Having just returned from a contract job in New Zealand I came across
the following letter from Tony Robinson MP amongst my mail.  It seems
that Tony is still fighting for justice for retrenched employees. If
anyone is interested in talking to Tony please let me know.



Richard Watson



________________________________________________________________________
_____________________________

9 June 2005



Dear Richard



GEERS



I enclose for your information a copy of a letter I have received from
the Federal Minister for Industrial Relations in response to my earlier
query about certain aspects of the General Employee Entitlements and
Redundancy Scheme.



The Minister makes a number of points, perhaps the most significant of
which is the relatively few number of cases in which Deeds of Company
Arrangements (DoCA) have disturbed the order of priority specified in
the Corporations Act.



I’d be more than happy to discuss this with you further – it may be that
given the relatively few cases in which DoCAs interfere with
distributions, a new procedure should apply to facilitate the provision
of entitlements.



Yours sincerely



Tony Robinson MP

Member for Mitcham

Enc.



Mr Tony Robinson MP

Member for Mitcham

9 Blackburn Road

Blackburn Vic 3130



1 Jun 2005



Dear Mr Robinson



I refer to your letter of 23 February 2005 concerning the legislation of
the General Employee Entitlements and Redundancy Scheme (GEERS).



The Australian Government is the first government to seriously address
the issue of employee entitlements lost as a result of an employer’s
insolvency.  GEERS was established by this Government against a
background of inaction by the Federal and State Labor parties, including
a failure by State Labor Governments to contribute to employee
entitlements support schemes.



This Government appreciates that many employees experience significant
hardship as a result of their employer becoming insolvent.  Since the
introduction of the first federal employee entitlements scheme in
January 2000, over 50 000 Australian workers have received in excess of
$615 million in assistance for their entitlements lost due to the
insolvency of their employer.



To further protect the entitlements of employees of insolvent companies
the Federal Government introduced changes into the Corporations Act 2001
which strengthened legal obligations on company directors to protect
employee entitlements and extended the prohibition on insolvent trading
to cover uncommercial transactions other than debts.  Anyone who
deliberately avoids payment of employee entitlements can now be ordered
to pay a penalty and/or compensation to employees.



GEERS does not negate the responsibility of all employers to pay their
employees’ full entitlements.  Employers are, and must remain,
responsible for the provision of entitlements to their employees,
especially to the extent that any assets are available.



You have specifically asked why GEERS is governed by Operational
Arrangements rather than legislation and/or regulations.  The practices
of directors and related parties in respect of a company’s insolvency
are constantly changing.  By remaining an administratively based scheme,
GEERS is better able to address emerging inappropriate practices which
seek to either exploit employees or derive an unwarranted benefit from
taxpayer funds used to provide GEERS assistance.



I don’t agree with your claim that the Government, through my
Department, may be able to “pick and choose those circumstances in which
the scheme will apply.”  GEERS is administered in strict accordance with
its Operational Arrangements.  My Department clearly explains the basis
for its decisions in writing on each occasion directing claimants to the
relevant clause(s) of the Operational Arrangements.  Claimants who
believe their case has not been administered in accordance with the
Operational Arrangements may appeal the departrment’s decision or apply
to the Commonwealth Ombudsman for review.



I note you ask how many cases have involved Deeds of Company Arrangement
(DoCA) that have disturbed the order of priority specified in the
Corporations Act 2001. Where a DoCA is found to alter the priority
specified in subsection 556(1) in the Corporations Act 2001, Insolvency
Practitioners are advised that this is inappropriate and initially given
the opportunity to amend the DoCA so that the priorities and protections
they contain for employees are restored, and the terms of the GEERS
Operational Arrangements are met allowing employees’ claims to be
processed.



Out of over 4000 cases processed by my Department since the introduction
of the employee entitlements safety net schemes, there have been 19
cases with DoCAs that have disturbed the order of priority specified in
the Corporations Act 2001.



I note that you have also asked for the number of times people have been
prosecuted for deliberate avoidance of liability for employee
entitlements as provided for in the Corporations Act 2001.
Unfortunately, this issue does not fall within my responsibility, I have
therefore referred this aspect of your query to the Treasurer for direct
response.



I trust this information is of assistance.



Yours sincerely



Kevin Andrews

Minister for Employment and Workplace Relations

Minister Assisting the Prime Minister for the Public Service


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Not that I have heard.  May be time to start lobbying again.

Paul

----- Original Message -----
From: "Lofstedt, Benedict" <Benedict.Lofstedt@...>
To: <otmushrooms@...>
Sent: Friday, 27 May 2005 14:47
Subject: [Unpaid Mushrooms] RE: [otmushrooms] Status of SGC payments under
the deed as at 21 May 04


