Liquidation, page-27

2.2.1. Issue 1:UnacceptableCoercion and Control of Moreton Resources Limited (MRL) by Feitelson Group,Colin Biggers & Paisley and Cor Cordis since 8 June 2022.

On 8 June 2022, a newly appointed Board acting withthe authority afforded under the CA s198G(3)(b) and (4) being subject to a Deed of Company Arrangement (DOCA), sort to commence and undertake its statutory duties required as Officers of MRL, and to protect and promote the interest of MRL, its members and creditors above all others. Since that time, it has been subject to attempted coercion and control events, purportedly reliant upon a security interest asserted by the FG. The events of the last 4 weeks have seen representatives of the FG of Company’s, being CBP and CC seek to control the Company upon the premise of an anti-competitive lock up device, that was purportedly entered in November 2019. In June 2020 this device has come to light which to date has been unknown to the market, regulators, members or creditors which effectively gave the FG control of the Company since that time, which has been identified in the last 4 weeks. That matters however are matter for referral to ASIC and other regulatory bodies given the substantial and significant concerns in breaches of duties to which ASIC and ASX should be privy, and seek to act given the powers vested from the CA and ASIC role, given the obligations of overseeing the ASX listing rules by ss793 and 1101B of the CA. It is clear there are multiple and sustained breaches of the listing rules. This is clear by the contemporaneous evidence outlined in the chronology.

The specific issues before the Takeovers Panel, areto remove the suppressive, coercive and controlling conduct of the FG, CC and CBP to allow the Board to undertake its statutory duties and advancements in the interest of all members, creditors, third parties and regulators. Therefore, the Board seeks the intervention of the Takeovers Panel, to determine unacceptable circumstances pertaining to the recent control events since 8 June 2022, relying upon conduct contrary to s657A and the intent of s602 of the CA. Not only has that lock-up device and uncommercial loan facility controlled the entity since November 2019, to June 2020, it now purports to control and substantially impact the Company’s ability to operate in June and July 2022.

Events of note:

10 June 2020 MRL entered administration and subsequently liquidation over seen by David Orr and Grant Sparks of Deloitte

25 May 2022 CC purport to be appointed ‘Receivers’ and notify ASIC under form 504 outlined under s427(1) purporting to be appointed under an instrument. Having identified themselves as being appointed as ‘Receiver of the property described in the Schedule to this form’. (this purported appointment is in breach of s436C of the CA)(there is also a technical argument the appointment is further invalid under s418(1) being CC claim to be secured/priority creditors under the purported security agreement, given their substantive debts and claims in ‘Receivership’ of MRV Metals Pty Ltd, thereby purportedly binding MRL to that security/debt, which in turn is prohibited for CC to act as Receiver under s418(1))

07 June 2022 After a meeting was called by Deloitte, at a creditors request, the Company was brought back from Administration and from 3 May 2022 by David Hambleton and Kaily Lyn Chua as Administrator from Rodgers Reidy. They undertook final creditors vote upon the proposed DOCA on 7 June 2022 which successfully placed the Company into a Deed of Company Arrangement.

8 June 2022 On 8 June 2022, a DOCA was executed, and a copy was lodged with ASIC on Form 5047. This through sections 198G(3)(b) and (4) gave right to the newly appointed Board to undertake the remit and duties prescribed under the CA as of this date. This also gave effect to s444D and s444G of the CA.

13 June 2022 The Board notified CBP on this date of concerns it has, as to the fact it owed fiduciary duties and obligations to MRL, yet appeared to be acting for Feitelson Group and in doing so, information and duties owed were seemingly compromised and being exploited for the benefit of the Feitelson Group.

13 June 2022 The Board sort to notify CC of its concerns as to the appointment as at 25 May 2022, on the basis the Board was in possession of documents and binding legal agreements which would put significant doubt upon the appointment of CC and the legitimacy of the purported securities held by FG.

In addition to this under s70-45 as a major creditor of MRV Metals Pty Ltd, the Board requested documents and records pertaining to the almost $3,000,000 spend incurred to pursue what at best appears to be a $205,000 debt to PAF.

14 June 2022 The Board sort to request the client files of MRL to be returned immediately from CBP and also all prior Board Members whom had operated through the period of Nov 2019 to June 2020.

