The liquidator appointed to the AAA FI case, Bradley Tonks of Lawler Partners, revealed that as part of the administration process, TAL Life purchased the asset base of AAA Wealth Intelligence (AAA WI), an AAA FI entity that is not in liquidation.
According to a letter from the liquidators to creditors in March, obtained by InvestorDaily, AAA WI is a “debtor for the amount of $60,172.85”.
The letter explains that the liquidators had received “two offers for the purchase of the company’s interest in [AAA WI], which involve repayment of the AAA WI debtor” and that they would “update creditors on the sale accordingly”.
Speaking to InvestorDaily, Mr Tonks confirmed the sale had now been completed and that insurer TAL Life – which already held a stake in AAA WI – is the debtor referred to.
“There were dealings between the shareholders of AAA Wealth – in which AAA FI was one side and TAL the other – and a resolution was reached which enabled AAA FI to extract most of its interest from AAA Wealth,” Mr Tonks explained.
“There are inter-company loan accounts between the two entities and they have now been resolved,” he added. “The debtor didn’t buy out AAA FI’s stake, they purchased the asset base out of that entity, so essentially, it was a transfer of client book.”
A former AAA FI authorised representative, speaking to InvestorDaily on condition of anonymity, says the company’s creditors – which include a number of former advisers – were told that the client book was sold “for the amount of debt owed to the debtor”, which would suggest TAL had paid $60,172.85.
The aggrieved former adviser – who is among a number of former authorised representatives claiming outstanding commission payments from the collapsed licensee – says the true market value was “at least $200,000 to $400,000”.
“If they had sold at the proper value maybe they’d be able to afford to pay us back our owed commissions,” the former authorised representative said.
“But they chronically under-valued it, made a quick buck and then said they had no money to pay outstanding debts to clients and advisers.”
However, Mr Tonks disputes the idea that the deal was not reflective of market value.
While he says he does not recall the exact value or structure of the deal, the liquidator explained that on top of the cash component the deal contained “other considerations” and that the dollar value of the deal should not be taken out of context.
“I was satisfied that the consideration that paid for the transfer of the book was a good market value,” Mr Tonks said. “I’m not sure if the cash figure was $60,000 but there were certainly other considerations as part of that deal.”
