By Michael Evans
THE administrators of ABC Learning, backed by the deep pockets of litigation funders IMF Australia, are investigating a $1 billion damages claim against the former directors of the collapsed childcare company, including founder Eddy Groves and chairman Sallyanne Atkinson, and auditors Pitcher Partners.
The administrator is also looking to recover up to $500 million from banks, including major creditor the Commonwealth Bank, which IMF says ''jumped the queue'' by becoming a secured creditor six months before ABC collapsed under $1 billion of debt last November.
Lawyers for Ferrier Hodgson appeared in the Federal Court yesterday, where they obtained approval to receive funding from IMF to conduct a series of public examinations of former ABC directors, their auditors Pitcher Partners, members of its banking syndicate, and external consultants.
The public examinations are expected to last up to three weeks.
It is believed Mr Groves, Ms Atkinson, chief financial officer James Black and head of the audit committee David Ryan are among those expected to be asked to appear.
The court heard the issues to be investigated included the possibility of insolvent trading; possible breaches of directors' and auditors' duties; possible voidable transactions if ABC is placed into liquidation; and the circumstances surrounding a charge taken out six months before the company went under.
Executive chairman of IMF Australia, John Walker, told The Age that ''the principal one that will be the focus of attention will be the charge that was granted by ABC to the bank syndicate on the 25th of June [last year], if it's valid.''
The charge was taken out by Ralph Norris' Commonwealth Bank, putting it directly in the sights of any legal action.
''They [CBA] moved from an unsecured position at the back of the queue with all the other unsecureds and they jumped the queue by obtaining a fixed and floating charge over the company's assets,'' Mr Walker said.
More than $400 million has already been received by the banking syndicate since the charge was granted.
''If it's not valid then we would seek to get the money back that the banks have got so far, and any money that the banks get before the charges are determined to be invalid, which could amount to in excess of $500 million,'' Mr Walker said.
Any damages claim against former ABC directors, who include former Howard minister Larry Anthony, stockbroking identity Bill Bessemer, Groves' ex-wife Le Neve, as well as the auditors, could top ''a billion odd dollars'', said Mr Walker.
''We say the company was recognising revenue when it shouldn't and valuing its assets other than they otherwise should,'' said Mr Walker. ''The directors caused the company to not disclose what predicament it was in, namely that it never made money.''