> Has anyone got their super?
>
> --- benedict
>
> Benedict Lofstedt
> Computer Associates
> Sr Quality Assurance Engineer
> eTrust Admin R&D
> Tel:    +61 3 8416 5872
> Fax:   +61 3 8416 5810
> Mob:  +61 412 438 916
> Email: Benedict.Lofstedt@...
>
> -----Original Message-----
> From: Tom Northey [mailto:tn@...]
> Sent: Tuesday, 25 May 2004 11:19 AM
> To: otmushrooms@...
> Subject: [otmushrooms] Status of SGC payments under the deed as at 21
> May 04
>
> I spoke to the ATO on 21 May asking when we would get our super.  The
> news
> is pretty much the same.
>
> They are very busy on the phones fielding calls about Super
> co-contributions
> so it is hard to get to talk to someone.  However they do take your
> number
> and call back (in my case, the next day).
>
> The computer system that would allow them to transfer SGC payments to
> our
> super funds is not yet in service and is expected to be "at the end of
> May".
>
> They still cannot tell you anything about your SGC amounts.
>
> ATO do not pay interest on SGC payments delayed by ATO inaction.  You
> may
> request compensation by writing to them, detailing dates and amounts
> paid
> etc, demonstrating disadvantage by providing evidence of the income and
> growth your SGC payment would have made in your super fund for the
> period in
> question (based on the income of your super fund over that period).  It
> would appear to be easier to do this once the payment is made so you can
> actually determine the loss.
>
> Write to
>
> Australian Taxation Office
> Superannuation Section
> PO Box 277
> World Trade Centre  VIC 8005
>
> I think a letter to your local member is appropriate as well.
>
> Or put in a job application to work at the Mitsubishi engine factory in
> Adelaide to ensure you receive something from the govt.
>
> ----- Original Message -----
> From: "Tom Northey" <tn@...>
> To: <otmushrooms@...>
> Sent: Wednesday, March 17, 2004 12:41 PM
> Subject: [otmushrooms] Status of SGC payments under the deed
>
>
> > Anyone heard anything about super owed under the deed from ATO yet?  I
> > haven't.
> >
> > It hasn't magically appeared in my super fund either.
> >
> > I just checked on the ATO Super Seeker on-line superannuation search
> at
> > http://www.ato.gov.au/super/content.asp?doc=/content/33301.htm
> >
> > and it said:
> >
> > Lost Members Register    No match found
> > Tax Office Records          No match found
> >
> > I called the ATO on 131020 and they said they are (still) transferring
> to
> a
> > new computer system (it was expected to be up by February but now they
> > expect it up in 2-3 weeks).  They said the money is probably there as
> a
> > credit on the Deloitte account (but they are not permitted to check
> that
> for
> > me) and that it can't be distributed until the new system is up.
> >
> > When the money is distributed, it should automagically appear in your
> most
> > active super fund.  If you want to make sure it goes to the right
> fund,
> you
> > can contact your super fund and tell them there is some SGC money
> coming
> > through soon and they will organise with ATO to make sure it goes into
> that
> > fund.  Otherwise you don't have to do anything.  If you call ATO, they
> > cannot tell you what your most active super fund is, because that is
> on
> the
> > new computer system.
> >
> > rgds
> > Tom
> >
> >
> >
> > Reminder: this message is not private.  Anyone (including non-members
> of
> this group) can read this message in the archives.
> >
> > Useful links:
> >  OT Mushrooms home page (previous messages)
> > http://au.groups.yahoo.com/group/otmushrooms/
> >  Public file archives (Files for download)
> > http://au.geocities.com/nick4mony/otm/index.htm
> > Yahoo! Groups Links
> >
> > To visit your group on the web, go to:
> >  http://au.groups.yahoo.com/group/otmushrooms/
> >
> > To unsubscribe from this group, send an email to:
> >  otmushrooms-unsubscribe@...
> >
> > Your use of Yahoo! Groups is subject to:
> >  http://au.docs.yahoo.com/info/terms/
> >
> >
>
>
>
> Reminder: this message is not private.  Anyone (including non-members of
> this group) can read this message in the archives.
>
> Useful links:
>  OT Mushrooms home page (previous messages)
> http://au.groups.yahoo.com/group/otmushrooms/
>  Public file archives (Files for download)
> http://au.geocities.com/nick4mony/otm/index.htm
> Yahoo! Groups Links
>
> To visit your group on the web, go to:
>  http://au.groups.yahoo.com/group/otmushrooms/
>
> To unsubscribe from this group, send an email to:
>  otmushrooms-unsubscribe@...
>
> Your use of Yahoo! Groups is subject to:
>  http://au.docs.yahoo.com/info/terms/
>
>
>
>
>
> Reminder: this message is not private.  Anyone (including non-members of
this group) can read this message in the archives.
>
> Useful links:
> Yahoo! Groups Links
>
>
>
>
>
>
>

Has anyone got their super?

--- benedict

Benedict Lofstedt
Computer Associates
Sr Quality Assurance Engineer
eTrust Admin R&D
Tel:    +61 3 8416 5872
Fax:   +61 3 8416 5810
Mob:  +61 412 438 916
Email: Benedict.Lofstedt@...

-----Original Message-----
From: Tom Northey [mailto:tn@...]
Sent: Tuesday, 25 May 2004 11:19 AM
To: otmushrooms@...
Subject: [otmushrooms] Status of SGC payments under the deed as at 21
May 04

I spoke to the ATO on 21 May asking when we would get our super.  The
news
is pretty much the same.

They are very busy on the phones fielding calls about Super
co-contributions
so it is hard to get to talk to someone.  However they do take your
number
and call back (in my case, the next day).

The computer system that would allow them to transfer SGC payments to
our
super funds is not yet in service and is expected to be "at the end of
May".

They still cannot tell you anything about your SGC amounts.

ATO do not pay interest on SGC payments delayed by ATO inaction.  You
may
request compensation by writing to them, detailing dates and amounts
paid
etc, demonstrating disadvantage by providing evidence of the income and
growth your SGC payment would have made in your super fund for the
period in
question (based on the income of your super fund over that period).  It
would appear to be easier to do this once the payment is made so you can
actually determine the loss.

Write to

Australian Taxation Office
Superannuation Section
PO Box 277
World Trade Centre  VIC 8005

I think a letter to your local member is appropriate as well.

Or put in a job application to work at the Mitsubishi engine factory in
Adelaide to ensure you receive something from the govt.