17 June 2022 A letter from CBP was furnished stating the rights of the Board were suspended and hence they refused to comply or recognise the rights of MRL, they relied upon s198G(2) of the CA to make this assertion along a document, referred to as ‘Secured Debenture Deed’ and also clause 2.3(a) of the DOCA.

Further to this, the letter contained threats and intimidatory tactics by language and conduct, including referring to 198G(2) stating the Board were acting contrary to the CA.

17 June 2022 A letter from CC arrived to the newly formed Board stating, that again under 198G that the Board has no power, and the appointment of Receivers including the DOCA with reliance upon 2.2(b) and 2.3.

They also seek to assert the Board is acting contrary to the CA under 198G(2).

20 June 2022 A letter from CC outlining they are appointed as Receivers as at 25 May 2022 and as such, make certain demands and statements being:

§ The powers of the Board are suspended

§ As Receivers they have the right and Managers ofthe Company

§ They then seek to control, coerce and limit theability of the Board to undertake their statutory duties under the CA.

Since that time, CBP and CC purportedly acting upon a directive by Melgear, the same FG associate that made an undisclosed takeover bid in April 2020, aided by CBP and non-disclosed to the market. Purportedly relying upon the PAF security which was waivered by an indemnity agreement to the Company, against any such liability for/or owing any such obligations to PAF, therefore are acting contrary to the rights of MRL, the Board, its members, creditors and others. The Company has significant and urgent matters to attend to, and this conduct and control is placing significant concern on the ability to:

- Investigate and referral Directors, Shareholders and Creditors to therelevant regulators

- Undertake significant and critical negotiations as to key assets of theCompany that remain and are under threat of forfeiture

- Progress and proceed with significant negotiations with the ATO, AI andlegal firms pertaining to the rights of MRL in historic claims and moneys owed

- Limiting and ceasing any prospect of financial loans and funds beingmade available for MRL to advance as a Company as defined by the CA.

It is clear already that CBP and CC have made representations to third parties to the detriment of MRL seeking to limit the authority, operability and therefore any success of MRL surviving as a Company.

Attempted Control and CoerciveConduct

It is clear from the conduct, the demands and oppressivecorrespondence there is no regard for the rights of MRL or the law. This includes as outlined, CBP and CC making representations to third parties as to their view that Board has no power and can not act. Whilst at law each of these matters can be dealt with and resolved through simple reference to the CA, it is the continued and persistence oppressive behaviour that seeks to purport to be done with the authority of ASIC as registered liquidators and purported legal representatives of those registered liquidators, that MRL seeks a declaration of unacceptable circumstances for, to allow the Board to undertake its statutory obligations and functions to protect the Company and its members.

As a matter of law, the purported appointment on 25May 2022 of a Receiver by a purported creditor, to which both CC and CBP seemingly rely (which is the basis of the coercive and controlling conduct) is contrary to the CA under 436C and possibly 418(1). In fact, such an appointment would be prohibited and hence at law, there is no appointment of a Receiver over the interest of MRL, as purported by the FG, whom specifically used ‘Melgear’, whom is the alleged appointed to make a unsolicited and undeclared to market takeover attempt in March-April 2020 of MRL. On 15 July 2020, Mr Grant Sparkes and David Orr were appointed Liquidators of the Assets and Companies of the Moreton Resources Limited Group and that remains in place until such time as application to the Court is made to remove such wind-up proceedings therefore prohibiting the appointment as Receiver. Furthermore the appointment is contrary to s418(1) protections being a creditor of MRL is conflicted and therefore is not qualified to be a appointed liquidator. In fact it is an offence against the CA to do so, which in the circumstance, we have a ‘Receiver’ purporting to be owed a undisclosed sum, whom has run up significant fee’s and charges to which they purport a common law lien or security for. They have then sort to apply a charge and security over a revelated security provider, to whom they now by their sheer appointment, purport they are owed money. S418(1) prohibits this exact conduct as otherwise there would be no transparency or governance over such an appointment.

