Huon workers at mercy of disgraced Sims Partners

Faltering Victorian Car parts maker Huon Corporation’s fate lies with Sims
Partners, an insolvency firm with a tainted history of fraud, theft and a $5.24
million debt owed to a mismanaged bankruptcy.

Hundreds of Huon workers are concerned over $30 million in employee
entitlements.

The future of Huon’s major customers Australian car
manufacturers Ford and Holden is also at stake and the security of forward
contracts sought by Sims Partners.

Sims Partner’s director Tony Sims was appointed insolvency administrator of
Huon.

Sims, named his company Sims Lockwood after himself and his former partner
David Lockwood but renamed the company Sims Partners with the bankruptcy of his
other half.

Sims’ partner David Lockwood was bankrupted in 2004 for grossly mismanaging a
bankruptcy under the firms control and on his statement of affairs listed his
partnership assets as being worth $5.24 million.

Sims has not paid the $5.24 million of the $6 million owed to creditors of
F&T industries from a bankruptcy mismanaged by his firm. The bill was run up
by his firm.

But in the same year that Sims’ partner Lockwood filed for bankruptcy, Sims
changed the name of his company to Sims Partners and boasted a record $14
million plus profit.

Within a matter of months David Lockwood would have served his three years in
bankruptcy.

Sims will not have paid a cent to the creditors who lost $6 million when
F&T industries continued to trade under Sims and Lockwood’s care.

Sims Partners have also been accused of conspiring to extort money from
directors of dozens of small family owned companies.

ASIC concerns are that Sims partners systems were not adequate to prevent, or
detect in a timely manner frauds on insolvency administrations.

Herald Sun Friday May 14 2004 page 82
“Insolvency specialist David
Lockwood better known as one half of the former Sims Lockwood is facing a
bankruptcy petition linked to $6 million in debt he alleged accrued while acting
as the receiver for F&T Industries”

Business Review Weekly May 27 2004, page 18
“In the belief that F&T
would be sold he kept it trading long after it could not pay its debts.”
“In
his statement of affairs Lockwood has listed his partnership interest at Sims
Lockwood as an asset worth $5.24 million.”

Business Review Weekly November 20 2003 page 20
“As receiver Lockwood
became liable for all debts. He kept the company trading and debts rose to $6
million, including a huge bill to the tax office for pay-as-you-go income tax
deductions.”

Business Review Weekly May 15 2003 page 24
“F&T industries racked up
debts believed to be about $6 million after Lockwood was appointed receiver and
manager in 2001
“One small-business owner John Whiting Plastics said he has
received one small payment since October towards the $300,000 he is owed.
“As
receiver he guaranteed payments so we kept supplying raw materials.
“You
would have to think again about supplying raw materials when a receiver is in
control and this sort of thing happens.”

Business Review Weekly June 12 2003 page 70
“When Lockwood joined the
firm’s Melbourne office in 1993 the firm’s name was changed to Sims Lockwood to
give David some profile, says Tony Sims. Lockwood became managing partner in
1998.”

Herald Sun 28 May 2004 page 75
“Creditors of high profile liquidator David
Lockwood have been told they will get as little as one cent in the dollar if
they bankrupt him.”

The Australian August 2, 2005 page 23
“Three members of Sydney insolvency
firm Sims Partners have been accused of conspiring to extort money from
directors of dozens of small family owned companies by threatening them with
insolvent trading suits.
“Sims Partners staff threatened directors for
insolvent trading before ensuring that the company was unable to pay its debts
when they fell due.
“Sworn statements from two witnesses saying Mr Topp had
outlined the scheme used by Sims against other directors at a seminar for
lawyers and accountants working in the insolvency field.”

(A federal court was told two company directors were threatened by Sims
Partners)
The Australian August 2, 2005 page 23
“Your company was wound up
because it didn’t pay its workers compensation insurance. The liquidator can
force you to sell your house to pay the bills of the company. You guys had
better cooperated. You have three options, you can pay $25,000 tomorrow, $50,000
next week or if you do not pay $50,000 within a week then the amount you have to
pay can go up to $100,000 and we can sell your house to pay everything. The
insurer alleged Gypset had $6190 in outstanding premiums”

Australian Securities and Investment Commission website 24 October
2005
“ASIC concerns are that Sims partners systems were not adequate to
prevent, or detect in a timely manner frauds on insolvency
administrations.
“A former senior employee stole approximately $372,000 from
bank accounts operated for a number of administrations under the control of
partners.
“ASIC was also concerned that as a consequence of the frauds, forms
lodged with ASIC in respect of the affected administrations were incorrect.”