----- Original Message -----
From: "Tom Northey" <tn@...>
To: <otmushrooms@...>
Sent: Wednesday, March 17, 2004 12:41 PM
Subject: [otmushrooms] Status of SGC payments under the deed


> Anyone heard anything about super owed under the deed from ATO yet?  I
> haven't.
>
> It hasn't magically appeared in my super fund either.
>
> I just checked on the ATO Super Seeker on-line superannuation search
at
> http://www.ato.gov.au/super/content.asp?doc=/content/33301.htm
>
> and it said:
>
> Lost Members Register    No match found
> Tax Office Records          No match found
>
> I called the ATO on 131020 and they said they are (still) transferring
to
a
> new computer system (it was expected to be up by February but now they
> expect it up in 2-3 weeks).  They said the money is probably there as
a
> credit on the Deloitte account (but they are not permitted to check
that
for
> me) and that it can't be distributed until the new system is up.
>
> When the money is distributed, it should automagically appear in your
most
> active super fund.  If you want to make sure it goes to the right
fund,
you
> can contact your super fund and tell them there is some SGC money
coming
> through soon and they will organise with ATO to make sure it goes into
that
> fund.  Otherwise you don't have to do anything.  If you call ATO, they
> cannot tell you what your most active super fund is, because that is
on
the
> new computer system.
>
> rgds
> Tom
>
>
>
> Reminder: this message is not private.  Anyone (including non-members
of
this group) can read this message in the archives.
>
> Useful links:
>  OT Mushrooms home page (previous messages)
> http://au.groups.yahoo.com/group/otmushrooms/
>  Public file archives (Files for download)
> http://au.geocities.com/nick4mony/otm/index.htm
> Yahoo! Groups Links
>
> To visit your group on the web, go to:
>  http://au.groups.yahoo.com/group/otmushrooms/
>
> To unsubscribe from this group, send an email to:
>  otmushrooms-unsubscribe@...
>
> Your use of Yahoo! Groups is subject to:
>  http://au.docs.yahoo.com/info/terms/
>
>



Reminder: this message is not private.  Anyone (including non-members of
this group) can read this message in the archives.

Useful links:
  OT Mushrooms home page (previous messages)
http://au.groups.yahoo.com/group/otmushrooms/
  Public file archives (Files for download)
http://au.geocities.com/nick4mony/otm/index.htm
Yahoo! Groups Links

To visit your group on the web, go to:
  http://au.groups.yahoo.com/group/otmushrooms/

To unsubscribe from this group, send an email to:
  otmushrooms-unsubscribe@...

Your use of Yahoo! Groups is subject to:
  http://au.docs.yahoo.com/info/terms/

Today it became official (in the pipeline for a few weeks).
Telstra have offcially dumped openCI, after 6 years of failed operation.

What more need I say ??

nick4mony wrote:
> Wayne Passlow has made his next move.  He's created an entity
> called OT Holdings, to make an offer of 41c per (modern) OT
> share.

Open Tel rejects founder's offer
By Colin Kruger
May 6, 2005

The independent directors of Open Telecommunications have rejected
the $7.4 million takeover bid by company founder Wayne Passlow and
Macquarie Bank, despite the independent expert's report finding the
41c per share offer was "fair and reasonable".

"The independent directors believe that the offer from the bidder
undervalues your company," said Open Telecom chairman Terry
Cuthbertson in the Target's Statement to the Australian Stock
Exchange late yesterday.

"The offer is opportunistic and seeks to gain the benefit of the
turnaround in Open Telecommunication's business before it is
properly reflected in Open Telecommunication's share price," the
statement said.

The directors said the offer did not reflect an appropriate premium
for control of the company and is less than the 48c per share value
calculated by Patersons Securities, which does not include a control
premium.

The Target's Statement said the bid offered only a 2.5 per cent
premium to the volume-weighted average share price for the four
weeks to March 8. The statement noted that the share price from
March 8 to March 23 fell due to trading by an associate of the
bidders and should be excluded from any calculations of a premium.
The bid was launched on March 29.

The directors said control premiums were typically in the range of
25 to 35 per cent and noted that Open Telecom had spent more than
$70 million developing its technology since 1999. "A competitor
attempting to enter the market may take up to two years to develop
alternative software," the statement said.

The independent expert, KPMG, said its finding took into account the
$30 million spent on product development in the past three years as
well as $17.4 million worth of tax losses, to which it gave no value.

Mr Passlow and Macquarie own 21.5 per cent of Open Tel.

http://tinyurl.com/dacnm
which is
http://www.smh.com.au/news/Business/Open-Tel-rejects-founders-
offer/2005/05/05/1115092628782.html

nick4mony wrote:
> Wayne Passlow has made his next move.

Wayne together with Macquarie Bank - they own or will own 90% of OT
Holdings (see the bidder's statement).

> He's created an entity called
> OT Holdings, to make an offer of 41c per (modern) OT share.
>
> I'll have to plot the share splits and consolidations, and
> normalise the prices, but that sounds like a pittance (even if
> it is a 24% premium to the current on-market price).

Have a look at the chart (which caters for splits and
consolidations):
http://tinyurl.com/b8kgp
which is
http://www.asx.com.au/asx/research/ChartsSearchAndResults.jsp?
postback=true&asxCode=OTT&compare=index&indices=XJO&compareCode=&Time
Frame=M10&chart.x=48&chart.y=12

The 41c compares to the $1.30 (in today's prices) paid in the rights
issue and the $1.00 paid in the placement by the so-
called "sophisticated investors" (a corp law term for people who
qualify to invest without the protection of a prospectus).

There was a 5 to 1 split on 20 April 2000 so shares originally cost
$20 in the float in today's prices (originally shares were $1, then
there was a 5 to 1 split, i.e. 20c, then a 100 to 1 consolidation
i.e. $20).

Shares went as high as $380 in today's prices.  Now they are worth
41c.  The lowest exercise price of any of the employee options was
$20 in today's prices.

Also see http://tinyurl.com/7uw65
which is
http://www.smh.com.au/news/Business/When-we-went-
pop/2005/04/12/1113251627650.html

Wake up, everybody.

Wayne Passlow has made his next move.  He's created an entity called
OT Holdings, to make an offer of 41c per (modern) OT share.

I'll have to plot the share splits and consolidations, and normalise
the prices, but that sounds like a pittance (even if it is a 24%
premium to the current on-market price).

Nick Bishop.
-----
In times of universal deceit (1), telling the truth becomes a
revolutionary act.
(1) and in the real estate industry.
-oOo-

The following letter from Tony Robinson, Victorian State Member for Mitcham,
may be of interest.



