Newsletters

Playing cards or simply fishing?

Mon, 08 Mar 2010 02:03:06 GMT

In this issue of Expert Update, Adelaide-based Partner Peter Holmes finds that experts must demonstrate a legitimate forensic purpose behind their request for documents in the discovery process.

Decision time for winemakers

Sun, 28 Feb 2010 22:25:08 GMT

After a tough 2009 and looking ahead to an uncertain 2010, grape growers, winemakers and financiers face some difficult decisions about the future. In this issue of Ferriers Focus, John Hart and Brendan Richards look at the wine sector and some of the issues that need to be weighed up by industry players considering whether it is time to get out. Could we have seen the bottom of the cycle?

Provisional Supervision in Hong Kong – a New Dawn or Another False Start?

Tue, 09 Feb 2010 03:40:08 GMT

Pop Quiz – what does the US, UK, Australia, China, India, Singapore, Japan, most other moderately developed and many other developing countries have that Hong Kong doesn’t. Well it’s not an “Idol” talent show (although that possibly is also the case) and if you haven’t picked it up from the title, it is a regime for corporate rehabilitation. But, having first proposed legislation as far back as 1996 and having had that legislation stall on a number of occasions, it is again back on the agenda in Hong Kong. To be known as Provisional Supervision (“PS”), the Financial Services and the Treasury Bureau (“FSTB”) recently requested submissions on a further attempt at launching this surprisingly controversial but seemingly highly beneficial piece of legislation. In this article of FFA, we explore what PS might mean for stakeholders of financially distressed companies and the key issues still being considered before it becomes law (maybe).

Is the Debt You Hold Actually Subordinated Equity?

Mon, 11 Jan 2010 04:04:52 GMT

During this financial crisis, we have encountered a number of instances where investors have learned the hard way that their Senior Secured Loan, High Yield Bond, Convertible Bonds or Preferred Shares are structurally subordinated when the music stops. Investors have found out the hard way that even though they provided debt funding to an entity in a legally effective jurisdiction, given the funds actually ended up in problematic jurisdiction, their debt is in reality nothing more than subordinated equity.

In this article of FFA, we discuss the importance of structure with respect to investments, the common mistakes made and how to improve the investors’ position.

Asia Aluminum vs FerroChina – A Tale of 2 PRC Restructurings

Tue, 08 Dec 2009 07:39:46 GMT

Asia Aluminum (“AA”) and FerroChina have been the highlights of a surprisingly slow year for PRC restructurings. Whilst the jury is still out (and may remain out) on which case provided the most efficient and effective method of recovery, in this article of FFA we discuss the key factors which should be taken into account when considering the risks of any investment with PRC exposure and how to maximise the chances of a return in an insolvency scenario, no matter which jurisdiction insolvency proceedings are conducted.

Who gets the last word?

Wed, 02 Dec 2009 01:30:03 GMT

Where a single expert has been appointed to assist the Court, parties and their solicitors need to be mindful of a number of important points when communicating with that expert. Where those parties seek to rely on expert evidence other than that of the single expert, will this be permissible?

Facing the GFC’s Catch-22: Getting the balance sheet back on track

Mon, 30 Nov 2009 22:55:31 GMT

The Global Financial Crisis left many Australian companies struggling with a dilemma: they needed to raise equity to satisfy their lender’s requirements, but equity investors would not hand over a dime unless they had absolute certainty regarding debt. How could you get one without the other? In this month’s Ferriers Focus Bruce Carter and Geoff Bishop write about their experiences helping companies take control of their balance sheets.

Time is money

Sun, 29 Nov 2009 23:42:03 GMT

In this month’s Forensics@Ferriers, Adelaide Partner Peter Holmes provides insights for experts evaluating claims for loss of opportunity. What discount rate should be applied? How do you identify the date of loss? And how is this affected by the risk profile of past and
future losses?

When the rules of evidence don't apply

Wed, 18 Nov 2009 22:15:14 GMT

In this issue of Expert Update, Brisbane-based Partner Tim Michael highlights that in an inquiry where the rules of evidence do not apply, bias and expertise are no impediments to the admissibility of testimony.

Techniques in PRC Accounting (Cooking the Books, Chinese style)

Tue, 10 Nov 2009 09:12:02 GMT

In our March 2009 edition of Ferriers Focus Asia, we discussed some of the issues in relation to fraud that frequently occurs in Hong Kong and
the People's Republic of China ("PRC").

The PRC is generally viewed as a country that does not adhere to international accounting policies and guidelines. Many PRC companies falsify their records to establish a successful operating environment or reduce the burden from corporate income tax or business tax. The accounting industry is generally aware that some companies in the PRC prepare two (or more) versions of accounting records, one for auditing, and one for tax purposes. In this edition of FFA, we share with you some techniques and examples undertaken in the PRC to manipulate accounting records, or "cooking the books", Chinese style.

Game over, but who pays for the referee?

Wed, 04 Nov 2009 21:56:12 GMT

This issue of Expert Update argues that the Court will tend to support the position of the referee, so long as he or she has acted in accordance with the terms of the reference.

On the road to failure...

Wed, 21 Oct 2009 01:13:35 GMT

In this issue of Expert Update, Adelaide-based director Lachlan Johns highlights the need for experts to assess the reasonableness of information provided to them. It is also up to the expert to ensure a thorough understanding of the circumstances upon which their opinions are based and to maintain their independence.

Experts duel over discounts

Fri, 16 Oct 2009 04:20:55 GMT

This month’s Forensics@Ferriers examines the complex methodology that is used to calculate damages claimed under breach of contract.

This month we offer the option of a summary or a more in-depth version.

The Impact of the Financial Crisis on Hong Kong Listed Companies

Wed, 14 Oct 2009 05:37:52 GMT

On 15 September 2008, Lehman Brothers in the United States filed for bankruptcy protection and the financial crisis that had been brewing since sub-prime losses were announced many months earlier was on. In Asia, a wave of listed company collapses followed, headlined by Peace Mark Holdings and Tack Fat International, among others, and it appeared Asia too would plunge into the financial abyss with economies in the West. Now, more than 12 months on, most Hong Kong listed companies have reported financial results for at least some period since the commencement of the financial crisis. In this ground-breaking article of Ferriers Focus Asia, we provide the first comprehensive analysis of how the global financial crisis has impacted listed companies in Hong Kong.

