Centro has multi-tier debt and is attempting to refinance short-term borrowings of $3.9 billion, and is also facing possible shareholder class actions over what it said about its condition. The law firm Maurice Blackburn has already said that such an action is being contemplated.
It is important to note that sources say Centro, its banks and bondholders (the latter coincidentally represented by ABL) are working constructively towards meeting Friday's debt extension deadline. The possibility of a Sons of Gwalia-style claim by shareholders has been discussed, but is not considered a serious problem.
But the recapitalisation task for a company like Centro has to be tougher when, as ABL's Zwier says, there is a "substantial unknown liability represented by the shareholder claims, which, by reason of the SOG decision, rank pari passu with all other creditors". He says changes to the law to allow the postponement of shareholder claims is a solution.