Richard Watson

Systems Engineer

Oscmar International Ltd

Auckland New Zealand

Phone +64 9 379 0360 ext 736

Mobile +64 212 073 165



____________________________________________________________________________
________________________

Richard,



The fight continues. I’ve sent a copy of earlier letter back to Minister and
sought his advice why the scheme is governed by “Operational Arrangements”
rather than legislation and/or regulations.



Regards

Tony Robinson



Mr Tony Robinson MP

Member for Mitcham

9 Blackburn Road

Blackburn Vic 3130



9 Feb 2005



Dear Mr Robinson



I refer to your letter of 7 December 2004 concerning General Employee
Entitlements and Redundancy Scheme (GEERS) claims from former workers of
Open Telecommunications (Open Tel).  Your letter was addressed to Michael
Maynard, Assistant Director with the Department of Employment and Workplace
Relations.



Unfortunately my department has no record of any correspondence from you
dated 28 August 2003 to Mr Maynard.  I am able, however, to provide you with
information regarding the outcome of claims for GEERS assistance by former
Open Tel employees.



My department administers GEERS in accordance with the GEERS Operational
Arrangements (OAs).  The GEERS OAs set out the Scheme’s eligibility
requirements and assistance limits.  The OSs are publicly available on the
Australian Workplace website: HYPERLINK
"http://www.workplace.gov.au/"www.workplace.gov.au .



The creditors of Open Tel voted for a Deed of Company Arrangement (DoCA),
the terms of which were inconsistent with the GEERS OAs.  Consequently, my
department was unable to provide former Open Tel employees with GEERS
assistance.



To meet GEERS requirements, all funds made available under a DoCA,
irrespective of their source, must be distributed in a manner that does not
decrease the payment priority of employee creditors below that prescribed in
section 556 of the Corporations Act 2001 (the Act).  In the case of Open
Tel, the directors of the company, via the administrators, put forward a
DoCA that altered the priority order set out in the Act.



I am further advised that my department was not provided with access to this
DoCA until after creditors of Open Tel had agreed upon it.  Once the
department was provided with a copy of the DoCA, and it was clear that it
was in conflict with the GEERS OAs, my department wrote to the administrator
advising that in order to obtain GEERS assistance, an amendment to the DoCA
would be required.  The Open Tel directors declined to amend the DoCA.



It is the actions of the Open Tel directors that have denied the former
employees of Open Tel access to GEERS and not any alleged deficiency of the
GEERS scheme.



I hope this information satisfies your request.  If you wish to forward a
copy of the earlier correspondence you cite, and have any particular issues
not covered in my response above, I would be happy to provide further
information.



Yours sincerely



Kevin Andrews

Minister for Employment and Workplace Relations

Minister Assisting the Prime Minister for the Public Service






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Change of email address Please



   _____

From: Paul Davis [mailto:p.s.davis@...]
Sent: Sunday, 6 February 2005 9:44 PM
To: otmushrooms@...
Subject: [Unpaid Mushrooms] Super



The ATO still have no idea when they will be able to release our super. Has
anyone heard any other news?

regards

Paul




Reminder: this message is not private.  Anyone (including non-members of
this group) can read this message in the archives.

Useful links:




   _____

Yahoo! Groups Links

* To visit your group on the web, go to:
http://au.groups.yahoo.com/group/otmushrooms/

* To unsubscribe from this group, send an email to:
otmushrooms-unsubscribe@...
<mailto:otmushrooms-unsubscribe@...?subject=Unsubscribe>

* Your use of Yahoo! Groups is subject to the Yahoo!
<http://au.docs.yahoo.com/info/terms/>  Terms of Service.



[Non-text portions of this message have been removed]

The ATO still have no idea when they will be able to release our super. Has
anyone heard any other news?

regards

Paul

Today's Australian reports on the POL Corporate Publications
administration, and POL must be in the running for the 2005
award for Brazen Behaviour by Bankrupt Businesses:

"Creditors may have found the timing of POL's first creditors'
meeting - Christmas Day - inconvenient".

More in The Australian at
http://tinyurl.com/5fhyv
which is
http://www.theaustralian.news.com.au/common/story_page/0,5744,1206172
0%5E7582,00.html

Hi,

I got 200 more brochures printed today (Leaflet3.doc) and headed to
the ION creditors' meeting.

I got all those out, plus about 130 of the old brochures.  I've had an
SMS message from an engineering firm (meaning they've had a bit of a
nosey here).

First was the Collins St venue. Got a fairly good takeup rate for
people going into the building, for about one hour, until some guys
from inside the building asked me if I had a hawkers permit (no...).
I asked them who they were, and while they were a little cagey, they
said they were from an organisation that manages the building.  They
asked me to move along to one side, which I did for five minutes.

It's nice to know I'm not wanted!

After the five minutes, I hot-footed it to the other venue
(Southgate), where I stayed about half an hour without being hassled,
although it was more difficult to discriminate creditors from others.

A fairly good exercise all up.

Nick Bishop.
-----
From a bankruptcy file: OCCUPATION - Outlawed Neighbour
-oOo-

(NB: The Border Mail operates in the Albury/Wodonga area, where ION
has a factory with about 700 employees. I might also get a
full-blooded story in, too)

http://www.bordermail.com.au/newsflow/pageitem?page_id=857662

Thu, Dec 09, 2004

Information for ION staff

I NOTE that ION is in voluntary administration.

I operate an e-mail list called Unpaid Mushrooms that will be of
interest to most of IONs 3000 employees.

Its purpose is to inform employees and creditors who find the
voluntary administration process daunting and cannot afford legal advice.

We also lobby government in a bid to make insolvency law simpler for
creditors.

We can help keep an eye on the administrators who might otherwise
cause problems for employees claiming GEERS the government scheme set
up to pay workers in failed companies.

The group helps keep employees informed.

This group, formerly called OT Mushrooms, operates without any funding
whatsoever.