Competent professional advice - the ultimate issue

Fri, 09 Oct 2009 04:15:31 GMT

In this issue of Expert Update, Adelaide-based partner Peter Holmes illustrates the danger of experts giving evidence regarding the content and application of a legal standard. Leave it for the court to decide!

The solvency question: Is it time to change the law?

Wed, 07 Oct 2009 20:46:01 GMT

There has been plenty of debate about Australia’s trading-whilst-insolvent legislation. Does it do the job? Should we be adopting a different model? Is it time to introduce a “business judgment rule”? In this issue of Ferriers Focus, Sydney Partner John Melluish looks at whether the Global Financial Crisis has provided us with the perfect catalyst for legislative change.

Relativity: Making litigation fit the bill

Fri, 18 Sep 2009 05:19:28 GMT

In this issue of Forensics@Ferriers, we look at the issue of “mega-litigation” and the need to introduce balance and proportionality into the demands these complex cases make on court resources and the coffers of litigants.

Retail recovery:

Mon, 14 Sep 2009 23:24:58 GMT

In this issue of Ferriers Focus, Melbourne partner James Stewart looks at the impact of the global financial crisis on Australian retail and shares his insights on what makes a retail survivor.

Taking control of a PRC factory

Thu, 03 Sep 2009 05:57:20 GMT

Protests, blockades, threats, kidnappings, violence, bribes, government seizures, riots and even the occasional car chase; sounds like a civil war or the latest Hollywood action movie. Instead, this is what often goes on in taking control of a factory in China. When restructuring professionals are engaged to take control of factories situated in Mainland China, a key factor to their success is to stabilise and understand the operation of the factories in a very short period of time with a view to achieving some form of restructuring. In this article, we will share with you some of our experiences gained from taking control, stabilising and managing factories in Mainland China together with some war stories (almost literally) along the way.

Delivering the goods:

Thu, 30 Jul 2009 00:03:08 GMT

This issue of Ferriers Focus examines the road transport industry and the boom-time traps that have left many operators particularly exposed to the impact of economic decline. Melbourne Partner Brendan Richards provides a checklist of transport industry danger signs and identifies the characteristics of successful transport operators.

Prior inconsistent statements in the world of expert evidence

Wed, 22 Jul 2009 04:35:47 GMT

In this issue of Expert Update, Sydney-based senior manager Nick Maiden illustrates the importance of doing your homework thoroughly when selecting expert witnesses, or it might come back to haunt you later.

Summary dismissal

Mon, 13 Jul 2009 01:07:23 GMT

In this issue of Expert Update, Sydney-based senior manager Nick Maiden highlights the importance of showing the reasoning followed in arriving at an opinion. Failure to do so may increase the risk that parties will object to the admissibility of an expert’s opinion.

Fairness not required when dealing with experts

Mon, 13 Jul 2009 00:02:56 GMT

In this issue of Expert Update, we review an interlocutory judgment in the James Hardie litigation which considered whether it was necessary to put evidence – which was said to contradict the basis for an expert’s opinions – to the expert in cross-examination to comply with the “rule in Browne v Dunn”.

Commercial property déjà vu

Wed, 01 Jul 2009 04:42:08 GMT

In this issue of Ferriers Focus, Brisbane-based Greg Moloney and Mark Javed look at the downturn in the Australian commercial property market and compare it with the downturn of the 1990s. Is this something we should have seen coming?

Experts: a privileged class, some of the time

Tue, 23 Jun 2009 06:53:24 GMT

IO Group Inc v Prestige Club Australia Pty Ltd (No 2) [2008] FCA 1237

This issue of Expert Update considers a further case dealing with privilege, emphasising once again the need for experts to be alert to the possibility of all of their work being made available to all parties.

Cracks in the crystal ball

Thu, 18 Jun 2009 06:33:13 GMT

In this issue of Forensics@Ferriers, Adelaide-based Partner Peter Holmes looks at the important role financial modelling plays in establishing what could have happened in hypothetical situations. Increasingly, Courts rely on these models to help inject some science into assessing "what-if" damages claims. However, caution needs to be exercised by experts to ensure that such models do not simply produce hypothetical outcomes which are not founded on reasonable assumptions.

Exceptional evidence (part II)

Wed, 10 Jun 2009 01:44:35 GMT

Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2008] NSWSC 506
Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2009] NSWSC 49

In the second of two related articles, Sydney-based Senior Manager Nick Maiden examines two related cases that resulted in expert evidence being allowed into evidence under exceptional circumstances, but with restrictions to its use.

Exceptional evidence (part I)

Wed, 10 Jun 2009 01:44:35 GMT

State of NSW v Tyszyk [2008] NSWCA 107
Stolfa v Owners Strata Plan 4366 Ors (No 2) [2008] NSWSC 531
Quintano v B W Rose Pty Ltd [2008] NSWSC 956

In the first of two related articles, Sydney-based Senior Manager Nick Maiden examines three separate cases where the Court’s normal procedures were tested by applications to consider whether expert evidence could be called in exceptional circumstances.

Bankruptcy Law in India

Fri, 05 Jun 2009 09:41:47 GMT

Whilst other countries in Asia have successfully developed and implemented new or substantially revised insolvency regimes in the past ten years (most notably Asia’s other growing economic giant and India’s key rival - China), India has lagged behind, weighed down by indecision and bureaucratic hurdles. In this article of FFA, we explore the development, evolution and tribulations of bankruptcy law in India and more importantly, what it means for lenders and investors.

Not all experts agree that 'no news is good news'!

Tue, 02 Jun 2009 23:09:11 GMT

Jubilee Mines NL v Riley [2009] WASCA-

In Fraud on the market: what role will experts play? (Forensics@Ferriers, Feb 2008), we examined the types of experts likely to be called in shareholder class actions relating to the alleged inadequate disclosure of market sensitive information. This issue of Expert Update considers the case of Jubilee Mines NL v Riley where a single shareholder commenced proceedings against a company for failing to disclose ‘good news’.

Wine Choices

Fri, 29 May 2009 06:07:43 GMT

The combined impact of the global financial crisis and falling demand on top of drought, bushfires and even frosts is proving a challenge for Australian wine makers. In this edition of Ferriers Focus, Adelaide-based partner John Hart writes about the serious issues facing the Australian wine industry – and the reasons for optimism.

