Mossgreen administration costs rise as court judgements sought

Mossgreen administration costs rise as court judgements sought
Mossgreen administration costs rise as court judgements sought

The besieged administrator of collapsed auction house Mossgreen is seeking court orders to justify its controversial $353 collection levy.

Mossgreen clients and buyers were advised it would continue to hold onto the artwork and collectibles subject to court orders.

BDO has also extended the time for payment of the levy and collection of items from March 10 to March 29.  

The Australian Financial Review reported ASIC made initial inquiries to BDO about the imposition of the levy after complaints from clients.

A BDO spokeswoman confirmed BDO was "in dialogue with ASIC".

"ASIC has not raised any concerns in relation to the administrators' conduct," she said.

"The court will be asked to make directions and orders in relation to the rights and entitlements of creditors and other stakeholders in goods and funds held by Mossgreen.

"Directions will also be sought in respect of the levy that the administrators have charged," she said.

There were 4322 lots remaining, with the levy set to raise a total of $1.5 million.

If the court decides the levy is excessive, BDO will refund any difference between the levy and the administrators' reasonable costs, the spokeswoman said.

BDO administrator James White said the amount of the levy was "not negotiable" as "shortfalls risk further losses to the company and its creditors".

He said the costs include wages, rent, security, insurance, legal fees and administrators' time costs and disbursements.

Clients are frustrated about the levy as it is often more than the value of the item.

Creditors have been concerned at the likely costs in seeking various legal judgements too.

The Victorian Minister for Consumer Affairs Marlene Kairouz said would be consulting with the Commonwealth about whether regulations need tightening.
Clients who consigned multiple items are being billed thousands of dollars.

"I think it's highway robbery," Tom Lowenstein, the high-profile accountant who helps manage the affairs of artist Charles Blackman told the AFR.

Blackman handed 25 drawings to Mossgreen last year for an auction that was due to occur this month.

Some 4000 Mossgreen clients whose goods were auctioned are owed $6.8 million.
Tags: 
Asic Mossgreen

Comments

Be the first one to comment on this article
What would you like to say about this project?