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BBL creditors and noteholders want action

Solid support to fund Liquidator investigations, Liquidator extend deadline


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The creditors and noteholders of Babcock & Brown Limited (BBL) have provided solid support to fund further investigations by Deloitte partners and Babcock & Brown Liquidators, David Lombe and Simon Cathro.

A significant number of creditors have paid funds surpassing $300,000 to the Liquidators following their call in August to creditors and noteholders for the establishment of a fighting fund to investigate and pursue recovery actions for the benefit of creditors.

Mr Lombe indicated that the funds raised will enable preliminary public examinations of Directors, senior management and other relevant persons to be undertaken in the near term.

“Clearly, creditors want action,” he said. “In fact, some creditors have indicated they are prepared to contribute funds above the $400.

“In my 20 years of experience as a Liquidator, I have not experienced this level of support by creditors; particularly as they are contributing money out of their own pockets after having already suffered significant financial losses,” said Mr Lombe.

“Creditors want to see Directors in the witness box. They want an explanation for how Australia’s second largest investment firm incurred in excess of $5 billion in losses for the 12 months ended 31 December 2008.”

In August, the Liquidators outlined a range of matters they wish to investigate further, including:

  • Potential conflicts of interest between the Boards of BBL and BBIPL
  • The possibility of inadequate disclosure regarding public offer documents
  • A review of the risk management processes and policies in relation to the business model
  • A review of the overall solvency of the group at various points and associated issues, and
  • An investigation of the timings of impairments of assets.

The Liquidators will be extending the deadline to allow additional contributions to be made.

“Additional contributions will enable us to undertake substantial further investigations and conduct a more extensive examination of relevant persons,” he said.

Mr Lombe and Mr Cathro have indicated that public examinations may commence as early as November 2009.

Key dates in the Liquidation of Babcock & Brown Limited

13 March 2009 Deloitte Corporate Reorganisation Group Partners David Lombe and Simon Cathro appointed as Voluntary Administrators of Babcock & Brown Limited
25 March 2009 First meeting of creditors
8 April 2009 Extension for convening period for the second creditors meeting from Federal Court of Australia
29 April 2009 Resignation of Directors
10 June 2009 Babcock & Brown Limited delisting announcement from the Australian and NZ Stock Exchanges and statement regard (tax options) released
  17 June likely delisting of ASX
  24 June likely delisting of NZX
13 August 2009 Report to creditors (Voluntary Administrators 439A Report)
24 August 2009 Second creditors meeting and resolution that BBL be wound up
15 September 2009 Initial closing date for noteholder contributions to funding


Relevant website links:

Last Updated: 

Contacts

Name:
Karina Randall
Company:
Deloitte Australia
Job Title:
Corporate Affairs & Communications
Phone:
Tel: + 61 2 9322 3778, Mobile: +61 414 823 712
Email
karandall@deloitte.com.au

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