US law firms to continue Bell Group saga

The state government has muscled up for the renewal of legal battles over the $1.7 billion Bell Group dispute, appointing two US law firms, including one that promotes itself as being tougher and scarier than its peers, to handle the matter.

Quinn Emanuel Urquhart & Sullivan, which is described as the largest law firm in the world devoted solely to business litigation and arbitration, has been appointed to represent the Insurance Commission of Western Australia, along with Jones Day.

The appointments come four months after the High Court threw out a state government scheme to settle the long-running Bell Group dispute.

They indicate there is no end in sight to the legal dispute, which goes back to 1991 when a syndicate of banks put Alan Bond’s Bell Group into receivership.

Jones Day, which opened a Perth office in 2014, has 2,500 lawyers in 44 locations around the world.

Quinn Emanuel, which has a Sydney office but no presence in Perth, promotes itself as being ‘better, faster, tougher, scarier’ and boasts an 88 per cent win rate in trials and arbitrations.

Insurance Commission chief executive Rod Whithear said the US firms would act in new and emerging litigation under way in various Australian courts and in related litigation it may pursue or have to defend in other countries.

“Numerous mediation attempts between liquidators and major Bell Group creditors have been unsuccessful,” he said.

“As we predicted, further litigation has begun and more is threatened, so we have resourced up to tackle the issues in multiple courts for as long as is necessary.’’

Mr Whithear said the Insurance Commission remained keen for a settlement that delivers a fair return to creditors and finality to the long-running saga.

“However, we have observed the recent efforts made by others to broaden and increase litigation, and will protect longstanding agreements and rights through the courts to the extent necessary,’’ he said.

‘We look forward to working with Quinn Emanuel, Jones Day and the State Solicitor’s Office to assist the Insurance Commission pursue its interests in the Bell Group liquidations."

The state government had attempted to end the Bell Group dispute by introducing legislation last year to create a special administrator.

The role of the administrator was to decide how $1.7 billion paid out by the banking syndicate should be carved up between Bell Group’s creditors.

The biggest winner from the proposed carve up was the Insurance Commission, which was in line for a $930 million payout after funding much of the litigation against the banks.

Other creditors included the Australian Taxation Office ($156 million) and groups associated with Dutch billionaire Louis Reijitenbagh ($652 million) and Perth-based Hugh McLernon ($50 million).

However, the High Court ruled in April the state legislation was invalid.

Bell Group was the flagship company of the late Robert Holmes a Court, but it came under the control of another prominent Perth entrepreneur, Alan Bond, after the 1987 stock market crash.

The legal action against the banks was started in 1995 by Bell Group liquidator Tony Woodings.

Mr Woodings’ key claim was that two banking syndicates, including Westpac, Lloyds, National and Commonwealth, knew that Bell Group was insolvent when they obtained security over its assets in 1990.

The banks put Bell Group into receivership in 1991 and subsequently recovered $265 million from asset sales, leaving nothing for other creditors.

The dispute with the banks was settled in 2014, leaving an amount of $1.7 billion (adjusted for inflation and interest) for distribution between the creditors.