In any event the Board enjoy the protections of s444G,which if the purported ‘Receivers and Managers’ were in fact able at law tohave effect, they are bound by s444G as by acting as Managers they are in factacting as the Company officers as outlined in the orchestrated correspondenceof both CBP and CC, hence the DOCA prevails and s198G(3)(b) and (4) give the Board ultimate right to act. Clearly that right is in parallel with those duly appointed and operating as Administrators or Liquidators but the right of the Directors is not suspended nor removed, to contrary those sections give explicit right to operate and act.

It is not the proposition of the Board that theill-fated assertions of these parties, are a matter for the Takeover Panel todetermine, but the basis for this conduct and assertion, that is affecting thecontrol and operation of the Company is a contrived transaction in November2019 which was contrary to law, entered and supressed from the market, regulatorsand members in an effort to control the assets and interest of MRL and it subsidiaries. It is the Boards request of the Takeover Panel that this transaction should be set aside as it have no legal effect and/or basis, as in the alternate it purports to give rise to absolute company control and assert control without operating in a fully informed market, whereby the members, markets and regulators had opportunity to understand, participate in what was effectively a control event in November 2019, which is relied upon by FG now to assert is purported interests and control, in a new event of control commencing purportedly on 25 May 2022 but taking effect on or around 17 June 2022. That control specifically seek to:

- Correspondence and claims by CBP dated 17 June 2022 purporting theBoards powers are suspended, and have vested to the ‘Receiver’.

- That in sending correspondence and therefore implying dealing with theduties of Directors as defined by the CA, we are in breach of the law and henceshould immediately cease.

- Further more upon 17 June 2022, CC corresponded purporting theDirectors are operating without and breaching the CA.

- They state the undertaking of review of the Company affairs as itpertains to conduct and concerns about the Receivership, Liquidation andAdministration are breaching the law

- Upon 20 June 2022, CC again correspond stating the powers of the Boardare suspended

- The Receivers are responsible for controlling the Company business,assets and operations

- That upon the powers conferred by appointment by Melgear (the FGcompany that sort to acquire the assets in March/April 2020, without informingthe market and in breach of ASIC and ASX regulation) the Directors areprohibited from:

o Removing secured assets from the Company’spossession

o Returning goods to creditor, supplier or otherthird party’s

o Negotiating with third parties in relation to anyassets, debts or claims

o Making commitments or representations on behalf ofthe Company

o Incurring any new liabilities or accepting deliveryof goods

o Any money coming into the Company must be paid toCC in an nominated bank account by them

o Notifying us in an intimidating and coercive way ofpenalties and breaches of the act.

o Then Directing the new Directors to undertakeduties to which there is no statutory power to do so, including thepresentation of what purports to be an ASIC form, which is contrary to thenotifications issued by CC on Form 504, therefore leading the Board to believethe ASIC form used has been falsified with the specific purpose to misrepresenttheir powers and to intimidate, cooer and control the Company

To put those matters quiet simply if that were tobe true, then ss444D, 444G, 436C, 198G(3)(b) and (4) would have no legislativeeffect and a DOCA would cease to have any effect or portability under the CA, when a purported security interest exists. That is the entire process would be ground to a halt at the whim and beck and call of the purported secured creditor. S436C is not designed by accident nor obsolete, it is designed to given protections and certainty to the CA processes as otherwise there could be no appointment or process undertaken, due to the risk of a purported creditor stepping in, taking control and seeking the fruits and benefits of the liquidators, which would be untenable. The concept is not only flawed at law but in simple practical application also.

However in dealing with the respondents as acollective associated party, being the FG, Glen Williams, Brent Van Staden and John Haley, it is well established and whilst in normal course the Panel has stated “issues of association are notoriously difficult foroutsiders to prove since access to the type of evidence needed is rarelyavailable”^[1], helpfully the parties have documented and well recorded (albeitsignificant documents are still being withheld and supressed from MRL which is the legal owner of such documents) contemporaneous evidence of having a long history of dealings between 2.5 – 5 years. Certainly, the willingness of CC to act outside the remit of its regulated authority, and the appealing correspondence and demeaning tone, would draw the inference of their undue association and conduct in concert with the FG. It is a well outlined test of consideration for the Takeovers Panel, as highlighted in World Oil Resources Limited[2013] ATP1 that any number of these factors are a reasonableindication or inference of association, being:It is the submission of the applicant that thereferred and evidenced emails and records, along with the inference of refusalto provide and return company documents, aligned with the use of private emailaccounts and communications between these parties to avoid MRL company recording of such dealings, can draw the reasonable inference, that not only is there an association for purposes of an adverse circumstances finding, but clearly those efforts and attempt draw the reasonable inference of dealings that are contrary to the rights, interest and lawful dealings under the CA against MRL, its members, creditors and the regulators.

