20/08/2020 - 23:18

Court approves Bell Group deal

20/08/2020 - 23:18

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The Supreme Court has approved a settlement of the long-running Bell Group dispute that will see $1.9 billion distributed to five major creditors.

Court approves Bell Group deal
WA Treasurer Ben Wyatt.

The Supreme Court has approved a settlement of the long-running Bell Group dispute that will see $1.9 billion distributed to five major creditors.

Yesterday’s court ruling comes 29 years after Bell Group collapsed.

Since then, lawyers have been paid an estimated $400 million as banks and creditors fought over the carve-up of the once high-flying company.

The complex settlement agreement was detailed in a 380-page explanatory statement prepared by liquidator Tony Woodings and law firm Ashurst.

The largest payment, of $667.2 million, will go to the Insurance Commission of Western Australia.

This comes more than 30 years after ICWA (formerly the SGIC) acquired a series of subordinated Bell Group bonds as part of a WA Inc deal.

Two of the biggest beneficiaries are investors who bought control of Bell Group subsidiaries or Bell Group debts after the group had collapsed.

Bell Group NV, which was incorporated in the tax haven of Curacao and is backed by Dutch investor Louis Reijtenbagh, will be paid $619.6 million.

WA Glendinning & Associates, which counts Perth business executive Hugh McLernon as a director, will receive $110 million.

Its status as a creditor stemmed from a 1992 deal in which WAG bought debts owed by Bell Group to West Australian Newspapers (now Seven West Media) and its subsidiary Albany Advertiser Pty Ltd.

Bell Group UK, which was placed in liquidation in 1995, will be paid $100 million.

The Australian Taxation Office will get a $410 million return.

The net return to the Insurance Commission will be substantially lower than the gross payout as it spent about $200 million over the past 25 years to cover legal costs, effectively on behalf of all creditors.

Bell Group NV contributed a modest $20.5 million towards the legal costs, the ATO contributed $4.2 million and WAG contributed nothing.

Yesterday’s court hearing came eight months after the major creditors signed a deed of settlement.

Mr Woodings, as Bell Group liquidator, is expected to distribute the funds to creditors in September.

Treasurer Ben Wyatt, who attended part of yesterday’s hearing, cautiously welcomed the court ruling.

“The decision today means that the settlement terms have been approved by all parties and the courts,” he said.

“This process is not over yet and won’t be until funds are received by the Insurance Commission of Western Australia.”

Mr Wyatt said he was pleased to have played a role in helping to bring the long-running saga to an end.

“Upon becoming Treasurer in 2017 it was clear to me that a resolution was only possible through a genuine desire by all parties to reach a settlement,” he said.

“The dispute had already gone for longer that the Vietnam War.

“I was the seventh Western Australian Treasurer to deal with this issue.

“I did not want to hand it over to an eighth.

“I’m glad the end is finally in sight.”

Bell Group was the flagship company of famed 1980s entrepreneur, Robert Holmes a Court.

After the 1987 stockmarket crash and Mr Holmes a Court’s death, it was taken over by another Perth entrepreneur, the late Alan Bond.

Bell Group collapsed in 1991 and its banks subsequently recovered $265 million from asset sales, leaving nothing for other creditors.

In 1995, Mr Woodings commenced legal action against the banks, claiming they knew Bell Group was insolvent when they obtained security over its assets.

The creditors won the fight against the banks in 2014 and since then the creditors have been fighting among each other over the carve-up of the money they recovered from the banks.

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