Falling at the first hurdle - failure to gain admission

Thu, 28 May 2009 04:13:46 GMT

In this issue of Expert Update, Adelaide-based Partner Peter Holmes looks at a case that illustrates the importance of having experts consider carefully whether they possess the expertise to formulate the assumptions that inform their opinions, or whether further evidence is required to support those assumptions.

Taken for a ride

Tue, 19 May 2009 06:37:50 GMT

Taken for a ride

Limousin & Limousin [2008] FamCA 315 (30 April 2008)

In this issue of Expert Update, Sydney-based Senior Manager Alex Bell discusses a finding in which a cost order was made against an instructing solicitor following the poor behaviour of both the solicitor and the expert he had retained. To download the entire article click here.

Tainting your Expert

Wed, 13 May 2009 23:38:45 GMT

Tainting your expert

Whiteley v Price [2008] FamCA 195
Esco Corporation Bradken Resources Pty Ltd v PAC Mining Pty Ltd & Ors [2008] FCA 640

In this issue of Expert Update, Adelaide partner Peter Holmes examines two findings that revolve around the context in which instructions are given to an independent expert. Sometimes the provision of other informed opinions to an expert may impact on the expert’s perceived objectivity. continue reading...

When is an expert’s opinion not his own?

Tue, 05 May 2009 05:52:46 GMT

When is an expert’s opinion not his own?

Paino v Paino [2008] NSWCA 276 (29 October 2008)

This judgment is an appeal against an earlier ruling in the NSW Supreme Court. Central to the appeal was the trial judge‟s decision to rule as inadmissible expert evidence submitted on behalf of the plaintiff. In the original trial, the plaintiff wished to tender a report as to the value of certain properties belonging to the defendant on the Italian island of Filicudi. The report was an English translation of a joint report prepared in Italian by Mr N (a surveyor) and Mr F (a real estate agent). The joint report was attached to an affidavit of Mr N and only Mr N was called to give evidence. continue reading...

Rule Number One: Keep your eye on the ball

Thu, 30 Apr 2009 22:04:52 GMT

As if running a business wasn’t hard enough, the challenge of monitoring key performance indicators and dealing with compliance obligations whilst juggling the demands of staff, suppliers and clients can make it hard to keep your eye on the ball. In this edition of Ferriers Focus, Sydney Partner Morgan Kelly has created a roadmap for responsible management and a list of things to keep in mind when dealing with financial distress.

Lemon business leaves sour taste

Wed, 29 Apr 2009 03:01:00 GMT

Lemon business leaves sour taste

Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 7) [2008] FCA 1364

In March 2005, Citrus Queensland (“CQP”) purchased two citrus orchards and a packing shed in the Maryborough-Bundaberg area of south-east Queensland from Sunstate Orchards (“SOP”) for $4.5 million. Between March and June 2005, the orchard business incurred trading losses of over $500,000, prompting the appointment of an Administrator. continue reading...

Monster vs Monster

Thu, 23 Apr 2009 00:42:29 GMT

Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCA 406 (31 March 2008)

Bickfords Australia Pty Limited (“Bickfords”) sells an energy drink in Australia called Monster Energy. Hansen Beverage Company (“Hansen”), an American company, also sells an energy drink called Monster Energy in the USA and other countries, but not in Australia. In a recent case, proceedings were taken by Hansen as to whether there had been a contravention of the Trade Practices Act by Bickfords and whether it had been attempting to pass off its Monster Energy drink as Hansen’s.

Zen and the art of expert evidence

Wed, 08 Apr 2009 05:52:36 GMT

Shmee Pty Ltd Anor v Bresam Investments Pty Ltd & Ors [2008] VSC 320

In this matter, Justice Vickery disregarded the initial opinions provided by two accounting experts in relation to the assessment of loss and damage which required the valuation of a business at a point in time.

Experts’ Privileges Reviewed (Part III)

Wed, 01 Apr 2009 04:56:23 GMT

Experts’ Privileges Reviewed (Part II)

Wed, 01 Apr 2009 04:50:25 GMT

Experts’ Privileges Reviewed (Part I)

Mon, 23 Mar 2009 05:42:37 GMT

Stemming the tide of financial statement fraud

Thu, 12 Mar 2009 23:34:04 GMT

The unfolding economic and financial crisis looks set to usher in a new era in the world of financial statement fraud. Whereas the WorldCom-Enron era was primarily concerned with greed, the current brush with recession means that we may see a raft of financial statement fraud cases brought about by the need for self-preservation. In times where corporate resources are being trimmed to the minimum, companies and their Boards are likely to face some hard choices when deciding whether to commit those resources to the investigation of financial statement fraud cases.

The truck stops here

Thu, 05 Mar 2009 04:18:38 GMT

Lowe v Mack Trucks Australia Pty Limited [2008] FCA 439 (4 April 2008)

These proceedings concerned a truck purchased from Mack Trucks Australia Pty Ltd (the ‘Respondents’), which the Applicants claimed suffered from a rough ride, vibration and poor handling characteristics. Ultimately, the judge – Kenny J – ruled in favour of the Respondents. Continue reading...

Fraud 101

Tue, 03 Mar 2009 06:15:07 GMT

As our clients know, Ferrier Hodgson specialises in dealing with companies experiencing some sort of business difficulty; often a financial problem but sometimes operational, management and general business problems. Of the companies experiencing financial difficulties, the prevalence of misconduct and fraud is absurdly high in Asia. It continues to amaze us that so many companies engage in spurious activity, thinking they will be able to get away with it. Activity that we are experienced in uncovering and knowledgeable in investigating. The manner in which this activity is conducted is usually not particularly sophisticated, can often be detected reasonably easily and from our experience is becoming somewhat predictable. So predictable in fact, that it almost seems as if there is a text book or class being conducted somewhere teaching management how to perform such misconduct. In this article of FFA we explore the typical areas of misconduct we have been seeing in recent years through a mythical class. Welcome everyone, to Fraud 101.

What is the "advantage" that makes a preference payment unfair?

Fri, 27 Feb 2009 02:05:39 GMT

Advances to pay wages failed to gain priority in liquidation.

Fri, 27 Feb 2009 02:03:42 GMT

A mixed bag of Bancrupcy Act changes.

