opes, page-46

AAP
October 15, 2008 03:56pm
FAILED stockbrokers Opes Prime are liquidating after a resounding vote by creditors.
Today's decision by Opes' creditors will enable the liquidator to pursue claims against Opes Prime's secured creditors, ANZ Bank and Merrill Lynch - that were not available to the administrator.

About 1,200 Opes clients lost shares they had placed with Opes in return for margin loans, when the major secured creditors of Opes - ANZ, Merrill Lynch, Dresdner Kleinwort - began selling a pool of nearly $1.6 billion in shares soon after the Opes collapse, in a bid to recover money owed to them by Opes.

Opes had on-loaned the shares from its clients to these secured creditors, but Opes clients believe that they had retained ownership of the shares.

Numerous Opes clients have taken their own legal action in a bid to recover their shares.

Outside the creditors' meeting, Paul Choiselat of Beaconwood Securities, said they would continue the litigation against the bank unless the outcome of the mediation was satisfactory.
Mr Choiselat said even if creditors were to receive 30 cents in the dollar - the estimated return given by the administrators in April - Beaconwood would continue its legal action.

"For us, the settlement is about the money. Thirty cents is a long way from what we would expect to generate in an outcome in a court case,'' Mr Choiselat told reporters.

The administrator of Opes Prime, Ferrier Hodgson, have been involved in talks with ANZ, Merrill Lynch and the Australian Securities and Investments Commission since August to mediate claims that a liquidator of Opes might bring, in a bid to avoid years of potential litigation.

Receivers and administrators were appointed to Opes Prime on March 27 this year after cash and stock movement irregularities were uncovered in a small number of accounts.

Opes Prime owed clients about $585 million at the time of the collapse, but due to fluctuations in the share market that figure had fallen to about $400 million on September 22, according to Ferrier Hodgson.

Ferrier Hodgson has said a liquidator would challenge a transaction between Opes Prime and ANZ under which ANZ loaned $95 million to Opes one week before Opes collapsed.

Opes used the loan to repurchase shares from the ANZ so it, Opes, could redeliver the securities to a client.

The administrator has said that the transaction would be challenged on the basis that Opes was insolvent at the time, and that it was an unfair loan and an uncommercial transaction.

They said a liquidator might be able to recover $205 million to $220 million from ANZ from various claims.