One tipster was obviously keeping far too close an eye on the Federal Court listings pages, because they sent word that legal proceedings relating to AllensGate were issued in Federal Court on Friday, and were heard for directions yesterday, under the listing:
VID589/2011 IAN ARTHUR KNOX BAILLIEU & HAWTHORN GLEN PROPRIEARY LTD v ACONEX LTD
Shareholder shitfight: start your engines gentlemen
They were also kind enough to leak us a copy of the orders made by the Court, which we understand are on the public record. They’re just consent orders, and we’re told that the timetable has already slipped, but that’s the general picture.
The originating process (which we are hosting here) asks for, inter alia:
We since had referred to us this article in the Sydney Morning Herald, which confirms that the proceeding relates to the AllensGate saga. Two spies tell us that this is an application to inspect the books of Aconex, which, crucially, might include emails stored on Michael Robinson’s @aar.com.au email address.
More discussion after the break.
Few things worth noting:
- the solicitors of record for Aconex Ltd are Arnold Bloch Leibler, which confirms what we had heard (that they’ve jumped ship from AAR) – we can only speculate as to why, but it strongly suggests that the conflict allegations have teeth;
- the application is for access to the company’s books;
- the application is being resisted by Aconex, which is quite odd in shareholder actions — normally substantial shareholders are entitled as of right to access company books (such as emails and documents) for any “proper purpose”;
- in particular, Aconex is trying to restrict access to documents about the infamous EGM, on which we reported in February, at which the company brought a resolution to remove its own Chairman, with AAR advising the company – the claimant shareholders seem to have supported the resolution, but they didn’t propose it – amazingly, the resolution failed – the directors voted against it; the shareholders want to know why;
- amusingly, the Chairman in question was none other than … Martin Hosking.
Another spy has kindly leaked a copy of the minutes to the EGM. Go for your life, folks.
We suspect that the books will reveal some skeletons in AAR’s closet relating to this transaction. Time will tell, but it’s unclear why they would oppose the application otherwise. It’s certainly going to play out very publicly from here on out. Media coverage is likely to increase as well.
Martin, oh Martin: RedFaced over RedBubble
Meanwhile, Martin Hosking seems to have jumped, rather than been pushed, from the roost at Aconex, resigning his directorship. According to an Aconex press release, he resigned “in order to focus on his role as CEO of RedBubble.” Evidently his new censorship duties take up too much of his time!
However, as The Register noted over the weekend:
Aconex backers feature the top end of town including shopping centre billionaire John Gandel of the Gandel Group, who is also heavily involved in Jewish community philanthropy in Australia and is a co-founder of Melbourne’s Jewish Museum, along with MYOB founder Craig Winkler and Liberal party MP Greg Hunt. Michael Robinson, formerly managing partner and co-chair of international law firm Allens Arthur Robinson, is on the board.
Of course, the removal of the HH content didn’t come a moment too soon. Last week it emerged that Hitler-themed baby clothes were also on sale at Red Bubble. These items have since also been withdrawn in part. This, we suspect, was the last straw for the Aconex board.
Of course, the tastelessness of Hitler baby clothes (and others on equally offensive themes) has been pointed out to RB for a while. It was only recently, after we broke the story and PayPal started an investigation, that, coincidentally, RB started to change the default settings for t-shirt merchandise. Interesting how RB ignored the plentiful feedback until it started feeling the heat. To those who would question whether RB falls within the FS mandate, we point to the excellent outcome in this saga.
It’s not all good news though. Last time we checked, the “Hipster Hitler” account is still active (selling since August 2010, it says) and offering products for sale. This may well have been a proportionate response (remove the offending articles, keep and warn the user) – except for the nature of the username, which many are likely to find inherently offensive. RB can do better, we think.
Where to now?
And so we’ve come full circle: ABL acting for Aconex, having withdrawn services from RedBubble; AAR fending of conflict allegations, having withdrawn from Aconex; Hosking and Robinson leaving their original offices; AAR ceasing to Act… and litigation pending. At least the Hitler merchandise has (largely) gone.
But let’s not forget where the whole saga started: AAR, whose ex-Chairman Michael Robinson sat on the board of Aconex while providing legal advice to the company. Once the conflict emerged, AAR appointed Howard Obst to defend any claims against the firm; unsurprisingly, Obst immediately confirmed that AAR would cease to act for Aconex, and ABL took over the reigns.