Fri, 27 Feb 2009 02:02:30 GMT

Voluntary administrator and director succeed in reversing adverse findings.

Fri, 27 Feb 2009 02:01:07 GMT

Words are important - actual and potential abberations in insolvency administration.

Fri, 27 Feb 2009 01:59:18 GMT

Insolvency training by Walter Wheel directors: matters of interest.

Fri, 27 Feb 2009 01:56:19 GMT

Employees kept on in receivership: annual leave long service leave and retrenchment.

Fri, 27 Feb 2009 01:54:49 GMT

Voluntary administrators must personally attend proposal meeting.

Fri, 27 Feb 2009 01:52:56 GMT

Bankrupcy trustees challenge voluntary administrators about indemnities from investors.

Fri, 27 Feb 2009 01:50:35 GMT

Electricity supplied is a debt incurred by the receiver for "goods purchased".

Fri, 27 Feb 2009 01:46:50 GMT

Appointment of voluntary administrator to company was an abuse of process.

Fri, 27 Feb 2009 01:04:32 GMT

Litigation funder to share benefits equally with unsecured creditors.

Fri, 27 Feb 2009 01:01:06 GMT

Did amendments intentionally or (unintentionally) expose trustee company directors?

Fri, 27 Feb 2009 00:58:09 GMT

Changes on the personal bankruptcy scene.

Fri, 27 Feb 2009 00:53:43 GMT

When volutary administration/deeds of company arrangement follow liquidation.

Fri, 27 Feb 2009 00:52:17 GMT

Proving insolvency: two recent developments.

Fri, 27 Feb 2009 00:45:03 GMT

Directors actual and defined.

Fri, 27 Feb 2009 00:40:43 GMT

Group deeds of company arrangement and liquidations.

Fri, 27 Feb 2009 00:18:59 GMT

Disclaiming onerous assetts or contracts.

Thu, 26 Feb 2009 23:46:00 GMT

Administrators may need to verify the validity of their appointment.

Thu, 26 Feb 2009 23:40:18 GMT

A recent decision in the Supreme Court of Queensland provides a timely reminder for all practitioners to take steps to ensure the validity of their appointment as voluntary administrators if the circumstances indicate matters of concern.

Who are you: expert, valuer or employee?

Mon, 09 Feb 2009 05:50:43 GMT

The issue

This article looks at the role of Mr B, a property valuer employed by agents acting on behalf of the Commonwealth Bank of Australia (“the Bank”). Mr B valued a hotel for the Bank and gave evidence about that in court. Later he became an employee of the Bank and questions were raised about when he became an employee and why he did not disclose that to the Court.

Gambling on the future of gaming

Mon, 02 Feb 2009 22:10:13 GMT

In Australian folklore there is nothing as bad as a pub with no beer. But ask many in the hospitality industry and they will tell you it runs a close second to a pub with no gaming machines. In this issue of Ferriers Focus, Melbourne-based Executive Manager Colin Gill examines key changes to the Victorian gaming sector and what they mean to hotels, clubs and financiers.

How a Chief Restructuring Officer can save businesses in Asia

Sat, 17 Jan 2009 22:31:43 GMT

The attitudes of financiers and other stakeholders when it comes to recovery processes have changed vastly during the course of the decade. The focus is no longer on a quick-fix return. The shut it down culture is being replaced by a rescue culture. We are now seeing from financiers and other stakeholders a much greater focus on adding value through operational restructuring. In this article we explore the evolution and rise of Chief Restructuring Officers (“CROs”).

The weight of it all

Thu, 08 Jan 2009 00:26:09 GMT

Can an expert give evidence in a matter involving his or her employer? And even if it is legal, is it sensible?

Surprising the Sceptics

Wed, 07 Jan 2009 21:55:07 GMT

When Western Australia’s biggest beef abattoir – Harvey Beef – went into voluntary administration after suffering a $16 million loss over the previous year, the estimated return to unsecured creditors was a disappointing 44.5 cents in the dollar.

A blueprint for better restructuring

Wed, 07 Jan 2009 21:54:42 GMT

The introduction of the Voluntary Administration (VA) process in June 1993 was the most significant reform of Australian corporate law in many years, allowing Australia to boast one of the world’s most effective corporate rescue regimes. Now, 14 years later, we are witnessing the introduction of wide-reaching reforms to that regime via the Corporations Amendment (Insolvency) Act 2007 which will keep Australia’s VA regime as a model for others to follow.

Facts and inference in expert evidence

Wed, 07 Jan 2009 21:28:49 GMT

Experts are frequently asked to make assumptions about the facts of a case. Just how closely those assumptions need to correlate with the facts as ultimately found has long been a difficult question. But what if the assumptions can only be said to be based on inference?

Hypothetical or real value?

Wed, 07 Jan 2009 21:28:29 GMT

The classic test of value is directed towards a consideration of how “hypothetical” buyers and sellers would act. In applying such a test, can it be relevant that there may be no actual market for the thing being valued?

Single expert – solution or problem?

Wed, 07 Jan 2009 21:28:14 GMT

Difficulties experienced by the courts with the use of experts led to an increased willingness to try alternatives, like jointly-appointed or court-appointed single experts. As these cases show, having only one expert is not a panacea.

Can an expert have a private life?

Wed, 07 Jan 2009 21:27:49 GMT

What effect is there on an expert’s evidence, when they have previously expressed their private views on matters connected to their expertise?

Experts: a privileged class?

Wed, 07 Jan 2009 21:27:19 GMT

Just when will an expert’s instructions, draft reports and work papers attract the protection of privilege?

What’s a good expert worth?

Wed, 07 Jan 2009 21:10:44 GMT

When is it OK to adopt a “Rolls Royce” approach to expert evidence? And when will the associated costs not be recoverable?

Could Copernicus have been an expert witness?

Wed, 07 Jan 2009 21:10:26 GMT

One test of expertise is that it relates to a recognised body of knowledge. So what should a court do when an expert disputes the accepted view in their area of expertise?

Return to sender

Wed, 07 Jan 2009 21:10:02 GMT

Outsourcing electronic discovery to a forensic IT consultant makes a lot of sense. However, outsourcing the assessment of privilege does not.

Defamation damages: expert’s view rejected

Wed, 07 Jan 2009 21:09:47 GMT

When the Herald Sun was sued for defamation following a series of racy articles, the plaintiff relied on an expert witness whose evidence was found wanting.

