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A national firm that claimed to be Australia’s highest-ranking legal service was wound up amid potential allegations of illegal phoenix activity, insolvent trading, and a failure to act in good faith.
GTC Legal, formerly trading as GTC Lawyers or Taylor Rose Australia under the directorship of James Terence Alexander and Michelle Janette Makela, was wound up via special resolution in late May, according to documents obtained by Lawyers Weekly.
Alexander and Makela informed administrators at B&T Advisory that GTC Legal entered a joint venture with UK-based AIIC Limited – the parent company for Taylor Rose MW, FDR Law, SlothMove and Kingsley Wood – but its refusal to provide further investment “caused a detriment to the business which became unsustainable”.
GTC sought safe harbour advice and ceased trading last November.
Preliminary investigations by B&T’s Travis Pullen prior to 14 May identified potential contraventions of the Corporations Act 2001 by a director of GTC Legal, including an alleged failure to exercise their duties and powers with a degree of care and diligence and good faith.
According to Pullen’s second report to creditors, issued under the Insolvency Practice Rules (Corporations), there was a potential breach of a director’s duty to prevent insolvent trading by GTC Legal.
Pullen also identified potential alleged breaches related to use of position, unreasonable director-related transactions, and creditor-defeating disposition. The latter is often tied to illegal phoenix activity.
A number of clients were transferred to the related entity, GTC Legal Group Holdings (GTC-LGH), on or before GTC ceased trading.
Just under $65,000 was transferred to GTG-LGH, according to financial records provided within B&T Advisory’s report.
Pullen said he would investigate the transactions to determine whether they constitute a voidable transaction under sections 588FDA or 588FDB of the act, which relate to unreasonable director-related transactions and creditor-defeating dispositions, respectively.
The directors disclosed that one of them received payments for loans they made to the company, totalling $227,388. The loans could potentially allegedly represent unfair preferential payments, uncommercial transactions, and unreasonable director-related transactions.
Investigations would be required if GTC were placed into liquidation.
GTC Legal made a trading profit only once between 2022 and 2025.
A director advised B&T that its outstanding employee entitlements were made up of approximately $66,700 in superannuation guarantee charges and just over $52,000 in redundancy entitlements for one employee.
The Australian Taxation Office (ATO) also advised of outstanding super guarantee charge (SGC) amounts of $72,439.84.
In relation to unpaid GST and PAYG withholding tax, GTC Legal directors said they owed the ATO a further $823,009.68. A proof of debt provided by the ATO increased this figure to $863,919.48.
A meeting with creditors, held in late April, canvassed GTC Legal’s assets and discussed a potential sale of the business, the role of Queensland Law Society, and the total debts.
Creditors were also advised about the alleged and potential claims against the directors for insolvent trading, illegal phoenix activity, and the potential misuse of trust accounts.
The liquidators clarified that a “brief review” of the books and records had not revealed any “potential unfair preferential payments”.
There were also discussions regarding the alleged potential bankruptcy and personal asset and liabilities positions of the directors.
Attempts to contact GTC Legal via phone were thwarted by an unhelpful AI-generated bot named “Jen” from “legal-hotline-dot-com”. Neither James Stevens nor Michelle Makela responded to written requests for comments.
More to come.
