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December 14, 2007 |
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HIH INSURANCE: Liquidator May Succeed in Recouping AU$295 Mil. HIH Insurance liquidator is one step closer to a hearing, after the matter of how to deal with the thousands of documents involved in the case was resolved, Susannah Moran writes for The Australian. According to the report, HIH liquidator Tony McGrath is suing a number of parties through the New South Wales Supreme Court, including former FAI chief executive Rodney Adler, investment bank Goldman Sachs and former Goldman executives Malcolm Turnbull and Russel Pillemer. Mr. McGrath, according to The Australian, is seeking to recoup the AU$295 million purchase of FAI in 1998 by HIH, plus interest. Mr. Adler, who owns the insurance company FAI, was also the former director of HIH. The report states that Mr. Adler has yet to file his defense, and was given an extension of time until the end of January. Tony Bannon SC, the barrister of Goldman Sachs, Mr. Turnbull and Mr. Pillemer revealed that part of their defense would be to rely on transactions involving HIH's operations in New Zealand and dealings it had with FAI executives, relates The Australian. The report says that Mr. Bannon argued in court for a "general" discovery order prior to the hearing, saying the matter involved complex issues and was of "extreme importance" to his clients, who wanted the benefit of all inquiries made by HIH's liquidator. The Australian further adds that Alan Sullivan QC, HIH's barrister, explained that if the discovery process was to proceed as suggested by Mr. Bannon, they would have to go through "literally millions of pages of documents" at an "enormous cost." The presiding judge rejected Mr. Bannon's arguments, wherein the matter will return to court next year. About HIH Insurance HIH Insurance Limited -- http://www.hih.com.au/ -- the holding company of the HIH Group, was a publicly listed company in Australia. Prior to its collapse, the HIH Group was known as the second largest general insurer in Australia, and had operations in many other countries. On March 15, 2001, the HIH Group failed, with a deficiency now believed to be between AU$3.6 billion and AU$5.3 billion. Provisional liquidators were appointed to HIH Insurance Limited and many of its subsidiaries. Other insolvency practitioners were appointed to various group companies incorporated in other parts of the world. In August 2001, the major Australian companies in the HIH Group were placed into liquidation. On March 29, 2006, meetings of the creditors of the eight companies in the HIH Insurance Group approved the Australian Schemes of Arrangement for those companies. Moreover, separate meetings of creditors of four HIH Insurance Group companies with branches in the United Kingdom approved English Schemes for those companies. HIH's collapse is known to be the nation's biggest corporate failure. |
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