High-profile bankruptcy: the hunt for hidden assets

Handling high-profile legal cases can make or break an adviser’s reputation: just ask Robert Kardashian after the O.J. Simpson trial. But behind the headlines lies a complex and often frustrating reality, as Jirsch Sutherland partner Malcolm Howell knows all too well.

Some years ago, Howell was appointed Bankruptcy Trustee of the bankrupt estate of Roberta Williams – widow of notorious Melbourne crime figure Carl Williams – following a case initiated by the Australian Tax Office (ATO). The Federal Court declared Roberta bankrupt in November 2016 over nearly $300,000 in unpaid taxes. What followed was a difficult and protracted effort to track down her assets and financial affairs – with plenty of roadblocks along the way.

Taking on the case

Initially, the case was handled by the Australian Financial Security Authority (AFSA) as the Official Trustee. However, under the Bankruptcy Act, certain cases can be transferred to private trustees – which is how Malcolm and Jirsch Sutherland came to be involved.

“There was an issue involving a house,” Howell explains. “Roberta was making claims on behalf of her daughter with Carl for a share in a property held by the late George Williams. AFSA transferred the case to us to investigate Roberta’s financial affairs and locate any assets held by her or on her behalf.”

The challenge of cooperation

Howell’s task was far from straightforward. Roberta repeatedly failed to provide legally required information about her income, assets, and debts. And getting answers proved difficult.

“This case was a bit different because it was impossible to get Roberta to engage,” he says. “My job was to pick up where AFSA left off – to gather up all the assets, cash, businesses, cars, and property connected to the bankrupt and figure out where the money went.”

Howell suspected that Roberta had assets – but not in her own name. “I believe some assets were held by others on her behalf,” he says. “But without funding, it was incredibly hard to take the next steps.”

The funding barrier

Funding is a key obstacle in cases like this. Howell explains that without money to investigate and pursue assets, options are limited. “In situations like this, you can apply to the ATO for funding – but the criteria are incredibly stringent. You need to show that you’re pursuing a specific asset or property that will deliver a return.”

Because the funding criteria couldn’t be met, the case essentially reached a standstill. Howell filed an offence referral with AFSA due to Roberta’s lack of cooperation, but the next steps were unclear.

“I sent notices, left phone messages – all ignored,” Howell says. “Without funding, I wasn’t able to compel her to cooperate or launch a public examination to gather the information we needed.”

The realities of high-profile cases

Howell has handled complex cases before – including those linked to underworld figures and even suspected terrorism cases. “You don’t seek them out, but when they come up, you have to deal with them,” he says.

The biggest hurdles are often the same: lack of cooperation and lack of funding. “If I had the resources, I could require people to attend court for public examination and produce key documents,” he explains. “But without that support, there’s only so much you can do.”

Howell adds that, “Funding is a crucial part of these types of matters, allowing us to ‘chase rabbits down the hole’ – in other words, to carry out thorough investigations. However, in such cases, creditors and regulators are often reluctant to commit more funds unless it’s in the public interest or there’s a clear path to recovering an asset.”

For Howell, the work continues — even when the answers remain just out of reach.