AAR have dug themselves deeper into the shitfight by defending Hosking in the EGM and maintaining Robinson’s board (and consultancy) dual-role. The shareholder action is unlikely to have any imediate bearing on Allens, but there remains the possibility of some bad publicity and possibly satellite litigation later.
But, by jove, we’ve got it! RedBubble are in desperate need of corporate legal advice right now, so there may still be an upside in all this nasty business for AAR. Wouldn’t it tie things up neatly if AAR were to take on RedBubble as a client? Aconex lost, RB gained, and some unhappy stakeholders on all sides… How do you think things will play out?
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What a way to start the day – with a wonderful belly-laugh! Thanks FirmSpy!
What goes around, comes around – just some digging still to be done with the help of the Federal Court to find the flippers that have been paddling away so incredibly fast under the surface in all this.
And yes – the perfect end would be now for AAR to take on the rather dirtied RedBubble as a client – a good match in the end?
This all seems rather sleazy. Thank goodness there are people like Baillieu/Hawthorne Glen that are willing to step up and demand some answers. Why hasn’t Francisco Partners weighted in on this calamity yet? Don’t they have a rather large stake in Aconex?Can you get a statement from them FirmSpyGuy?
Could this get any worse for Martin Hosking? How many times is he going to make bad business decisions? Can’t wait to see what happens next.
The horrendous baby clothes have been on sale by Hosking on RB for a lot longer than you make out in the story. Here’s a blog about it from the person one of complainers and who got it on front page of the papers
http://tatumwulff.blogspot.com/2011/06/blowing-whistle-on-redbubbles-serial.html
Failure of due diligence by AAR and others to need a front page News Limited story before they hedge support for him
Dear FirmSpy and readers,
If you want to learn the details of how the inappropriate baby wear was leaked to the press, feel free to read my write up:
“Blowing the Whistle on Redbubble’s Serial Killer Baby Wear”
http://tatumwulff.blogspot.com/2011/06/blowing-whistle-on-redbubbles-serial.html
After discovering a number of serial killer images on baby jumpers, ranging from Charles Manson, Ted Bundy, serial killer and cannibal – Albert Fish, Hitler, Osama bin Laden to Ivan Milet and more, I wrote a letter to the press and child protection organizations and was soon contacted by Susie O’Brien of the Herald Sun Melbourne.
Susie’s article was written based on the information I provided her in my letter.
I’d like to add that I was censored by Redbubble for writing about the baby wear in my ‘farewell journal’ to my friends on the site.
The day I discovered Charles Manson’s face on a baby jumper was the day I wrote my farewell journal which was removed by Redbubble within 5 minutes of my posting it.
Additionally, my account was suspended for 7 days, ironically delaying my ability to delete my own account to leave Redbubble.
Being “silenced” by Redbubble was an awful experience for me. Especially considering I had only raised valid points (that have now been printed by the media) about the site and expressed how appalled I was by members whom were supporting and condoning serial killers faces on baby wear. I did not “name and shame” anyone (which contravenes their guidelines), so I still don’t know why I had been suspended with my journal deleted.
Thank you FirmSpy, for yet another fantastic and thorough account of the latest information regarding Redbubble and Aconex.
Kind Regards,
Tatum Wulff
It is ironic that one of the tangible outcomes so far of AllensGate is that Hosking has been forced to drop the Hitler t-shirts. As the person at the centre of that storm, AllensGate raised his profile so the media then took an interest in who he was and what he did. He would still be selling the stuff otherwise.
There are a couple of screenshots of the print news stories in this link that I had not seen before. Too good to have hidden in a link
Request to FS eds can you update the main post to include these screenshots?
good to see two big scandals that FS first broke are still escalating and that they have a common thread in the now former Chair of Aconex and a musical chairs of legal advisers
and even after all this time, and all this bad publicity for RB and Martin Hosking
the Hitler Hipster profile is still on Redbubble, albeit with nothing on sale, but just the act of having it there is surely still promoting them ?
http://www.redbubble.com/people/hipsterhitler
I have even posed a question in the Redbubble Support forum, but I ain’t holding my breath . . . .
http://support.redbubble.com/discussions/questions/17598-hipster-hitler
Now this is what I call a FS special – lawyers ducking for cover, legal action underway and a nice twist to the history of the AllensGate posts that it’s all about the same person you covered in FS’s best post yet – “ABL Ceases to Act…”
Keep ‘em coming!
nice post
Well done FS, it is truly inexplicable the mainstream media chose to ignore this melting pot for as long as it did.