ION employees (or anyone else) can join for free, or just browse on
http://yahoogroups.com.au/groups/otmushrooms/

NICK BISHOP,

Vermont South

People,

I intend to distribute a new version of my leaflet outside the Ion
creditors meetings.

If anyone wants to comment, I would prefer comments before 11:00am
tomorrow (Friday) morning.  You can read the text version below, or
download the word version.

Also, I need a volunteer or two to cover the two Melbourne meetings
(Monday 12:00noon to 2:00p, either Sheraton Towers Southgate, or Savoy
Ballroom Grand Hyatt Hotel 123 Collins St, Melbourne). The intent is
to hand out leaflets outside these venues.  Let me know if you can help.

The meetings start at 2pm, but registration starts at 12 noon.

Contact details
  email: grad.com @ nick4mony (swap before use)
  mobile/SMS: 0438 366342
OpenVictims members will shortly receive landline telephone numbers as
well.

Leaflet content, Word format:
  http://au.geocities.com/nick4mony/otm/Leaflet3.doc
Leaflet content, Word-inside-zip:
  http://au.geocities.com/nick4mony/otm/Leaflet3.zip

Text version, SIDE 1:
=====================
YOU ARE ABOUT
TO BE
RIPPED OFF

Don't save the trees,
Don't save the whales,
SAVE YOURSELF

Insolvency law does not protect creditors



About to go into a meeting?
Quick hints to get a better deal, at the FIRST meeting:
* Replace the Administrator with a different one. If another creditor
comes prepared with a replacement Administrator, you should probably
support them.
* Join the Creditors' Committee - this is your only chance to do so.
Be wary of letting the H.R. Manager represent the interests of
employees. Choose an outspoken, assertive person from your group of
creditors, or nominate yourself.
* Exchange contact details with other creditors.

Quick hints to get a better deal, at the SECOND (or reconvened) meeting:
* Avoid voting for a Deed of Company Arrangement, unless you have
independent advice that it preserves your rights (eg GEERS payments),
and it pays you in full.
* If liquidation is unpalatable, but the proposed Deed is
untrustworthy, vote to Adjourn the Meeting, or End the Administration.
This buys more time, or enables another chance at replacing the
Administrator.
* Creditors have the right to replace the Administrator with a
different Liquidator or Deed Administrator (as the case may be). If
another creditor comes prepared with such a replacement, you should
probably support them.
* Exchange contact details with other creditors.
After the meeting ...
Log into the Unpaid Mushrooms web site for more hints and information.


Text version, SIDE 2:
=====================
The way forward: a simple law
Insolvency law is too complex, and most creditors only deal with an
insolvency process once in their lifetime.  We demand these things:
* A simple definition of insolvency - making it easier for any
creditor owed an overdue debt to take action.
* A random or round-robin allocation of Administrators to insolvency
cases. That way, Directors have no control over the appointment.
* Any option that involves the company trading out must achieve 100%
payment of debts.

Stop the abuses
* Legal trickery
* Phoenix company fraud
* Deeds of Company Arrangement - often a different form of Phoenix
company fraud.
* Biased Administrators (or other professionals)


Further Action
Find out what other creditors are going through ...
Browse or join the Unpaid Mushrooms email group
http://yahoogroups.com.au/groups/otmushrooms/

Contact your M.P. and let them know insolvency law is an issue.

Write a letter to a newspaper

Contact the author, Nick Bishop otmushrooms-owner@...

Volunteers always welcome


About Unpaid Mushrooms
Nick Bishop set up this email-based group, originally named OT
Mushrooms, in response to the (partial) collapse of Open
Telecommunications. With this group, we broke the isolation that
redundant employees and other creditors often face.

This group is now open to all creditors to discuss insolvency issues.
  Join, or just browse.

Authorised by Nicholas Bishop, Suite 1104, 530 Lt Collins St,
Melbourne 3000.
Printed by Busy Bee, 6/456 St Kilda Rd, Melbourne 3004.

Sir,

I note with interest that car-parts maker Ion has entered Voluntary
Administration.  I operate an email list, called Unpaid Mushrooms,
that will be of interest to most of Ion's 3000 employees, whose
purpose is to inform employees and creditors who find the Voluntary
Administration process daunting, and cannot afford legal advice.

We also lobby the government in a bid to make insolvency law simpler
for creditors, and we can help keep an eye on the Administrators, who
might otherwise cause problems for employees claiming GEERS - the
Government scheme set up to pay workers in failed companies.

The group helps keep employees informed.

This group, formerly called OT Mushrooms, operates without any funding
whatsoever.  Ion employees (or anyone else) can join for free, or just
browse, on http://yahoogroups.com.au/groups/otmushrooms/

Nick Bishop, Unpaid Mushrooms list controller.
<contact details>

NB: I've still got some 130 brochures left. Looks like I've got myself
a  creditors' meeting to match.

http://www.heraldsun.news.com.au/printpage/0,5481,11624420,00.html

3000 jobs put into jeopardy
Peter Mickelburough, state politics reporter
08 Dec 2004

ABOUT 3000 workers face an uncertain Christmas after major Victorian
car-parts maker Ion went into administration yesterday.

Also in doubt is a $90 million engine plant being built at Altona as
part of a $1 billion contract to supply engines to Holden, won by Ion
in October 2002.

Ion makes alloy wheels and parts, transmission assemblies, cylinder
heads, oil pans and other automotive products for major companies
including Ford and Harley-Davidson.

It is also Australia's largest transporter of petroleum products, with
320 tankers distributing oil and gas to retail and commercial outlets,
and a major aviation refueller.

The expected sale yesterday of the group's fuel distribution arm, Ion
Energy Services, was halted by the administration move.

The deal to make 200,000 engine blocks a year for Holden's new V6
alloy motors would have created more than 100 jobs at the Altona plant.

When the deal was struck, Premier Steve Bracks said it would reinforce
Victoria's reputation "as the home of Australia's automotive industry".