Mount Gibson Iron Limited [2008] ATP4 talked to the issues of association whereby parties have a relevantagreement for the purpose of controlling or influencing the conduct of theCompanies affairs and/or parties who are acting in concert in relation to theCompanies affairs. It is clear from the chronology of events, and the conduct of CC, CBP, John Haley and FG are not acting independently nor coincidently acting in the same manner by reference to identical timing, correspondence and actions, whereby each party is represented by the same law firm, they seek to control the same organisation and be it through a purported legitimate appointment or that of a contrived asset-lock up device it is still coercive, controlling and by definition associated parties.

Furthermore, the Panel has upon occasions madereference and inference of it being unusual for the same legal advisor to actfor multiple parties, and hence that observation should not be lost upon thePanel here whereby MRL’s purported legal advisors, including a Company Director, since early 2019 through to June 2020, now seek to represent or are associated with all parties in the controlling events of the FG, John Haley, CC and of course CBP being listed as a responding party themselves. ^[2]

Unacceptable Circumstances

It is inconceivable to the Board that circumstancescould exist whereby a party, having acted contrary to the CA, supressing and controlling information from the Company, its members, creditors and regulators, could and can at its will purport to step in, take control and act contrary to all other parties’ interest. It is contrary to the intent of ss602 and 657A of the CA.

Section 602 of the CA requires the members or those that hold interest in MRL, to be able to identify, know the actions of and the information pertaining to a party seeking to acquire a substantial interest in the company be it via control, equity or other device that gain a substantial interest.

In this scenario we have a ‘Receiver’ under thebanner of CC taking effect on 25 May 2022, but related to a non-disclosed, uncommercial and unfair transaction that took effect in November 2019, which still to date until now is not common knowledge, nor has it been disclosed as a material event. Section 602A of the Act in defining substantial interest specifically identifies such coercive and controlling events as being a breach of s602, and the contemporaneous evidence provided in this submission speaks explicitly to that.

Further to the actions of the appointment of a receiveron 25 May 2022, based upon an asset-lock up agreement from November 2019, theadditional frustration and coercion activities equally are breaches of s602. Conductthat cannot be used, be it lawfully or in good conscious to hide, supress,manipulate or destroy the records and history of the Company in an effort to misleadand evade regulatory scrutiny and potential ramifications. Section 602 of the CA is designed to ensure no party can adversely take control over interest and/or shares of a Corporation either directly or indirectly. What is apparent by the following issues is that the respondent parties have sort to take control of and negate the rights of all interested parties in both interests and shares as they pertain to the Company:

- Seeking control of MRL and the effect of a DOCA, robbing those with interests and/or shares in the Company from being able to realise or benefit from a future transaction or outcome; and

- Have lost control of their interest and rights as they pertain toshares or interest in a freely operating market, with transparency andregulated control of both the primary Company being MRL and is subsidiaries. Both MRL and the subsidiary interests in main were lost to members and the market in November 2019 and this fact was withheld, hidden and the market was knowingly misled.

The proposition that a Company can be controlled bythe refusal to be given access to and copies of its own documents and records,in circumstances such as legal circumstances where there is a litany of prior referencesof the Queensland Law society and the Legal Services Commission to case law issimply overt coercion, control and disregard for the law. As the rights and ownership of a client file, further reinforced by the Australian Solicitors Conduct Rule 14, which requires a solicitor on completion or termination of a solicitors retainer and when request by the client, to give to the client as soon as reasonably possible any documents related to the retainer to which the client is entitled. In regard to the conduct of CBP and the association with FG it is uncontroversial that any suppression or refusal to provide that file amounts to unacceptable circumstances by an associated party of a group or person who is seeking to control and coerce the Company.