Keep up this cracking journalistic nouse, and serve it with a good dollop of sallacious gossip, and you will be relevant for many years to come.
One of the intriguing angles in this story that you barely comment on is that Allens still have a representative on the Aconex board in Michael Robinson. He could be a source of information about the goings on at Aconex and could be directly or indirectly instructing ABL to resist the requests for idoucments about AAR conflicts. Keeping him there might help Allens short term but it has the potential to make things much worse in the end if any serious problems come out.
There’s quite a difference in culture at Allens between Melbourne and Sydney. Sydney partners often grumble about some of the more cowboy culture down south in “AR” part of Allens. The whole idea of law firms having their partners or consultants on boards is a very poor one for the trouble it can bring. It is strange AAR HQ in Sydney are allowing Robinson to go on with it at Aconex. This is a case in point.
The plot thickens….
I would expect the directors to vigorously resist disclosure especially in light of the revelations about Martin Hosking. Emails in support of him back then are going to look worse than silly now.
@AnonYmouse
I’ll disagree with you on one thing.
“One Day Out of Life; AllensGate Partners Forget About The Bad Times, Oh Yeah!”
…was FS’s best post ever. Too much LOL!
This one is pretty good too, if uncharacteristically dry (what’s up, eds?!). The best bit: the ABL Hitler t-shirt guy was the AllensGate client’s Chairman the shit fight started over.
I check FS every day and while there is some nonsense there’s the occasional ripper like this. Much better than reading the AFR. They wouldn’t dare touch stories like this, even with legal proceedings underway, with big law coming under the gun. Only the Age covered the Hitler t-shirt story that FS first published. The link between the two stories is dynamite. Since when was Hosking selling this stuff and who if anyone at AAR knew back then? Long may FS reign exposing what is really going on under the covers.
I have suffered first hand Martin Hosking’s judgment at work on RedBubble and I am astounded he ever got to be in the position of being the subject of a major law firm scandal as Chairman of a big company. His poor judgment in censoring dissent and continuing with very bad decisions about products he sold unraveled the community at RedBubble.
All of this is still years away from being sorted out. These proceedings are just a request for information, there may not be a judgment on this case until early next year. Then if proceedings are issued based on the information it will be months after that. Then even longer to wait for a trial and judgment. Then appeals. Maybe other proceedings. AllensGate could have a very long time to go before right/wrong is finally decided by a court.
How many FS posts is this now about Aconex or Hosking’s legal troubles? They must spend a fortune on legal fees to provide entertainment for FS readers on such a regular basis.
Redbubble as a new client for AAR – ha! That would round things out! but you missed one crucial part in your tongue in cheek suggestion…..Michael Robinson also to go on the board of Redbubble.
Michael Robinson has a reputation as a “politician” with a nose for avoiding scandal and staying out of (or on the right side of) brawls. What a mess this is.
Credit where credit is due, FirmSpy
This is now the highest ranked external result for FirmSpy
http://www.crikey.com.au/2011/06/02/firm-spy-shot-down/
It was written-up as a big story on Crikey in the belief that your hosting and discussion of the offensive content Hosking was selling on RedBubble resulted in legal action or TOS breach. Hosking has helped make FirmSpy more famous – give that much credit at least.
That SMH article is a good read. This could all get very interesting now that the mainstream media are picking up on it…
Memo to FS: This sort of post is FS at its best (breaking news, hard-hitting, factual). Contrast yesterday’s effort on Delloite (fluff and puff, empty gossip).
Nice touch in lieu of your usual shocking graphic you just put the AAR and Aconex logos next to eachother. Shocking enough with the history.
