A CONSULTANT who represented Larry King in discussions about carving up his collapsed home-building company, Beechwood Homes, has quit after revelations he once worked for the firm now administering Beechwood's remaining assets.

But Mr King may waive his rights to a piece of the pie, with sources close to the entrepreneur saying he "felt bad about what happened to creditors".

The Herald revealed yesterday that Tim Gillespie, who acted as a proxy holder for Mr King and his wife at a meeting of Beechwood Homes creditors, worked for the company's administrator, Armstrong Wily, two years ago.

Mr Gillespie voted at the May 23 meeting to retain Armstrong Wily as the administrator, as did a group of "related parties".

The vote raised questions about Armstrong Wily's independence, leading one creditor - Austral Bricks - to consider legal action to overturn the vote.

Mr Gillespie, who has consistently said he did nothing improper, said yesterday he had pulled out of today's creditors' meeting in Castle Hill and would no longer be acting for Mr King.

"I've pulled out of the job - we decided it was better that there was no thought of impropriety and that I would not proceed," Mr Gillespie said.

"We decided that it was better that we don't create any further stress for the other creditors. I'm not going to be paid [by Mr King] or act for him. But I'm no friend of Armstrong Wily. I've worked for just about every major firm in this city over the years."

Mr King will be represented at today's meeting by his legal representatives from the business law firm Nash O'Neill Tomko Lawyers. The controversial entrepreneur will continue to exercise considerable clout through the fistful of proxy votes he controls as the owner, director or secretary of a string of companies known as "related entities".

Due to a complex series of financial transactions between these related entities and Beechwood, Mr King and his wife stand to recoup as much as $22 million from their failed project-home company when it is sold.