Is that the sound of disappearing IP?

Wed, 07 Jan 2009 21:09:25 GMT

When a CEO departs for a major competitor, how do you know what he or she is taking with them?

The not-so-happy campers

Wed, 07 Jan 2009 20:58:36 GMT

When the question given to the expert involves the application of an interpretation of legislation, trouble could be just around the bend.

Evaluating the valuers

Wed, 07 Jan 2009 20:46:37 GMT

When a valuer’s senses suggest something smells funny it may not be the scent of pyrethrum in the morning.

Judge critical of experts’ independence

Wed, 07 Jan 2009 20:46:14 GMT

In an adversarial legal framework, the expert witness needs to ensure that they maintain their independence (both actual and perceived) as their role is to assist the Court and not be an advocate for the party who engaged them to act in the proceeding.

Mr Expert, back in your box

Wed, 07 Jan 2009 20:45:52 GMT

Experts should know and observe the boundaries of their expertise.

How reliable is your client’s information?

Wed, 07 Jan 2009 20:45:24 GMT

When a client briefs his expert witness before a hearing, what lengths should the witness go to in order to independently verify what he has been told?

Judge shows referee the red card

Wed, 07 Jan 2009 20:31:30 GMT

“The Referee ought to have observed concepts of natural justice in preparing his opinion … his report must be rejected, on the basis of the principles of procedural fairness.”

Referee’s red card overturned on appeal

Wed, 07 Jan 2009 20:31:14 GMT

"The Referee was not a lawyer, let alone a judge, and while qualified to give the expert opinion sought of him, was apparently unfamiliar with the procedures and protocols involved with litigation."

Experts jointly agree to disagree

Wed, 07 Jan 2009 20:30:55 GMT

Legal practitioners should be mindful of the appropriateness of alternative means of gathering expert evidence and whether one or more is preferred over another.

On morality, decency and propriety

Wed, 07 Jan 2009 20:30:42 GMT

Should an expert watch X-rated films? If they intend giving their expert opinion on the content, it is their duty!

Admissibility of expert testimony

Wed, 07 Jan 2009 16:07:35 GMT

They say patience is a virtue – that is certainly true when it comes to efforts to strike out expert testimony. It may be better to simply wait for the opportunity to shoot it down in cross examination.

Too much, too late

Wed, 07 Jan 2009 08:48:10 GMT

The repeated failure to comply with Court timetables in relation to expert evidence may result in the Court looking dimly on the evidence produced.

Liquidator’s experts panned by Court

Wed, 07 Jan 2009 08:47:14 GMT

The line between a lawyer appropriately assisting an expert and getting in the way is notoriously hard to discern. Giving an expert too much help can sometimes prove very unhelpful.

How close is too close?

Wed, 07 Jan 2009 08:46:28 GMT

An expert witness’s paramount duty is to the Court. But how much can an expert help the client?

Whose expert is this anyway?

Wed, 07 Jan 2009 08:45:26 GMT

An application by the plaintiff sought to restrain the expert it had retained from making any further contact with the defendant, including its solicitors and counsel, in two sets of proceedings commenced by the plaintiff in the Supreme Court of Victoria. Alternatively, the application sought that he be restrained from using, copying or dealing with any confidential information in connection with the proceedings.

Time out!

Wed, 07 Jan 2009 08:44:39 GMT

Retaining an expert will frequently result in gaining valuable insights into the matters in dispute. But failure to engage an expert early enough may have significant adverse consequences for the outcome and costs of a case.

Committed to the cause

Tue, 06 Jan 2009 22:41:33 GMT

The case of a former employee of the Australian Taxation Office being found guilty of two offences under the Crimes Act 1914 highlights a number of common issues where an expert ceases to be independent and oversteps the boundary of proper expert evidence.

Chinese manufacturers experience growing pains

Tue, 06 Jan 2009 08:56:08 GMT

Remember the days when DVD players cost US$1000 and were the domain of wealthy technophiles? The boom in Chinese mass manufacturing has changed all that. Today the world is awash with cheap Chinese-made DVD players that retail for about the same cost as a series box set of the Sopranos. You’d think the biggest problem for Chinese manufacturers would be where to put all the cash.

Peering Inside The Forensic Black Box

Mon, 05 Jan 2009 05:25:58 GMT

Whoever coined the expression “the numbers never lie” was on the money. It’s ironic that the growing number of corporate scandals and revelations of false accounting suggest there are plenty of people who haven’t heard the expression. Every accounting double entry has an equal and corresponding counter effect and no matter how elaborately the accounting is covered up, the numbers – as irresistible as gravity – tell the truth.

Warning Signs for Corporate Distress (Part 1)

Mon, 05 Jan 2009 05:25:41 GMT

The ability to identify companies likely to collapse or face substantial financial distress has always been a difficult task. Comparisons of many companies that have failed does however, provide a number of clues of what to look out for.

Warning Signs for Corporate Distress (Part 2)

Mon, 05 Jan 2009 05:25:28 GMT

Would you lend money to a company that in just three years doubled its shareholders’ equity, increased its net income by nine times, tripled its return on assets and had earnings-per-share growth of six times. A safe bet? That’s probably what lenders and shareholders of Enron thought before its stunning collapse in 2001.

Asian Financial Crisis 10th Anniversary Roundtable Discussion

Mon, 05 Jan 2009 05:25:14 GMT

On 23 October 1997, stock market around the Asia region dramatically collapsed. Whilst the 1997 Asian financial crisis had officially begun some months earlier, late October marked some of the most substantial stock market falls throughout the region, resulting in a deepening of the Crisis and scarring economies for years to come.

Ten years on, and amidst the most volatile year that equity and credit markets have experienced for some time, we take the opportunity to look back at the events surrounding the Crisis, how it was overcome and, more importantly, to look forward to what might lay ahead for the region.

A Proactive Strategy for Operational Risk

Mon, 05 Jan 2009 05:24:59 GMT

NEWSFLASH: MILLIONS LOST FROM FRAUD AT (insert name of well known company here)!

In the past few years there has been an extraordinary rise in the amount of public and media focus on corporate governance and operational risk, or more specifically and headline catching - fraud! Why now?