(Sims Partners David Leigh had been appointed receivers of a partnership
between a father Mervyn John Ide Senior and son Mervyn John Ide junio and
attempted to bill a father for Sims Partners time as police witness to the
murder of his daughter)

Sydney Morning Herald
“The accountant witnessed Mervyn John Ide junior
shoot his sister Karen Fallon dead. Leigh subsequently tallied up the hours
spent assisting police with investigations that led to Ide being convicted and
jailed for the shooting murder. The billable time spent on the case came to
$20,457.20.
“Before Leigh even presented his bill Ide senior asked for a
court ruling on whether such activities were billable”.

(Tony Sims is director of Portfolio Management Group.)
( The major
shareholders in PMG are the insolvency firm Sims Partners.)

Sydney Morning Herald November 15 2004
“Officers from the ICAC’s Operation
Argus executed a search warrant on the O’Connell Street offices of the Portfolio
Management Group PMG last Friday. Boxes of documents, computer hard drives and
telephone records were taken away. A senior employee of PMG has told the herald
that the company had illegally obtained information on
debtors.”

Global Engineered Fasteners (GEF), supplies GM Holden, Pacifica
Group and Textron, among others, with nuts and bolts for engines
and suspension parts as well as fasteners for other parts of a
vehicle. It was formerly known as Ajax Fasteners.

GEF ran into trouble barely a week after Huon Corporation was
hit by a strike after claiming it could not pay workers their
retrenchment entitlements. Huon owns Empire Rubber and Mills
Elastomers, which Nylex sold in November 2005.
http://www.theage.com.au/news/business/more-bad-news-for-local-automotive-industry/2006/08/07/1154802820262.html

+++

THOUSANDS of car industry jobs hinge on meetings in Bendigo and
Frankston this morning.

At the meetings, 500 striking workers will consider a deal that
may prop up their struggling car parts company, but it gives no
guarantees that they will ever see $30 million in pay entitlements
owed to them.

Striking workers for Huon Corporation will be briefed on a
rescue package in which Ford, Holden, Toyota and other big players
commit to three months of orders for the rubber parts that Huon’s
workers produce.

They will offer to pay a 35 per cent premium on the parts to
keep Huon’s Bendigo plant, Empire Rubber, in production and avoid a
disruption that could shut down local car production.

The money would be used to keep Empire operating so it could be
sold as a going concern, Huon administrator Tony Sims said
yesterday. It would not fund the shortfall in workers’
entitlements, which prompted the walkout nine days ago, but would
“minimise redundancies and maximise the number of jobs that will be
retained”, he said.

“The crucial thing is, if we don’t have people back at work this
week, we don’t have a business to sell.”

Unions will take a letter from Mr Sims to this morning’s
meetings. It will explain that “currently there is no cash to pay
anyone redundancies, which is regrettable to everyone — it is
not their (the workers’) fault”.

Huon Corporation went into voluntary administration last month.
Last week its administrators sought to make 122 workers redundant
without paying them $5 million in entitlements.

A similar figure will be owed to 180 workers at the Frankston
operation, who are expected to lose their jobs next month.

Workers at Huon’s three factories went on strike before the
redundancies could be announced.

They are seeking the return of company assets — two
properties worth $10 million — allegedly stripped from Huon by
its managing director, John Schultz. Action taken by the
administrator over the properties will return to the Supreme Court
tomorrow.

National Union of Workers state secretary Anthony Thow said he
would tell the workers that the proposal to lock in to three-month
supply contracts was inadequate. The union had sought 12-month
contracts.

On the question of workers’ entitlements, “the car companies had
basically said ‘not our problem’. Well, whose problem is it?”

The Australian Manufacturing Workers Union was also disappointed
in the offer. Assistant state secretary Steve Dargavel said there
was a real possibility that the workers would be abandoned once the
car companies had time to replace their product with something from
overseas.

Forty-five workers at Huon’s Dandenong subsidiary, Mills
Elastomers, returned to work on Friday after a deal between unions
and the administrator, who will try to sell it as a going
concern.

Ford spokeswoman Sinead McAlary said yesterday that decisions
about whether to prolong the stand-down of 2000 workers at
Broadmeadows today — and to extend it to 2000 workers in
Geelong — would depend on the meetings.

Holden and Toyota were also monitoring the situation.
http://www.theage.com.au/news/national/car-jobs-in-jeopardy-as-strikers-meet/2006/07/23/1153593211572.html

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