"Notwithstanding the expenditure of substantial effort in terms of time of the liquidators and their staff there will not be any net recovery for the creditors of the company. Therefore the loss incurred by the creditors of Five Star which exceeded $43,000,000 will be effectively written off," Associate Judge Doogue said.
The judge said he accepted the liquidators "left no stone unturned" but were defeated by a number of factors.
"Those factors are first of all the complexity of the dealings between Five Star and its related companies and persons associated with it including directors. Secondly, the large scale fraudulent activities of the directors which resulted in three of them being sentenced to prison and one to home detention and community service. Their fraudulent activities and related party dealings meant that money diverted away...[and] was put out of reach of the liquidators," Associate Judge Doogue said.
"I accept that while there was no tangible advantage to the creditors as a result of the efforts of the liquidators, the enquiries that they made and the attempts that they made to recover were ones which were properly undertaken by them," he said.
Five Star board members Nick Kirk, Marcus Macdonald and Anthony Bowden have already served sentences of either home detention or prison.
The group's founder, Neill Williams, is still part way through a 5 year prison sentence.