Recent Trends in Asian Restructurings

Mon, 05 Jan 2009 05:24:20 GMT

Today, whilst liquidity levels are declining and even Ben Bernanke acknowledges that the United States is spiralling towards recession, the restructuring and corporate recovery market in Asia is still relatively quiet. Has the phenomenal growth in China and other parts of Asia made the region immune to US contagion or is Asia also slowly drifting towards the edge and into the unknown? Even though the restructuring market has been quiet, companies have still collapsed; some in sensational circumstances. The growth of distressed debt specialists and private equity players, the growing influence of China and Chinese business practices, the entrepreneurial spirit that drives the region and the influence of Western money are all playing a part in influencing the corporate restructuring landscape. In this article, we discuss some of the major recent trends in Asian restructuring and what to look out for in the next Asian downturn.

Airlines Experience Turbulent Times

Mon, 05 Jan 2009 05:24:07 GMT

Fasten your seatbelts ladies and gentleman, we are entering an area of turbulence.

Arguably no other industry has faced as much instability in the past decade as the aviation industry. After years of restructuring, mergers, opening up of new markets, the entry and growth of low cost carriers, the impact of events such as 911 and SARS, and now with an oversupply of aircraft entering the market and fuel costs spiralling beyond levels anyone could reasonably expect, the airline industry is once again at the crossroads.

In this article, we explore the issues that have shaped the airline industry in recent years and how airlines are battling to deal with a range of potentially terminal issues.

Corporate Governance – A Hong Kong Troubled Listed Company’s Perspective

Mon, 05 Jan 2009 05:23:52 GMT

Much has been written about the importance of good corporate governance in recent years but one wonders how much of it has really sunk in. Many companies seem to report on corporate governance so they can tick a box rather than because they truly mean it. Similarly, many lenders and investors focus simply on the financials, flicking right past all those pages of words at the beginning of the Annual Report to get to the numbers. In this article, we explore the practical side of corporate governance in action and if directors aren’t taking it seriously, then why lenders and investors should.

Using the right technology tools could save you a lot of money

Mon, 05 Jan 2009 05:23:05 GMT

The Companies Ordinance (Cap.32) in Hong Kong gives powers to a Liquidator to request books and records relating to a company from any party who may be able to assist the Liquidator’s investigations. The recent judgements of Kong Wah Holdings Limited (In Compulsory Liquidation) and Akai Holdings Limited (In Compulsory Liquidation) confirmed that section 221 of the Companies Ordinance should be given a wide interpretation so as to enable Liquidators to carry out their duties as effectively, quickly and economically as possible.

The Importance of Due Diligence

Mon, 05 Jan 2009 03:51:31 GMT

As a business destination, China has got it all. It offers one of the world’s largest consumer markets, provides manufacturers with access to a low-cost labor force and unlike many other Asian countries, possesses developed infrastructure and modern technology. However, the Chinese business environment is unique and a strong understanding of the jurisdiction is essential to ensure that risk is adequately addressed.

Preserved at what cost?

Mon, 05 Jan 2009 03:02:33 GMT

Jason Beckett, Senior Manager of Computer Forensics in our Sydney Office explains the dangers of a ‘Do-it-Yourself’ approach to preserving computer evidence.

For any assignment where computer evidence is involved it is important to be aware of the dangers in attempting to obtain computer evidence without using the right type of expertise.

Financial investigation to uncover Hong Kong securities dealing fraud

Mon, 05 Jan 2009 03:00:07 GMT

KW Chong looks at a recent investigation undertaken by our Hong Kong office.

The activities resulting in securities dealing fraud usually carry with them serious implications for both the duped investor and the individual(s) responsible for the fraud.

Closing the net on music piracy

Mon, 05 Jan 2009 02:41:38 GMT

Music theft on the internet is huge (estimated to cost the industry billions of dollars each year). Such piracy drains profit to the extent that the very viability of the industry is under threat. If unchecked this economic cancer could spread to other industries.

Jason Beckett (Senior Manager, Computer Forensics) is interviewed about his recent involvement in an investigation that has led to the World’s first criminal charges for music piracy. Jason’s background is in High Tech crime with the NSW Police.

Melbourne key expert testimony (and others)

Mon, 05 Jan 2009 02:41:14 GMT

Melbourne expert testimony key to biggest tax evasion penalty in Australian corporate history.

In Commissioner of Taxation v Australian Petroleum Supplies & Others, Bongiorno J imposed penalties relating to the evasion of excise duty totalling $53.4 million on the operators of a fuel distribution business.

Ferrier Hodgson’s Melbourne Forensic team were instrumental in analysing the documentary material commented upon in the judgement.

Ferrier Hodgson ups the ante in Asia Pacific

Mon, 05 Jan 2009 02:40:29 GMT

With large complex multi-nationals in Asia Pacific increasingly focused on minimising their exposure to fraud Ferrier Hodgson has recruited Paul Curby, arguably the best fraud risk management expert in the region, to capitalise on emerging opportunities.

‘Real Time’ Forensics

Mon, 05 Jan 2009 01:33:15 GMT

TV dramas have conditioned us to see forensics as an after-the-event form of sleuthing. The crime is discovered, the detectives arrive and then the forensic team is called in to search for those ‘just noticeable’ little clues that are cleverly traced backwards to recreate the scene of the crime – and provide evidence of who done-it. Often our work is like this. Sometimes it’s not.

The expert witness question

Mon, 05 Jan 2009 01:32:53 GMT

The legal system’s use of expert witnesses has increased to the point where a major review is called for to ensure that the system knows what it wants from expert witnesses and apply processes that facilitate (rather than impede) the satisfaction of those wants.

Kazaa made to face the music

Mon, 05 Jan 2009 01:32:32 GMT

In September KAZAA (the file-sharing online service used by millions to swap music) was ordered to stop the flow of illegal music on its system.

Australian Federal Court Judge, Murray Wilcox, ruled KAZAA had infringed music copyright and will be required to pay costs. Damages could be in the billions of dollars. Ferrier Hodgson Forensics played key roles in this watershed case.

From CBD high-rise to roadside investigations in PNG Highlands

Mon, 05 Jan 2009 01:10:59 GMT

Today’s forensic mastermind, we imagine, sits in an air conditioned, hi-tech offi ce in a CBD high-rise, in front of a powerful, networked computer that can plug into a stream of international transactions to capture near-as-possible, real time data. Close by, sit colleagues expert in corporate accounting, statistics and law – ready to help pattern, interpret and action our fi ndings. It’s a pretty dynamic (and flattering) image. As practitioners, we love it!