This conduct continues of course in concert withanother associated party CC in breach of s70-45 of the Insolvency PracticeSchedule 2 (Corporations) CA and designed to frustrate and inhibit the free and normal control and operation of MRL, there could be simply no other reasonable inference from this conduct.

Section 657A(2)(a)(i) confirms it is unacceptablewhen circumstances have had, are having, will have or are likely to have on thecontrol or potential control of the Company, by a person of a substantialinterest in the Company makes for unacceptable circumstances. The FG rely uponan approx. 29% declared holding (Being a history of non-disclosure andassociation so real total unknown) and asset-lock up device arrangements fromNovember 2019 which therefore allow events such as those historically from Nov2019 to June 2020 as control events to be undertaken, through to the currenttrigger event of 25 May 2022 appointment of a ‘Receiver’ purporting to relyupon a undisclosed transaction.

The conduct of 2022 is a carryover of conductoutlined in the chronology of events, where for example the FG and associatedparties, purposed a delisting event to rob the members, markets and regulatorsthe right to transparency and regulation, and such conduct reenforces the actwould be seen as a coercive act to take control.^[3] It is not uncommon nor unusual for the Panel to seek to or be required to investigate make enquires and remedy transactions and/or events that have historically been undertaken that now are clear to the genesis and nexus for the events and control actions, which are subject to the Panel application. It is the view of MRL, the Takeovers Panel should review the transaction of Nov 2019, nullifying its effect and wavering the purported securities, which are the devices and basis for the controlling events of 25 May 2022. Being that agreement of Nov 2019, offends so many CA, ASIC and ASX regulations, requirements and breaches of duties upon so many parties, it is inconceivable how at law, it could hold to scrutiny.

It is further submitted in this outline thatinsider participation in a control transaction is well proven beyond any doubt,as the chronology of events, emails and admissions in those documentsthemselves make the case in these circumstances. Guidance note 19 wholistically has been breach and disregarded by the respondents, but the circumstances of several parties, breaches of duties using inside information, market sensitive information and working at the expense of MRL is not only unconscionable, misleading, deceptive and an abuse of the power and rights conferred to them, it may well be a criminal offence. All of this whilst negating the most basic and fundamental rights of a transparent, free and informed market for participants to make decisions. The two following considerations are before the panel:

· Consideration by the target board and management of the bid and anycompeting proposal is undertaken free from any actual influence or appearanceof influence from participating insiders; and

· Any disclosure of target company confidential information to the bidderor potential bidder is subject to the appropriate controls.

This submission does not seek to recant thechronology of events, but put simply CBP, John Haley and GF all worked frominside MRL to influence, coerce and seek benefit. The intent of this guidance note seeks to protect and ensure integrity in s602, by consideration of the maintenance of an efficient competitive and informed market for a Company’s securities where the Company is subject to a takeover bid. It gives guidance to mean, any person with significant non-public information in relation to the target through the persons role as an officer, advisor or former. It is clear with information before the Panel this clearly defines:

Phillip AnthonyFeitelson; The Feitelson Group; John Haley; Brent Van Staden; Glen Williams; CorCordis

It is clear the duties to exclude and preclude theinfluence from participating insiders on the targets response to any proposalwas fatally compromised given John Haley’s influence and the legalrepresentatives of CBP, but also requiring the need to ensure the shareholders best interest are advanced. Simply with the non-disclosure, the interrelating dealings and the willingness to mislead the market and regulators, is not only a technical breach but an absolute unashamed disregard for the obligations and the members and MRL itself.

The bidder and the Company have an obligation to ensurethe members of the Company are provided with the following information beingthe identity of any participating insider, details of any incentives and fee’s,and the process and protocols to address potential conflict and the identitybehind the identity behind a bidder per s602.

In dealing with the concept of collateral benefits,it is clear from the contrived control event and quasi take over of Nov 2019,followed by the March 2020 offer and April 2020 offers by the FG, they offendnot only s602 of the CA, but also s621(3), s622, s623, s627, s636(1)(h)(i), s650A. The associates of FG are in direct breach of s623 as it prohibits benefits and inducements that are likely to influence which in this situation is clear as to the benefits ongoing and continued from Nov 2019 through to now. That includes John Haley, CBP, CC and FG as a whole. That is the destruction of assets, the lockup devices, the disregard for legitimate funding in Nov 2019 and other circumstances which offend the equality principle, which is a key feature of guidance note 21, has been disregarded for the benefit of a few. It is a key indicator in the breach of collateral benefits.

