MORE than a year after the collapse of the Allco Finance Group, former key executives and their relatives continue to have a hand in deciding the future of some of its assets.
Allco's receiver has identified the use of off-balance-sheet structures that potentially allow the former head of its aviation business David Veal and Geoffrey Kinghorn, the son of Allco founder John, to have a say in determining management of leasing companies controlling two aircraft. Management of the two aircraft is potentially worth millions of dollars over the life of the planes.
Allco receiver Peter Gothard, of Ferrier Hodgson, began legal action this month trying to restrain Mr Kinghorn jnr and Mr Veal from appointing as the manager of the special-purpose vehicle any entity in which Mr Kinghorn, Mr Veal or Mr Kinghorn's father has a financial interest.
Adding to the intrigue, Mr Veal and Mr Kinghorn jnr have set up another management company, KV Aviation, and have hired former Allco staff.
The situation arises from the way Allco structured its business. While Allco used a typical off-balance-sheet structure to ensure its financing was non-recourse to the Allco mother ship, unorthodox structures have been identified in how some of the satellite companies were set up.