Eye on the Experts

Mon, 05 Jan 2009 01:10:40 GMT

Welcome to our last edition of Forensics@Ferriers for 2006. In this edition, we focus on developments in the area of expert evidence. We also profile the most recent addition to our Forensics team, Andrew Ross, one of Sydney’s leading forensic accountants, who shares his expertise through the summary of two recent cases in which the experts failed to deliver.

Avoiding equity wave wipeouts

Sun, 04 Jan 2009 23:24:22 GMT

Common sense and caution tend to be early victims in any type of financial boom. It is no different with the current private equity boom, which appears to have many people skimming over the due diligence details in the rush to invest their money.

And with no apparent end in sight to the wave of private equity deals washing across the globe, we thought it might be an opportune time to raise a cautionary tale: the case of ABRY Partners versus F&W Publications.

Fraud in the workplace: she did it!

Sun, 04 Jan 2009 23:23:34 GMT

When the topic of employee fraud or theft is mentioned, do you automatically imagine the perpetrator is a middle-aged male white collar worker? You wouldn’t be alone.

Indeed, results published in the Association of Certifi ed Fraud Examiners (ACFE) 2006 Report to the Nation on Occupational Fraud and Abuse found that more than 60 per cent of frauds were committed by men, mostly aged from 31 – 50, and mostly long-term employees (64 per cent were committed by employees with five or more years of service).

Digital theft – who is watching?

Sun, 04 Jan 2009 23:22:44 GMT

From the moment you wake in the morning until you retire at night, your movements and activities are being silently monitored. Almost everywhere you go and everything you do in the digital age leaves behind a trail of digital footprints – potential evidence of your presence or involvement.

Fraud on the Market – what role will experts play?

Tue, 30 Dec 2008 06:44:46 GMT

In the last five years Australia has seen an increasing number of shareholder class actions in pursuit of companies that allegedly failed to properly inform the market. Ion, Downer EDI, Telstra, Aristocrat and Multiplex have all faced this prospect.

With these cases has come interest in the US concept of “Fraud on the Market” – a theory that permits claimants to sue for damages without having to individually establish specific knowledge of, and reliance on, the company’s misrepresentations in making a decision to buy or sell.

Damages ain’t damages

Tue, 30 Dec 2008 06:44:15 GMT

Ferrier Hodgson’s forensic accountants are frequently called upon to provide advice to litigating parties on the quantum of damages from claims under the Trade Practices Act (“TPA”) and Fair Trading Acts (“FTA”) and to give expert evidence accordingly.

Standing together: Assisting the court with concurrent evidence

Tue, 30 Dec 2008 06:43:43 GMT

In Adelaide recently, the Australian Institute for Judicial Administration conducted a debate involving several medical experts, a judge and barristers. The forum debated the merits of using concurrent evidence, based on their experiences in a recent medical negligence case.

Staying Afloat on the Retail Wave

Tue, 30 Dec 2008 04:10:53 GMT

In this time of relative retail buoyancy, retailers can still find themselves in financial difficulty. James Stewart and Kevin Winterburn examine why.

Road Transport: Caught in the headlights of the heavyweights

Tue, 30 Dec 2008 04:10:11 GMT

Australia’s big trucking companies are enjoying a comfortable ride to prosperity on the back of an unprecedented economic boom, but not everyone is cruising in the fast lane. George Georges and Brendan Richards look at why some transport operators are having a bumpy ride.

Agriculture: When the growing gets tough…

Tue, 30 Dec 2008 04:09:56 GMT

Fruit growers have had it tough this year. From one end of the country to the other they have been constantly in the headlines: affl icted by frost across the Goulburn Valley, Yarra Valley, Sunraysia and the Coonawarra. Blown and battered by Cyclone Larry in far north Queensland. Decimated by citrus canker in Emerald. And all this whilst squinting into the face of a drought tipped by Federal Treasurer Peter Costello to be the worst this country has ever seen.

Property & Construction: Balancing on the balustrade in a softening market

Tue, 30 Dec 2008 03:43:48 GMT

The old adage – “those that fail to plan are planning to fail” – is particularly relevant in our current property market. With conditions tightening across the country – and with inexperienced developers continuing to make fundamental mistakes – it is likely we will see a continued increase in the number of property and construction related defaults over the next 18-24 months.

2007: The Australian Wine Industry’s “Annus Horribilis”

Tue, 30 Dec 2008 03:43:23 GMT

By all measures the 2007 vintage will be remembered by the Australian wine industry as the worst it has ever experienced. No wine regions were spared from the severe seasonal events as Mother Nature dealt out black frosts, drought and bushfires. For grape growers and wine makers it has been heart-breaking.

ISPs: Download with caution

Tue, 30 Dec 2008 03:43:04 GMT

Analysts expect 2007 to be a big year in the Australian telecommunications industry. This is to be The Year of Broadband as the number of subscribers hits 4 million, the Federal and State governments step up with a $5 billion infrastructure commitment and second and third-tier telecommunications providers take the fight to Telstra with threats to build their own high-speed network.

Debt versus equity: How much is too much?

Tue, 30 Dec 2008 03:42:48 GMT

One of the most important decisions facing any business is the need to balance the mix of financing between debt and equity. The dynamics of this combination will have a dramatic impact on the overall value of the enterprise.

In this article, in the context of a market where increases in interest rates are likely, we will examine the nexus between debt and equity and the pitfalls of being exposed to excessive debt structures.

Investing in Distressed Businesses

Tue, 30 Dec 2008 03:42:30 GMT

We are constantly approached by parties seeking to invest in distressed businesses, be it by way of acquiring debt, equity or assets.

A large number of investors are experienced in their approach, others see the opportunity, but lack the experience in assessing value and separating the wood from the trees.

In this article we present some practical advice on selection criteria and pitfalls to guard against when considering an investment in a distressed business. It is not intended to be all inclusive, but more as a basis of gaining an understanding of a number of the key issues that should be considered.

