The Inspector-General in Bankruptcy has commenced proceedings in the Federal Court against Registered Trustee Gavin King.
The Australian Financial Security Authority (AFSA) is seeking court orders for Mr King to be removed as a trustee, including from the estates formerly managed by Paul Leroy. AFSA is also seeking a declaration that Mr King has breached his duties as a Registered Trustee.
These proceedings follow AFSA's earlier action filed in the Federal Court on 11 November 2025 against Mr Leroy, who is alleged to have misappropriated more than $4 million across at least 5 bankrupt estates between 2021 and 2023. Mr Leroy was deregistered as a registered trustee in 2024 after extensive investigations.
Further investigations revealed Mr King, who was employed by Mackay Goodwin at the same time as Mr Leroy, managed the administration of Mr Leroy's bankrupt estates, including those from which Mr Leroy allegedly misappropriated funds.
AFSA's application alleges Mr King breached his statutory obligations and fiduciary duties under the Bankruptcy Act 1996, including:
- transferring estates from Mr Leroy to himself without following the proper process
- providing misleading information to the Inspector-General in Bankruptcy, the Federal Court, National Australia Bank and creditors
- failing to keep proper records and notify creditors of conflicts
- making or signing documents that were false or misleading
- failing to ensure communications were accurate and complete
- breaching duties by profiting from estates
- failing to act honestly and impartially.
AFSA is seeking the suspension of Mr King's registration as a trustee, or independent supervision.
AFSA Chief Executive and Inspector-General in Bankruptcy, Tim Beresford, said:
'Our regulatory actions are focused on protecting the integrity of Australia's personal insolvency system.
'These actions send a clear message to registered trustees and personal insolvency firms – as Officers of the Court you are responsible for ensuring the highest standards of integrity across your business. This includes your Registered Trustees and the staff who support them.
'Trust is the foundation of a fair and functioning insolvency system. Our actions are about protecting the public good and ensuring Australians can rely on the system to be fair, transparent and accountable.'
This case forms part of AFSA's broader harms-based regulatory reset, targeting:
- manipulating personal insolvency proposals and creditor meetings to protect wealth
- unauthorised access to trust funds for personal gain
- harmful insolvency advice and debt agreements
- not removing registrations on the Personal Property Securities Register – the PPSR.
AFSA continues to work with government regulators and law enforcement to ensure alleged misconduct is thoroughly investigated and prosecuted where appropriate.