A spokeswoman yesterday said the Government was happy to work with
administrators to save workers' jobs and the company because Ion was
important to the state's vehicle manufacturing industry.

The Richmond-based company employs about 3000 people at sites in
Australia, New Zealand and the US with annual revenue of about $700
million.

Just under half the 700 workers at the company's $88 million Albury
transmission plant live

in Victoria. Australian Workers Union secretary Bill Shorten slammed
the company's bankers for withdrawing financial support just months
after providing a $440 million line of credit to Ion.

"What has changed so radically in such a short time? We want to
understand how they, as good corporate citizens, can be accountable
for their short-term decision to interfere with the future of Altona,
South Australia, Auckland and Kentucky," he said.

Mr Shorten called for immediate talks, but said he believed most
workers' jobs and entitlements were secure in the short term.

Construction at the Altona site stopped yesterday after head
contractor John Holland sent workers home at the administrator's request.

Trading in the company's shares was suspended when its directors
placed Ion into voluntary administration as a result of cost overruns
and delays associated with the Altona plant, and projects in South
Australia and Kentucky.

Ion Chairman John Pizzey said the unanimous decision followed the
decision of Ion's bankers to cancel its main lending facility.

"Without the support of its bankers, Ion will not be able to meet its
commitments for the capital expenditure program required to complete
its current growth projects," he said.

Hello Tom

It seems that the Administrators are happy to make up stories about DEWR /
GEERS to suit themselves or cover their own lack of knowledge about the
formal GEERS process and policy.

The Administrators are quick to say DEWR has changed the GEERS arrangements,
yet have never tabled to us specifically what they say has changed, when and
why it affects us.

Recently our class has entered into discussions about amending the Trust
Deed to allow for the reinstatement of our statutory priority. We requested
that before the Administrators do this that they consult GEERS to ascertain
how this should be done in order to satisfy or reasonably expect to satisfy
GEERS. Whether the Administrators have done this or not we are unsure, but
they have since tendered to us an "out" phrase:

"in accordance with its usual practice, it is unable to give any indication
as to whether former employees will be paid by GEERS".

Yet it was the Administrator who had previously confidently represented to
us that in respect of the DOCA and Trust Deed, that he had verbal and
written undertakings that GEERS would pay employee entitlements (only for
DEWR to subsequently advise that it would not be making the payments).

We also wrote to MPs Tony Abbott , Gavin Marshall and Kevin Andrews, early
in the piece and did not receive any really effective responses. We also
wrote to Catherine Whitby of the Complaints unit of ASIC who replied ASIC
were unable to help us as we 'voted for the DOCA and Trust Deed' - ie that
we had accepted the abolition of our priority (as if!) and any resolution
should best be done in court.

Interesting how ASIC see fair justice: it expected a group of redundant
employees to have the funds to take an Administrator to court.

Cheers

Antony


From: tdnorthey <no_reply@...>
Reply-To: otmushrooms@...
Date: Wed, 27 Oct 2004 14:41:31 -0000
To: otmushrooms@...
Subject: [Unpaid Mushrooms] Re: OT Summary; GEERS issues



antony_hing <antony_hing@c...> wrote:
> Thank you very much for the summary.
> I have also had a quick look at 'theissues' page on the web -
> well done and what a top effort!
>
> GEERS
> The Administrator has represented that GEERS have over the last 2
> years implemented a number of policy changes. Is this also your
> understanding of the situation?

Our administrator made a similar claim.  He said "that the GEERS
operational arangements were changed during the OT administration
period" and that "DEWR had admitted in a workshop on GEERS to
Insolvency Practisors that the information on the operation of GEERS
where a DOCA was in place was not clear and could lead to confusion".

We put this to the GEERS NSW Team Leader Mike Moore, and he did not
confirm it - merely said to the best of his knowledge there had not
been a recent GEERS workshop to IPs.

It seems clear that the administrators knew that OT's deed did not
follow the guidelines but they didn't know how flexible GEERS would
be if the guidelines were not followed.  GEERS wanted them to follow
the guidelines and didn't want to tell them how much room they had
to move.

> Have you found anyone at GEERS who really knows the rules and
> policies and is helpful?

No.  We did have a few contacts but they were not really
forthcoming - ultimately the decision to reject our application was
made by then-minister Tony Abbott.

We made several different complaints to ASIC and they investigated
them but did not act.  Abbott suggested we complain to ASIC and even
wrote to the treasurer (who is responsible for ASIC) but ASIC in the
end dropped every complaint.

Abbott clearly stated that "GEERS assistance [would], however, be
made available to the eligible former employees of Open Tel if the
DoCA [was] changed to comply with the requirements set out in the
GEERS OAs".

> THE SWISH DEED
> It's been quite a while since I looked at the Deed and even then
> I had no idea what I was really looking for! I'll have a re-read
> of the Swish Deed for the treatment of Secured creditors and to
> re-examine whether the Deed makes for part-payments to both
> employees and trade creditors and revert to you then.

OT's administrator (Yates) told me that "Swish is notable because
GEERS originally said in a letter that they would pay and then said
that they would not", and that "apart from the letter, Swish is very
similar to OT".

Have you got an electronic copy of the Swish deed?

It is an interesting aside to look at Objectif - they were vaguely
similar company to OT (not as big) that went into VA around the same
time as OT.  The reports to creditors are vastly more detailed and
seem more user-friendly - they are available at
http://www.knights.com.au/reports.htm
For example, they detail each of the offers to buy the business
whether they considered them serious possibilities or not.  OT's
administrator provided no details of the offers to buy parts of OT's
business and didn't provide explanations as to why none of them were
ultimately considered serious.







Reminder: this message is not private.  Anyone (including non-members of
this group) can read this message in the archives.

