one count of criminal insolvent trading.
Mr Young was sentenced to 9 years jail for the Westpac fraud and 3.5 years for the insolvent trading charges.
He will not be eligible for parole until November 2022.
This case is a reminder that insolvent trading is not a victimless crime and is a particular target for the ASIC. It should therefore be a primary concern of company directors and sole traders. If a company director (or sole trader) has any concern that a company may be insolvent, or is at foreseeable risk of insolvency should events not go the company’s way, the director should immediately seek advice from a specialist insolvency lawyer. The sooner the advice is sought, the more options that will be available (and likely better options too).
Mitchell Downes, partner, is a professional member of the Australian Reconstruction Insolvency and Turnaround Association – the professional body for specialist insolvency lawyers and practitioners.