Ascent suing Tennyson directors

Two former directors of Tennyson Networks are being sued for $9.8 million by the company’s new directors – the Western Australian-based Ascent Capital team of David Steinepreis, Gary Steinepreis and Hugh Warner.

The writ, lodged in the WA Supreme Court, relates to the amount of money Neoside Pty Ltd, a company linked to the Australian Stock Exchanged-listed Tennyson Networks’ former directors John Fletcher and Geoff Rubython, said it could raise last year to help keep Tennyson out of liquidation.

At that stage the former dot.com darling was in administration with debts of about $4 million.

Mr Fletcher declined to comment on the legal action other than to say the matter was "subject to negotiation".

David Steinepreis told WA Business News the legal action was part of the deed of company arrangement Ascent had put to Tennyson’s administrator Nicholas Brooke of Price-waterhouseCoopers.

"We’ve undertaken to sue these people," he said.

"The majority of those proceeds will go to the administrator."

The legal action is the only undertaking Ascent made to Mr Brooke. It has paid no other funds.

However, there is no guarantee of any funds for Tennyson creditors arising from the legal action.

Mr Steinepreis said the legal action would be likely to cost $7,500 to get to the summary judgement stage, which is as far as Ascent is required to take it.

From that stage it will be clear whether there is any merit in taking the action further.

According to the Supplementary Report to Creditors, if the legal action proceeds and recovers $2 million then unsecured creditors will recover 82 cents in the dollar.

If it only recovers $500,000 then unsecured creditors will receive 22 cents in the dollar, while preferential creditors will be paid out fully.

Tennyson has been renamed Fusia Ltd and is again trading on the ASX, with its shares priced at about 1 cent.

Its Small Office Exchange telephony product has remained with Fusia.

The product simplifies computer and telephone integration, making it ideal for small business customers.

The SOX Joint venture, a partnership between Ascent Capital and CDM Australia to continue the SOX technology, has signed a heads of agreement with Metrowell Limited.

Metrowell is a combined entity between interests associated with current SOX resellers, New Zealand-based SOX New Zealand and Australian-based Interlock IT, which will trade as SOX International.

SOX International has been granted a sole and exclusive licence to the SOX Technology for 54 weeks with a right to purchase, subject to the meeting of certain financial obligations.

If SOX International elects to complete its financial obligations early, the SOX Joint Venture will be granted a non-exclusive distribution licence to the technology in Australia, thus continuing its involvement.