Commenters are getting a bit ahead of themselves once again
I have read all of FS’s posts on this topic since February and so far only four significant matters could be said to be reliably factually established
1. ABL have replaced AAR as the solictors for this client
2. The Chairman of the client has resigned to pursue his other business interests in t-shirt manufacturing
3. Legal proceeedings have been commenced for access to the books relating to the EGM called in January to remove the Chairman
4. Michael Robinson is on the board of the company and is also a consultant to AAR
The rest is speculation. Wrongdoing by anyone is still yet to be determined. There may have been no wrongdoing. I love FirmSpy gossip as much as the next guy, but bear the fact vs. speculation gulf in mind in commenting on this case.
Reading the string of comments is almost as much fun as reading the initial post – the context of the whole ongoing circle of farce and blunder from AAR through to Aconex and Hosking to RedBubble, hipsterhitler and ABL just adds more spice to the scandal.
A lovely series of posts from FirmSpy with the added anticipatory pleasure of many more to come.
I was thinking the exactly same thing myself. Two comments to add on the farce (1) AAR advised Aconex to call the meeting to remove Hosking but then advised the directors including their own Michael Robinson to defeat the proposed resolution – so why did AAR advise calling of the meeting in the first place?! (2) FS provides a link to show that Hipster Hitler account is still active on RedBubble – you mean to say Hosking hasn’t had enough bad press about this Hitler stuff already and is need of a bit more?! Gracious, if this nonsense had been written into a script or book it would have been rejected as too implausible.
Absolutely effing hilarious!!! AllensGate keeps getting better and better. Highlight read, thank you FS. If only I had looked at this post first thing this morning It would have put a smile on my face the whole day.
Michael Robinson never left when he “retired” and still acts like he’s Chairman. AAR official email policy is clear it is only for AAR work. AAR’s own email rules mean he’s been working for AAR at Aconex. I thought it all this Aconex stuff must have all died down but it now has all the flashing lights of a highway pile up ahead.
ABL gave short shrift to Hosking at RedBubble, then Hosking was gone from Aconex shortly after ABL started acting for Aconex (see the obvious causal link here, anyone?).
Indeed. I would like to be a fly on the wall listening to the explanation being given at AAR of how AAR ever got themselves so mixed up with Hosking to the point of a SMH article alleging Michael Robinson of AAR supported him right under a picture of one of his Hitler t-shirts
Clicking through the “Related Posts” above they mostly relate to allegations to do with the EGM to remove Martin Hosking. It is mind-blowing how much grief the fighting over Hosking has caused AAR already with AAR on his side. I don’t want to be snarky about a competitor’s troubles, but this ratchets AAR’s problems to whole new level now that is revealed he is the Hitler t-shirt and serial killer baby-suit guy and legal proceedings have been initiated.
You would think after all that has happened, Redbubble would have learned at least something. This t-shirt design has been reported by many people, for weeks, but still RB take no notice.
http://www.redbubble.com/people/formerlyunknown/t-shirts/7245080-depression-is-an-enemy
Makes one wonder if they ever want to get their good name back.
The SMH article is priceless with the picture of Hitler wearing a Hipster Hitler “Three Reichs and you are Out” t-shirt and the story saying Hosking also sold “baby clothing bearing images of serial killers including Ivan Milat” and then calls for “…the resignation of non-executive director Michael Robinson, a consultant at top-end law firm Allens Arthur Robinson, because of his alleged support for Mr Hosking…”
@ Julie
I bet RB is making too much money off that tee to remove it. Just like the HH stuff. Money comes first. Now nor being the CEO of Aconex Martin needs all the income from RB to carry on with his life style. Pity he didn’t quite make it as a model
I saw a very interesting (or scary) photo of him with a tool belt!!
In keeping with their leifmotif, perhaps Redbubble should release a series of romper suits with the AAR logo emblazoned across the chest… just a thoughtbubble.
@Avid Follower
ABL have pivoted twice and both times distanced themselves from Hosking but AAR have been left “holding the baby” as his most staunch supporters. As a vote of thanks, Hosking and RedBubble should release a range of baby wear with pictures of the AAR partners on them.
Most entertaining that “AllensGate” is all about the person who was behind the Hitler t-shirts and baby suits. Thanks for the laughs, FS! What will happen next?
Hosking and Robinson go well back. Just run a quick media search, and there’s an AFR story by Emma Connors on 7 February 2006 with Chairman Hosking announcing “heavyweight” Michael Robinson’s appointment to the Aconex board. Interesting to know what the history between the two of them before that was.
