BestJet collapse: Former bankrupt ran business
A DIRECTOR of a failed online booking company allowed a former bankrupt to run the day-to-day business after learning he was previously disqualified from managing corporations.
Robert McVicker told a Federal Court public examination by liquidators into the affairs of BestJet he did not know of Michael James's disqualification before he became its director.
Michael James's wife, Rachel James, sold BestJet to McVicker International just six weeks before it went into voluntary administration.
Once good friends while working for Ansett, Mr James was Mr McVicker's best man at his wedding and he was in Mr James's wedding party, the court heard.
Mr McVicker said just before BestJet went into voluntary administration "there was a complete erosion of trust'' in Mr James and he had not spoken to him since.
Mr James, who helped run Air Australia, which folded in 2012 leaving almost $100 million in debts, was disqualified from managing corporations for three years from 2013.
Mr McVicker likened the BestJet sale agreement, negotiated between his father, Robert McVicker senior, their accountant and Michael James, to a "Shark Tank or Dragon Den'' style arrangement.
"We could use our expertise to grow the business,'' Mr McVicker junior said.
He said Michael James had approached his father, a successful entrepreneur across a range of businesses, for his mentorship.
When asked whether Mr James should have been allowed to run BestJet's day-to-day business, given his history, Mr McVicker referred to his very successful lifestyle.
He said Mr James had a house worth up to $2.5 million, he drove a Mercedes and a Porsche Carrera collector's model and had just bought a $200,000 Tesla model x car.
Mr McVicker said Mr James also had a big American utility and a V8 supercar racing utility.
"Michael James was a one-man band, essentially … It was clearly him and only him who understood the business and ran the business,'' Mr McVicker said.
He said the business failed because it did not receive a $3 million debtor payment that Mr James assured him was coming from BestJet Singapore.
He said there was $6 million due to be paid and only $3.6 million in the bank.
"I was panicking. I was seeing being held accountable for something I didn't do … being blamed,'' he said.
"If the $3 million didn't come through on the Monday, we wouldn't be able to pay that bill.''
Mr McVicker said "the nail in the coffin'' was when Mr James loaded $900,000 worth of outstanding invoices to be paid. "It was quite a shock,'' he said.
Robert McVicker senior said by December 15 he and his son were both chasing Mr James over the $3 million, but in the end Mr James just stopped answering.
"At that stage I was thinking if he doesn't send the money he's screwed the company and screwed us and screwed himself,'' he said.
The public examination continues.