26/02/2020 - 18:30

Moran turned down $2m settlement

26/02/2020 - 18:30

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The Supreme Court has disclosed that company director Russell Moran could have settled his dispute with broking firm Argonaut by paying $2 million; instead he went to trial and has now been ordered to pay in excess of $37 million.

Moran turned down $2m settlement
Russell Moran

The Supreme Court has disclosed that company director Russell Moran could have settled his dispute with broking firm Argonaut by paying $2 million; instead he went to trial and has now been ordered to pay in excess of $37 million.

In a ruling handed down on Wednesday, Justice Jeremy Allanson ordered Mr Moran to pay $37.1 million plus interest at the rate of five per cent a month until the debt is settled.

He indicated Mr Moran was unlikely to be able to pay the debt.

“A judgment will now be entered for more than $37 million against an individual, who is unlikely to be able to satisfy the primary judgment,” he stated.

“The current exercise in determining the basis on which Mr Moran is to pay costs is, patently, futile.

“The application has been made, however, and I must deal with it.”

The ruling also disclosed that Mr Moran was given an opportunity to settle the dispute in July 2019, in the days leading up to the trial.

“There can be no doubt that the offer was reasonable, with the Argonaut parties agreeing to accept $2 million inclusive of costs, interest and GST to effectively settle both the claim and the counterclaim,” Justice Allanson found.

“It was, in my opinion, unreasonable to reject the offer.”

On this basis, he ordered Mr Moran to pay costs incurred by Argonaut entities defending his counterclaim.

Justice Allanson said his only reservation was whether it was reasonable to expect Mr Moran to pay $2 million within a comparatively short time. 

“He has, however, not chosen to adduce any evidence as to whether he had the capacity to meet the proposed settlement,” he added.

Today’s ruling follows a judgement against Mr Moran earlier this month.

In the primary judgement, Justice Allanson agreed that Mr Moran was liable to repay his debt to Argonaut, including the penalty interest rate of five per cent per month.

The dispute stemmed from a $6 million loan taken out by Mr Moran in 2014, when he was a director of listed company Atrum Coal.

The loan was arranged by Argonaut on behalf of a group of private lenders, with the largest being Hoperidge Capital.

When Mr Moran failed to service the loan, the lenders exercised their security and sold his Atrum Coal shares in December 2016.

That left a residual debt, which has grown rapidly because of the high rate of interest.

Mr Moran is currently non-executive chairman of ASX-listed MetalsTech, with a holding of 18.3 million shares worth about $900,000.

 

 

 

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