Utterly hilarious
a highly informative and entertaining read
if all firmspy posts were of the quality of this one, you would really be in business
The Age/SMH actually ran two stories about this with the the same Hosking Hitler t-shirt. In the first one, Mark Leibler is quoted condemning Hosking/RedBubble as effectively “promoting Nazism”. In the second Age/SMH story, under exactly the same graphic, Michael Robinson of AAR is alleged to be a Hosking supporter. Demonstration of why Mark Leibler is rightly regarded as one of the shrewdest and savviest operators around.
if it wasn’t for seeing the source documents referenced, this unlikely combination of characters and ridiculous chain of events would have to be a comical invention
I can’t believe that RB allow the Hipsterfitler account to remain on their site.
Surely if all the work attached to that account was deemed inappropriate for Redbubble, then the account itself should also be inappropriate.
I can think of only two reasons why the account would still be there.
1) to promote the Hipsterhitler website, via the url included in the account bio.
or
2) Redbubble is still selling the HH shirts to the acount holder but the designs are hidden from public view.
Neither are appropriate, or acceptable.
@ Julie – It wouldn’t surprise that they are still trying to sell them some other way. They make quite a bit of money off them.
To suggest that Michael Robinson and Allens supported Hitler t-shirts and serial killer baby suits is going a bit far, but it is an extraordinary twist to the story that the fight was all about someone who did. This angle now provides a sensationalist hook for the whole story and his t-shirts will surely make an appearance in future media reports of the case because it will help sell newspapers.
@Another 530 lurker
Michael Robinson must still have some real clout at Allens, think what 50+ years including 20+ years at the top must mean, or he would have been long ago cut loose over this matter which is only a problem for Allens at all because of his overlapping directorship and role at Allens.
The unanswered question in this whole saga is how Michael Robinson got himself and his law firm in so tight with a former Secretary of the AAC selling Hitler t-shirts. I am looking foward to the Firm Spy post that explains this aspect satisfactorily. Thus far it is the glaring gap in the story.
Thanks FS for something to really laugh at.
It is a truism about legal practice on display in this post and its predecessors that while the big clients provide the money, the smaller clients provide the passion and the drama.
Replacing company Board members – when they really don’t want to go – is the messiest of all corporate affairs, bar insolvency. Bloody mix of politics and law, with personal reputations on line – and often big $ at stake too. A blood sport for those involved and not for the feint of heart. Makes for a damn good read from a distance though.
I don’t think you can blame Allens for Hosking. Their client was Aconex and Hosking was the Chairman, so they were presumably just doing their client’s will as corporate lawyers. However, Michael Robinson was also a director of the client, so he had his own separate decision to make about Hosking. The post says Hosking has been selling Hipster Hitler since August 2010. This could get interesting as more facts come out. I wonder if the Aconex directors including Robinson gave a green light to Hosking’s other activities or if they were in the dark
flabbergasted
who knows what the facts of the matter are, but for it even to be suggested that someone like michael robinson was a supporter of hosking borders on the defamatory. i’m in disbelief that someone of robinson’s standing could have ever got himself into such a tangle
FirmSpy should do a deal with the Nine Network. The Allens/Aconex/Robinson/Hosking/ RedBubble/ABL series of dramas should be made into a mini-series. Your posts have mixed digging journalism with sheer entertainment. Brings out the best in comments too some of them comedy gold. Can’t wait for the next episode.
What happened to the Downfall YouTube clip?
On the subject of downfalls, Valerie Lawson’s book “The Allens Affair” is an instructive read. It explains by his life history why Adrian Powles had it in him to steal client money: crooked father, troubled upbringing and gambling problem. Someone who was “not Allens” material nevertheless made it to be one of the most senior partners before crashing down and nearly sinking the firm. The mystery was how he had survived at Allens for so long without being shown up and why his misdeeds were not caught sooner.
Whatever else may be said to be the case here (and the jury is out), it seems indisputable that Michael Robinson in the twilight of his career and as a consultant to Allens chose to sit on a board under a Chairman whose main business included producing and promoting Hitler t-shirts and even more vile and tacky children’s apparel. For Robinson to sit under such a character on a board is so “not Allens” the mystery here is what the devil got into him and why on earth the people at Allens let him do it.
This story is crying out for some sort of YouTube parody clip or at the very least some photoshops of the main people and the products in question