A reasonable responsibility of the MRL Board might be, the accounting and allocation of some $3,000,000 in claimed ‘Receiver’s’ costs to which the Board has concern go largely to over inflated costs, overcharging, appointment of related parties to gain a benefit and like. However the rights to this level of detail are legislated as a right, for MRL to query from the ‘Receiver’ which is currently being withheld and resisted, and the Board suggests there is only one reasonable inference as to why this would be. The Panel equally with the wealth of historic evasion, suppression, non disclosure and potential offences would imply this is for a continuation of those endeavours.

The evidence outlined in the chronology of eventsspecifically with reliance upon the emails of early November 2019 being dated12 and 15 November 2019, and then the subsequent events make the genuine andreal terms of that transaction apparent and clear. Therefore the announcementto market dated 28 November 2019, and the response to the ASX query dated 5March 2020 can been seen as nothing else but an attempt to mislead andmanipulate the market. The terms outlined in that agreement between the parties and the subsequent actions offend the Takeovers Panel as published in GN7 pertaining to lockup devices and this is seen as a blatant example ofa restriction agreement and/or an asset lock-up and/or asset lock up by a majorshareholder offending s606, without relief from s611, and combinates in one ofthe most fundamental breaches and basic principles of the market, beingdisclosure.

The below arrangements entered into between theparties on and around 12 November to 15 November 2019, sort to fetter therights of MRL, its members and other creditors other than the FG of Companies, by given preference to and rights to lock up MRL Assets and control, effectively handing control of MRL to the FG since late November 2019 to 10 June 2020, unknown to the market, members and other creditors. The inference of such an intent is clear with the following conditions:

· It requires current legal action against him by theCompany be ceased

· That a loan of $500,000 being subject of the deedis acknowledged and honoured at 13% interest

· That the Company recognise the debenture agreementshe had previously forfeited, through the Deed of Release worth approx.$1,500,000 that includes security provision of that loan an therefore allothers.

· The Company would facilitate his 3% creepprovisions allowance for him

· He has the right to appoint a Director to theCompany

· He seeks additional security over his new money of$1,000,000

· Seek to limit the statutory rights of severalshareholders and financier to further control

Bringingthose matters back to the event of 25 May 2022, the existing Board thereforeconsidered the following facts:

- The purported securities of PAF and others in the FG, do not cover MRL, and if such security exists, it is the assets and interested owned only.

- Any such securities document to which the FG of Company’s purports to rely upon, was waivered in December 2018 by PAF in a Deed of Release with MRL.

- MRL as declared by Deloitte and Rodgers Reidy’s creditors reports,outlines the Company has no commercial value or prospects of providing return. (whichis different to the Company and its rights pertaining to the Corporation Act2001 to survive)

- If such security did exist, for what benefit after 2 years of MRL being in liquidation, would FG, CBP and CC seek to act by purporting to be Managers and Receivers of MRL.

This has promotedthe Board to seek to investigate further and in doing so has immediately becomeaware of issue and concerns about past conduct, conflict of interest,uncommercial transactions and concerns. In broad terms the Board reasonablybelieves there has been efforts to hide, supressed and mislead the market andinvestors by failing to disclose material issues and transactions, which in theview of the Board, is in breach of ASIC, ASX and CA requirements.

In what is clearlyan orchestrated response both CBP and CC, both dispute being obligated at law to do so, refused the request of the Directors for the required records and sort to frustrate, limit and then control the actions of the newly appointed Board and rights afforded to it, in the protection of the Company and its members. In doing so clearly breaching the intent of s602 of the CA and the prescribed considerations of s657A by attempting to control, limit the influence and suppress the right of its members.

The Company beinggoverned by the CA and specifically protected from such predatory and unconscionable conduct through Chapter 6, seeks the legislative protections and rights for MRL as a registered Company and its members whom currently number 2,100.