B&B collapse hearing nears COLIN KRUGER
June 2, 2010
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A LONG-AWAITED public examination of the collapse of Babcock & Brown is expected to get under way in July, according to the failed investment group's liquidators.
A meeting of the creditors' committee was told the examinations - initially expected to begin in November last year - are being delayed from their July 5 start ''due to the unavailability of potential examinees'' and a short deferment is expected.
''The public examinations are now likely to commence on the week of 19 July 2010 and the first week of August 2010,'' said a report lodged with the Australian Securities and Investments Commission this week.
Advertisement: Story continues belowBabcock & Brown collapsed in March last year with billions of dollars of debt.
The public examination is being funded by furious Babcock noteholders who stand to receive nothing of the $600 million they lent Babcock, which was revealed to be a shell company with few assets.
Their unsecured loan is subordinated to a $3.2 billion bank debt secured against the Babcock subsidiary that housed the operating business and all its assets, Babcock & Brown International.
The liquidators, led by Simon Cathro and Colin Drew of Deloittes, told the creditors' committee that the $550,000 raised from the noteholders is sufficient to complete the nine-day public examination.
The liquidators confirmed they were pursuing unfair preference claims and said ''these claims are being pursued through the normal channels''.
Mr Cathro also said there had been strong interest from potential litigation funders ''relating to various causes of action''.
The examination will be conducted in Sydney's Federal Court with a cast of former Babcock executives and board members called to the stand, including former Babcock chief executive Michael Larkin, his predecessor, Phil Green, and former chairman Jim Babcock.
They are expected to be questioned about potential conflicts of interest involving Babcock and BBIPL, as well as alleged breaches of the Corporations Act.
A $40 million loan Babcock made to stockbroker Tricom in 2008 is also expected to come under scrutiny.
Mr Cathro said the liquidators had maintained regular contact with ASIC, which has been conducting its own investigation of the collapse.
Source: The Age
http://www.businessday.com.au/business/bampb-collapse-hearing-nears-20100601-wve6.html
BNB
babcock & brown limited
