The legal row involving deceased CFC Group boss Marc Cardaci’s trusts continues with two companies slated to be wound up if $4.6 million is not repaid.
The legal row involving deceased CFC Group boss Marc Cardaci’s trusts continues, with two companies slated to be wound up if $4.6 million is not repaid.
Companies Rectangular and Washburn were once trustees of Mr Cardaci’s trusts, reportedly valued at $40 million.
The companies launched legal action against Marc Cardaci Testamentary Trust and Washburn Trust in the Supreme Court of Western Australia earlier this year, with a hearing before Justice Michael Lundberg today.
Mr Cardaci’s widow, Mae, was appointed as trustee to his trusts over his brother Philip, following years of legal proceedings, in December 2021.
However, the matter continued in the courts when Supreme Court Justice Rene Le Miere last month ruled that money from the Marc Testamentary Trust should not be used to fund Rectangular and Washburn’s legal fees.
Rectangular and Washburn were controlled by Philip Cardaci, according to earlier Supreme Court judgments.
Supreme Court registar Brendyn Nelson then ordered Rectangular and Washburn to repay the $4.6 million used to fund the case to the testamentary trust in December.
The decision revealed more than $1.79 million from the Washburn Trust and about $2.2 million from Marco’s Testamentary Trust were used for legal fees, mostly paid to law firm Bennett + Co, and accountants EY and Brentnalls.
Statutory demands to repay by a certain time or wind up the company were reportedly issued to Rectangular and Washburn soon after last month's judgment.
Rectangular and Washburn, represented by Martin Bennett, sought for the statutory demands to be set aside.
At a WA Supreme Court hearing today, Mr Bennett said the two companies were assetless and could not pay the debt.
"Winding up these companies does not secure payment," he said.
Mr Bennett also told the court an appeal was ongoing and the outcome could erase the debt.
Mrs Cardaci's lawyer, Eric Heenan, said there wasn't a single decision where a statutory demand was set aside because of a pending appeal.
"This case is squarely in that category," Mr Heenan told the court.
Justice Lundberg is expected to deliver a judgment on Friday afternoon.
