JOHN Williams, the man who signed a put option deed that makes him liable for $154 million owed to BrisConnections by its largest shareholder, Australian Style Investments, has told the Supreme Court he does not have the money to pay.
Under the terms of that agreement, the sole director of Australian Style Investments (ASI), Nick Bolton, can transfer all his BrisConnections units to 63-year-old Williams before the next $1 per unit instalment is due next month.
John Williams - under "no obligation".Credit: Wayne Taylor
ASI holds 77 million BrisConnections units, almost 19.9 per cent of the listed company, and Williams told the court that he does not have the "wherewithal" to pay the first $77 million instalment on April 29.
Williams appeared as a witness in the case between BrisConnections and ASI, in which the road builder is seeking orders to have ASI wound up and an extraordinary meeting it has called of BrisConnections unit holders cancelled.
The instalments owed by unit holders will be used to part-fund the building of Brisbane's $4.8 billion Airport Link toll road, and repay a $322 million bridging finance facility owed to Macquarie Group.
In his testimony to the court, Williams, 63, said he had been a friend of Nick's father, John Bolton, since they met in 1951. "We were at school together and formed a friendship there," Williams said.
Under cross-examination from Joseph Santamaria, QC, for BrisConnections, Williams told the court about three meetings he had with Nick Bolton at which they agreed to the put option.
Williams testified that the terms of the put option were first discussed at a bar called Melbourne Wine Room in "late November or early December last year".
Under oath, Williams told the court he was aware of the two $1 instalments owed on the units and that this totalled "many millions of dollars", to be paid on April 29, before agreeing to the deal. "It's 70-something," he said when asked by Santamaria how many millions of dollars were due on that date.
"Nick and John explained the instalment obligations to me, and that a $1 call was due on April 29," Williams said. "He said it was extremely unlikely he would exercise the option."
Santamaria has described the put option, which absolves 26-year-old Nick Bolton from having to make the instalment payments, as a "sham" and part of an "exit strategy" designed to send millions of dollars of liabilities "to the bottom of Port Philip Bay".
Williams was asked what debt or "moral obligation" he owes the Bolton family.
He replied "none at all".
$322m legal point
WITH the cross-examination of Nick Bolton and John Williams at an end, myriad parties casting a very expensive legal eye over proceedings have been allowed their chance to make a submission to the court.
Deutsche Bank, one of the underwriters of the BrisConnections units, last week stirred the pot when it requested that the court rule on the ultimate liability of unit holders. Such a ruling may absolve the bank from paying its share of shortfalls on the $780 million owed by unit holders.
The co-underwriter of the BrisConnections units, Macquarie Capital Partners, has requested that the court make no such ruling — it is part of Macquarie Group, which will be owed $322 million by the toll-road builder under a bridging finance facility, and needs the instalments to be called if that debt is to be recouped.
A total of $231 million has already been drawn by BrisConnections on that facility, and a further $91 million will be drawn on March 30.
"We say that Deutsche is wrong, clearly and unequivocally wrong," said John Sackar, QC, for Macquarie Group.
Sackar also submitted that the original notice of meeting from ASI was invalid, and therefore a meeting calling for BrisConnections' trusts to be wound up should not go ahead.
"Can someone come along and say, 'I'm owed money and don't want members to have a meeting?'," responded Justice Ross Robson to Macquarie's submission.
On the subject of whether the next $1 call on unit holders needs to be made, Justice Robson said: "I will try to decide matters without dipping my toe in that pond."
Party season
THE recession blues might be on us, but that hasn't stopped Melbourne from revelling in the autumn party season.
On Saturday night, Myer boss Bernie Brooks hosted a star-studded function at Docklands following the Myer runway show for the Melbourne Fashion Festival.
While party talk focused on the appearance of Jennifer Hawkins, Brooks was all smiles about the 1400-strong turnout for the event. "Remarkable, given the times," Brooks said. "I think this downturn is like nothing we've seen before, so to see a sell-out like this is extraordinary."
More than 300 of the guests paid $250 a ticket for a champagne supper by Guy Grossi of Grossi Florentino.
At supper, Brooks admitted his mind was really on the department store's results, which will be announced in Melbourne this morning. "I've kept a few people in the accounts department busy over the weekend," Brooks told Full Disclosure.
Sunday night saw the Roman Block Party at Giuseppe Arnaldo & Sons, marking the end of the Melbourne Food and Wine Festival.
Nick Bolton, of BrisConnections fame, turned up for that one — taking a much-needed break from a week in court.
The big parties start this week with the arrival of the formula one circus.
TAG Heuer hosts a soiree at Le Bar on Thursday night, with Lewis Hamilton the star attraction, but it's the return of Mercedes-Benz trackside that is the hottest ticket in town.
After two years away from the track, the Mercedes-Benz Star Bar will take a position at corner 12 for the race, with a post-race party for about 250 of its customers.
"We have been away from the race for a while and the Grand Prix organisers have been trying hard to get us back, but we really wanted something special for our customers," said managing director Horst von Sanden. "This is it, our own place at the track, with one of the best views of the race."