Useful links:





Yahoo! Groups Links
To visit your group on the web, go to:
http://au.groups.yahoo.com/group/otmushrooms/

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otmushrooms-unsubscribe@...
<mailto:otmushrooms-unsubscribe@...?subject=Unsubscribe>

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[Non-text portions of this message have been removed]

antony_hing <antony_hing@c...> wrote:
> Thank you very much for the summary.
> I have also had a quick look at 'theissues' page on the web -
> well done and what a top effort!
>
> GEERS
> The Administrator has represented that GEERS have over the last 2
> years implemented a number of policy changes. Is this also your
> understanding of the situation?

Our administrator made a similar claim.  He said "that the GEERS
operational arangements were changed during the OT administration
period" and that "DEWR had admitted in a workshop on GEERS to
Insolvency Practisors that the information on the operation of GEERS
where a DOCA was in place was not clear and could lead to confusion".

We put this to the GEERS NSW Team Leader Mike Moore, and he did not
confirm it - merely said to the best of his knowledge there had not
been a recent GEERS workshop to IPs.

It seems clear that the administrators knew that OT's deed did not
follow the guidelines but they didn't know how flexible GEERS would
be if the guidelines were not followed.  GEERS wanted them to follow
the guidelines and didn't want to tell them how much room they had
to move.

> Have you found anyone at GEERS who really knows the rules and
> policies and is helpful?

No.  We did have a few contacts but they were not really
forthcoming - ultimately the decision to reject our application was
made by then-minister Tony Abbott.

We made several different complaints to ASIC and they investigated
them but did not act.  Abbott suggested we complain to ASIC and even
wrote to the treasurer (who is responsible for ASIC) but ASIC in the
end dropped every complaint.

Abbott clearly stated that "GEERS assistance [would], however, be
made available to the eligible former employees of Open Tel if the
DoCA [was] changed to comply with the requirements set out in the
GEERS OAs".

> THE SWISH DEED
> It's been quite a while since I looked at the Deed and even then
> I had no idea what I was really looking for! I'll have a re-read
> of the Swish Deed for the treatment of Secured creditors and to
> re-examine whether the Deed makes for part-payments to both
> employees and trade creditors and revert to you then.

OT's administrator (Yates) told me that "Swish is notable because
GEERS originally said in a letter that they would pay and then said
that they would not", and that "apart from the letter, Swish is very
similar to OT".

Have you got an electronic copy of the Swish deed?

It is an interesting aside to look at Objectif - they were vaguely
similar company to OT (not as big) that went into VA around the same
time as OT.  The reports to creditors are vastly more detailed and
seem more user-friendly - they are available at
http://www.knights.com.au/reports.htm
For example, they detail each of the offers to buy the business
whether they considered them serious possibilities or not.  OT's
administrator provided no details of the offers to buy parts of OT's
business and didn't provide explanations as to why none of them were
ultimately considered serious.

Thank you very much for the summary.
I have also had a quick look at 'theissues' page on the web - well done and
what a top effort!

GEERS
The Administrator has represented that GEERS have over the last 2 years
implemented a number of policy changes. Is this also your understanding of
the situation?
Have you found anyone at GEERS who really knows the rules and policies and
is helpful?

THE SWISH DEED
It's been quite a while since I looked at the Deed and even then I had no
idea what I was really looking for! I'll have a re-read of the Swish Deed
for the treatment of Secured creditors and to re-examine whether the Deed
makes for part-payments to both employees and trade creditors and revert to
you then.

Cheers
Antony







From: tdnorthey <no_reply@...>
Reply-To: otmushrooms@...
Date: Wed, 27 Oct 2004 02:52:02 -0000
To: otmushrooms@...
Subject: [Unpaid Mushrooms] Summary of OT situation.



For the benefit of Antony and any other new members, I'll summarise
the situation with Open Telecommunications (OT) with emphasis on the
effects on redundant staff.

OT went into VA in July 02, owing (in order of statutory priority)
$780k in secured debt secured by fixed charges, approx $3.7M owed in
employee entitlements, $2M in secured debt secured by floating
charges, and approx $5M to unsecured creditors.

Immediately prior to VA, OT was negotiating with Macquarie Bank
(MBL) to sell the largest division of OT, and when the sale fell
through, OT was placed into VA immediately.

Most of the secured debt resulted from issue of convertible notes,
which converted upon VA into shares and secured debt accruing
interest at 11+ %.  The issue of notes was arranged by MBL and
although they were not listed as creditors, the secured creditors
were the OT CEO and the remainder apparently were clients of MBL.

Approx 40% of staff were made redundant by VA.

VAs proposed two choices to creditors - liquidation, and a deed
(recommended by the VA) that would see employees get approx 43%
after approx 12 months and the unsecured creditors get 20% after 2
years.  Secured creditors were not mentioned in the deed.  Naturally
enough, secured creditors were in favour of the deed, as under
liquidation they would get nothing.  Continuing employees also were
in favour of the deed, as under liquidation they would lose their
jobs.  These two groups of creditors dominated in numbers and the
deed was passed at the meeting held in Oct 02.

The report by the VA recommending the deed (and containing the first
details of the deed) was sent by post arriving on a Friday, when the
meeting was held Monday morning.  VA claimed this was legitimate as
the meeting was an adjourned meeting so the notice period only
applied to the original meeting date.

At the meeting, VA was questioned about potential impact of deed on
GEERS, and said if we were worried to vote for liquidation.  However
the VA's report only contained generic disclaimers about GEERS and
at the meeting, the VA did not mention GEERS until questioned.

After approx 12 months, VA and OT proposed a change to the deed to
get OT out of the deed by transferring all the money owed under the
deed ($1.79M, having already paid $790k in Dec 03) to a trust which
paid out in Jan 04 (not sure when unsecured creditors got paid - it
might have been later).  The purpose was purported to be to allow OT
to relist on ASX.

OT raised $11M in a private placement in Dec 03, and they used most
of it to discharge the secured debt and the debt owed under the
deed.  OT is now relisted on the stock exchange.

