Snapshots
News from the industry.

By Kath Walters, Bruce Andrews
BRW. 21 October 2004

Unpaid creditors are banding together to try to put an end to abuses
of insolvency laws. Nick Bishop, a former employee of a listed
company, Open Telecommunications, has established an e-mail group
demanding changes to legislation and sharing ways to counter "legal
tricks", which he says administrators can use to prevent employees
and creditors from getting their entitlements.

Bishop was a software engineer at Open Telecommunications when the
company went into voluntary administration in April 2002. The
administrators revived the company, but Bishop says some employees
were made redundant and others were offered a job in the company if
a deed of company arrangement was approved. The deed was approved.
Bishop says redundant employees received 43¢ in the dollar, but he
says he and others had to fight to get their redundancy and
superannuation entitlements.

Bishop says insolvency laws are too complex, and his e-mail group is
intended to help inform creditors who find the process daunting and
cannot afford legal advice. "There are complications in the
provisions in the laws allowing creditors to take action that hinge
on complex descriptions of discrimination or unfair behavior," he
says.

Bishop's group, which he calls Unpaid Mushrooms, is lobbying to
change the insolvency laws. Bishop says companies coming out of
administration must pay creditors 100% of debts.

He says: "If a company is trading out, creditors should eventually
be paid 100¢ in the dollar, even if it takes some time. A company
that is viable should be profitable."


The e-mail group, originally called OTMushrooms, was started for
Open Telecommunications employees 18 months ago. Bishop is expanding
the group for anyone struggling through insolvency. Membership is
free at: http://yahoogroups.com.au/groups/otmushrooms.