Unpicking Russell Keddie's bankrupt estate

There's another $1.7 million in Keddie assets that trustee Max Donnelly might get his hands on … Prospective dividend at the moment from estate stands at 25 cents in the dollar … More fees for Ferrier Hodgson … Full report to creditors from trustee 

Sarah Key: suddenly had about $4 million of Russell's assets, without consideration

MAX Donnelly, trustee for struck-off solicitor Russell Keddie's estate says that, prima facie, there have been transfers of assets by the bankrupt that "appear to defeat creditors". 

Donnelly is seeking advice whether he has a caveatable interest in those properties. 

Last July Keddie transferred his half-share in a Double Bay home and Bungan Beach weekender, conservatively estimated to be worth $6 million all up. 

Russell's share in the properties was transferred to Sarah Kay, his wife, "without monetary consideration". 

In his preliminary calculations Donnelly, from Ferrier Hodgson, has factored into his dividend calculations clawing back from the property transfers at least $3 million. 

Keddie has disclosed creditors of $18.5 million and there are realisable assets, at this stage - including the transferred portions to his wife, of $4.5 million. 

Donnelly's preliminary calculation is a dividend of 25 cents in the dollar. 

Thanks Russell. 

By far the biggest group of unsecured creditors are successful claimants with verdicts against the Keddies' partnership of $11.5 million. 

There is another $3.6 million of "related party debts", probably legal costs. 

There's unpaid income tax of $2.8 million, and a costs order in favour of the Legal Services Commission of $275,000. 

The other significant debt is a $240,000 personal guarantee to the landlord of the former premises of Keddies law shop. 

Russell disclosed that he has $1.1 million cash in the bank, including $111,595 in a joint account with former partners Tony Barakat and Scott Roulstone. 

Donnelly might also be able to get his paws on another $2 million plus. This includes $421,497 that seems to be owed to Russell by Sarah, following the winding-up of the partnership that ran their cattle business in the upper Hunter. 

In July last year, during his hectic divestment of his fortune, all the assets of the Fernleigh Partnership were shifted from Mr to Mrs Keddie and Russell was not paid any consideration a cent. 

Sarah could also owe to the estate another $800,000 for Russell's cows that were sold through something called Keddie Pastoral with the proceeds flowing to his physio wife at another entity called Fernleigh Enterprises. 

There is also another $300,000 that was advanced by Keddie to a company that extended loans to the other Keddies' partners - $1.5 million to each of Barakat and Roulstone. 

Keddies Pastoral also owns livestock with an estimated value of $534,000. 

Russell has another $5 million in super and endowment insurance policies. 

He expects to live on a pension from his super funds for the duration of his bankruptcy. 

Donnelly thinks that about $450,000 paid into his super fund in July last year appears to be aimed at defeating creditors. 

Keddie is also a unit holder or beneficiary of trusts whose value totals $12.8 million. 

From the sale of Keddies to Slater & Gordon in January last year for $32 million, it seems that Russell received net proceeds, after discharge of business debts and distributions to other partners, of nearly $6 million. 

He also sold his Bentley in September 2010, but there was a shortfall on the hire purchase agreement. 

In all if you add $421,497 for the transfer of his share in the cattle enterprise, plus $800,000 for the proceeds of cattle sold, plus the $450,000 lump sum shuffled into the super fund, then Max may be able to get his hands on an extra $1.7 million - on top of the claw-back from the dodgy transfers of the domestic real estate. 

That might bring disposable assets up to just over $6 million, or a dividend of about 33 cents in the dollar. 

Here's Ferrier Hodgson's report to creditors in full.