The Relevance of Business Strategy and Planning

Tue, 30 Dec 2008 02:56:43 GMT

“ The most important task is defining the course that the business will take over the next four or so years. You have to have the ability to see what the business environment might be like a long way out, not just over the coming months. You need to be able to both set a broad direction, and also to take particular decisions along the way that make the broad decisions unfold correctly.”

Chris Corrigan, CEO Forum

Enhancing Business Performance – a value-based approach

Tue, 30 Dec 2008 02:56:22 GMT

A common business error is to measure and manage performance based on short-term earnings. A better approach is to manage performance by linking it to value creation. A well-designed and executed performance-improvement program would spin off discrete business initiatives aligned to a key corporate goal – enhancing the value of the enterprise.

Equine Influenza: Is the carnival over?

Tue, 30 Dec 2008 02:55:41 GMT

By the beginning of October, the Equine Influenza (‘EI’) virus had infected more than 33,000 horses in NSW and Queensland, with the number increasing daily. For the Australian horse racing industry, the epidemic could not have hit at a worse time.

In the lead up to the Spring Racing Carnival – the time of year Australia becomes obsessed with horseflesh – some of the country’s best thoroughbreds remain captive to their home stables; unable to set foot on the racetracks where they earn their keep.

Cutting costs – No shortcut to success

Tue, 30 Dec 2008 01:18:52 GMT

There is change in the air. Despite the resources boom and unprecedented growth in prosperity in this country, the emergence of new sources of competition and increased costs which cannot be passed on to customers are likely to put the squeeze on corporate profit margins.

With boards and shareholders clamouring for better returns, we are expecting to see companies turn their focus once again to cost management. But history suggests a slash-and-burn approach without changing inefficient processes is a recipe for disaster.

In this article we are going to examine some of the common approaches to cost management and the reasons why they fail. We will look at the difference between perceived saving and real bottom line improvement and also suggest areas that may be fertile sources of sustainable savings.

Turning water into wine (but is it sustainable?)

Tue, 30 Dec 2008 01:18:24 GMT

Stretching 2,500 kilometres and snaking through some of Australia’s most productive farming country, the Murray River has for decades been an essential lifeline to this country’s premium wine producers. Every year, thousands of megalitres of Murray River water sustain the vines – and the grapes – of some of our most iconic Australian wine labels.

Inventory: Asset or Liability?

Tue, 30 Dec 2008 01:08:01 GMT

One of the most complex and neglected areas of operations is the management of inventory. While inventory is listed on the left side of the balance sheet as an asset when it is not managed properly it can be a liability.

Business in the era of the data room

Tue, 30 Dec 2008 01:06:31 GMT

Increasingly through Ferrier Hodgson’s work with companies looking to consolidate or offload various parts of their business, we are required to establish and control data rooms. In today’s business environment, decisions turn on the sort of confidential numbers that can never be made public information. As a result, controlling the establishment and management of the data room and access to confidential information can be crucial to a successful due diligence or sale campaign.

Fool’s Gold: Kleins fortunes doomed by failure to reinvent

Tue, 30 Dec 2008 01:06:18 GMT

After 26 years as one of the most recognisable and accessible jewellery and accessories chains in Australia, Kleins will close this month.

This is hardly surprising, given the current volatility in the sharemarket, the impact of the credit crunch, rising interest rates, record petrol prices and a decline in consumer spending. Indeed, given those market conditions, it may appear inevitable that some retailers will go to the wall.

But the reality is these are not the key reasons for the Kleins collapse. Indeed, while market
conditions can clearly impact retail performance, they are not the threshold reasons why
retailers fail.

National growth engine sputters: out of gas

Tue, 30 Dec 2008 00:14:15 GMT

While the state of Western Australia mops up the short-term damage caused by the Varanus Island gas explosion on June 3, the medium and long-term fall-out of this disaster is just starting to be calculated.

The explosion cut 30 per cent of WA’s domestic gas supply, forcing businesses across all industries to operate on a limited gas allocation. West Australian households have been urged to reduce their gas consumption in order to increase the supply available for industry.

Gas is WA’s principal source of energy, accounting for 60 per cent of the state’s energy supply (coal accounts for 35 per cent). Apache Energy, the owner of the Varanus Island plant, estimates it will take until the middle of August to restore just 57 per cent of lost supplies. The plant is not likely to be returned to full operating capacity until December.

Highway to Hell? Rough road ahead for trucking industry

Mon, 29 Dec 2008 05:50:23 GMT

The world has been travelling a rocky road during 2008. Oil is at record highs. Interest rates are up. Food prices are rising. All that is bad enough, but for those operating in Australia’s road transport industry there are a handful of speed humps looming that will test even the most experienced operators.

The skilled driver shortage and the introduction of legislation regarding carbon emissions trading
and driver fatigue will all add to the existing pressures on road transport operators. Their ability
to identify, quantify and pass on these costs will be a key factor in deciding which operators
survive… and which end up broken down wrecks along the side of the road. Critically, the role of
the Operations Manager will become more important than ever before as the arbiter of margins
and profitability.

A key indicator for the future of the sector was Kenworth Trucks’ announcement this week that it will
sack more than 80 workers, blaming the slowing economy, high fuel prices and interest rates.
The company has already cut 380 contractors since last year and production will drop from 23 trucks
a day to just eight.

A little knowledge is a dangerous thing

Sun, 23 Nov 2008 03:27:05 GMT

When the other side’s expert is also a trade rival, can you withhold commercially sensitive information?

Two recent cases have considered under what circumstances confidential information must be disclosed to an expert. Both these cases concerned plaintiffs who claimed possession of unique technology which, they insisted, must remain completely confidential from the other side’s experts who may have been trade rivals.

Brave new world for secured creditors

Sun, 23 Nov 2008 03:26:44 GMT

The business environment has changed significantly for banks, financiers and other secured creditors since the end of 2007: record petrol prices; access to and cost of funding; spiralling interest rates and declining business and consumer sentiment have put the market on edge. It is an environment more influenced by fear than it has been for decades.

Navigating uncharted waters for secured creditors

Sun, 23 Nov 2008 03:26:31 GMT

The credit crunch and the market downturn form just part of the changed business environment facing banks, financiers and other secured creditors in the second half of 2008. As identified in the last issue of Recovery@Ferriers, there have been significant structural changes as well – such as major amendments to the Corporations Act and the introduction of the IPA’s Code of Professional Practice.