ABC liquidator takes on big banks for creditors
(2 July 2012 – Australia) A legal challenge from ABC Learning’s liquidator Ferrier Hodgson could see them punished for deftly jumping the creditors queue to claw back A$100 million before ABC went under a few months later.
Commonwealth Bank, Westpac, National Australia, ANZ, BankWest, Bank of America, Mizuho and Citibank, snatched an "oral" charge over the company’s assets.
It might be chump change for the banking syndicate if they lose the case, or more likely capitulate to a settlement, yet the A$100 million action should put insolvency types and bankers – a cosy crew who tend to work in tandem – on notice that they can’t jump the creditors’ queue quite as breezily in the future when they sniff a corporate wreck in the offing.
Taking on the Big Four on behalf of small unsecured creditors is quite the act of courage and integrity for a major insolvency firm. They make most of their money from the banks and don’t usually act against them.
It might be chump change for the banking syndicate if they lose the case, or more likely capitulate to a settlement, yet the A$100 million action should put insolvency types and bankers – a cosy crew who tend to work in tandem – on notice that they can’t jump the creditors’ queue quite as breezily in the future when they sniff a corporate wreck in the offing.
Taking on the Big Four on behalf of small unsecured creditors is quite the act of courage and integrity for a major insolvency firm. They make most of their money from the banks and don’t usually act against them.
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