Packer, Murdoch still pursued for One.Tel millions
JAMES Packer and Lachlan Murdoch and their associated companies are still being pursued by One.Tel's liquidators for nearly $400 million for their involvement in the collapsed telco.
It is the final act in a liquidation process that ranks alongside Ansett, insurer HIH, Duke Group and Bell Group as one of Australia's longest-running corporate wind-ups.
The New South Wales Supreme Court's equity division will this week hear a brief notice of motion from Mr Packer's and Mr Murdoch's legal teams as well as their associated companies. A hearing date has not yet been set.
The case was lodged in June by a special-purpose liquidator who was appointed in late 2003 by the NSW Supreme Court to investigate suing the directors, including Mr Packer and Mr Murdoch, over their decision to abandon a $132 million capital raising shortly before One.Tel's collapse in 2001. The bulk of the One.Tel liquidation is being overseen by insolvency firm Ferrier Hodgson.
The case is proceeding even though the original special-purpose liquidator, Paul Weston of Pitcher Partners, was replaced by Stephen Parbery of PPB Advisory in June.
The legal action is the final act before Ferrier Hodgson can close its file on One.Tel, which has been in liquidation for more than a decade. So far 21¢ in the dollar, or $71 million, has been returned to One.Tel
creditors, according to managing partner at Ferrier Hodgson, Steve Sherman. Another 2¢ to 3¢ per dollar was expected to come, he said. However, the liquidator has so far spent $25.7 million on legal fees and expenses.
''It is a very difficult job and processes like that do not get unravelled in one year or two years,'' Mr Sherman told BusinessDay.
The case against Mr Packer and Mr Murdoch is being funded by a third party - Hong Kong-based investor Louis Reijtenbagh.
Ferrier Hodgson is still chasing nearly $340 million on behalf of more than 1600 One.Tel creditors. The largest creditor is rival telco Optus, which was left $65 million out of pocket. Telstra, another rival, is owed $48 million.
Liquidators are currently sitting on about $15 million in cash. This is all creditors are expected to receive unless the special-purpose liquidator wins its case against the former directors.
The decade-long One.Tel liquidation is nothing compared with the 24-year-long liquidation of Duke Group, formerly known as Kia Ora Gold, which collapsed in 1989 owing $30 million.
Liquidator John Sheahan says he expects the process to be wrapped up in 2013 after it was delayed by two ''extremely lengthy'' court cases.
''It is not because we are not trying to finish [the liquidation], it is just because these trials take forever,'' Mr Sheahan said.
Shareholders who participated in the class action and Duke's creditors are expected to get all their money back, he added.
Several companies that collapsed during the global financial crisis remain in liquidation, including ABC Learning, Allco Finance, Bill Express and the Australian arm of Lehman Brothers. Craig Crosbie of PPB Advisory, who is running the Bill Express liquidation, said he was confident the banks would be paid back all the funds owed to them and secured creditors would still see a ''substantial dividend''.
Although liquidations might take a long time, it was always continued with the approval of creditors, Mr Crosbie said.
''The committee of creditors or the courts would approve the remuneration of the liquidators doing these cases. In addition to this we have the Australian Securities and Investments Commission, who are meeting liquidators and they have their reporting regime, which [liquidators] must adhere to,'' he said.
With GEORGE FILOPOULOS