MBL recently (May 04) has purchased a large parcel of the CEO's
shares and now owns 11.3% of OT.

**Affect of the deed:
Because the deed said that unsecured creditors would receive some
monies while employees were not paid in full, the deed altered the
statutory priorities, meaning GEERS refused to pay (decided about
Jun 03).

A hidden effect of the deed was that secured creditors got a 100%
payout.  Secured creditors had nothing to lose by the deed and
likelihood of 100% to gain.  They would only have got 28% in
liquidation and by deferring payment of that 28%, they earned
interest on the entire debt at 11% and were paid out at 100%, plus
getting shares in an ongoing company.  The 28% was never at risk as
it was fixed secured debt.  If the deed failed, the 28% would go
straight back to the head of the queue.  Worst case for secured
creditors under the deed was the same as liquidation.

If 28% of debt owed to you by OT was secured by assets and you were
guaranteed it if OT's deed failed, would you choose to take 28% now
and lose the rest, or defer payment by a year or two with interest
in order to get 100% payout?  The latter sounds like a good deal to
me.

I would be interested to hear if the same applied to Swish's secured
creditors.

In effect, this treatment of secured creditors also alters statutory
priorities.  It is unclear to me if GEERS regards this as a problem.

**Fees:
The CEO of OT got paid $716,684 over the 2002-03 - which is pretty
good for the boss of a company that has gone into administration,
sacked a whole lot of workers and not paid them a cent for
2 years, blown $6M of employees and unsecured creditors funds, plus
diluted shareholders by 90+%.

Where did the $6M of employees and secured creditors funds go?
Secured creditors (including CEO): extra $2M + interest
Deloittes (VA): estimated $1M+
Lawyers: estimated $1M+
Underwriter for placement: $1M+

** Superannuation
We have been "paid" our super (or 43% of it), which means the VA has
given it to the ATO and the ATO has sat on it since Jan 04!  ATO
have a huge backlog of SGC payments to go through - in July it
affected 2% of the workforce!

**Conclusions

Companies should not be able to choose their own VA.  Because the VA
is paid by the company, the VA has a conflict of interest.  VAs are
able to make decisions which directly increase their fees.  Also
favourable treatment of the company by the VA will affect sentiment
of other partially solvent companies toward that VA and hence
affects future fee income.

Deeds should be required to cover all classes of creditors
explicitly.

The GEERS scheme should be altered to remove the conflict it has
between affecting votes of claimants at creditors meetings and
allowing claimants to be ill-informed with regard to requirements of
GEERS.

It should be a crime for administrators to not clearly inform each
class of creditors of the potential financial outcome of decisions
upon them, even if the outcome is indirectly caused (as in the case
of rejected GEERS claims).

VA fees should be capped (including legal and investment bank fees).

Perhaps two or more VAs should be appointed initially to compete for
the creditors' business.

I hesitate to suggest that the priority of employees entitlements be
inviolable but if they can't make GEERS work any other way, then
that's the way it's got to be.

ASIC should be more active in enforcing the law in relation to
administration.






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this group) can read this message in the archives.

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To visit your group on the web, go to:
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[Non-text portions of this message have been removed]

--- In otmushrooms@..., a switched on antony_hing wrote:
> Hi Steve
>
> The trouble is the average employee knows very little about the
machinations
> of the laws around insolvency. The insolvency industry knows this
and too
> often exploits it to there own ends, rather than for the benefits of the
> Creditors.

Yes, this is a very central issue, also applicable to contractors,
small business, and other trade creditors.

I highly recommend you go to the group's home page (web link below)
and select the Issues for Creditors and Employees link (direct link
http://shorterlink.com/?PIV1NF which redirects to
http://au.geocities.com/nick4mony/otm/theissues.htm )

I've summarised this, and other issues there, but I'd be very
interested to know if you see additional issues.

There is a Version 2 in progress, which will give hints on how
creditors can increase their chances of a better deal.

Nick Bishop
-----
Error: Water detected in drive A:
-oOo-

--- tdnorthey wrote:
>
> Secured creditors were not mentioned in the deed.  Naturally
> enough, secured creditors were in favour of the deed, as under
> liquidation they would get nothing.

...

> They would only have got 28% in
> liquidation and by deferring payment of that 28%, they earned
> interest on the entire debt at 11% and were paid out at 100%

Clarification: The 28% was their FIXED charge (charge over fixed
assets) and they would have got that in a liquidation.  They would not
have seen a cent from their FLOATING charge, because the funds would
have been fully used up by employee claims, which come after FIXED but
before FLOATING.



> to a trust which
> paid out in Jan 04 (not sure when unsecured creditors got paid - it
> might have been later).

In theory, the Unsecureds (trade creditors) were paid out at the same
time.


Nick.
-----
Actions speak louder than words. Screaming is an action.
-oOo-

... Hmmm.  Ignore that last empty reply message of mine. A "run-away"
browser, if you will.  Maybe a Deloitte I.T. person got in somewhere ???

--- GERLACH, Steven wrote:
> Antony,
>
> Sounds exactly like what Deloitte did to us! Burn through the money
and then
> say there's nothing left!

... of course that was a comment provided "for amusement purposes
only".  Tom's (tdnorthey) message was a good timeline of what happened
with OT and Deloitte.

Things started off normally, in OT's case.  The Creditor's Trust
business was only invented to speed up the listing to the Shock
Exchange, and did not alter the amount of money available to the
creditors, and did not (directly) affect the timing, either
[indirectly: enabled the investment to proceed, and for us to be paid
out early].

It did, however, terminate the rights we had under Corporations Law
and the Deed of Company Arrangement - our rights terminated when the
Deed was terminated early.

I agree that OT and Swish are similar in one respect: the two
procedures were Phoenix Company activity in disguise.

*****

Steve is a bit of a comedian, we keep him around because you have to
have a laugh once in a while. As he said:
You gotta laugh ... or else you'd cry.

*****

Empty reply and empty envelopes: It was a while back, but at one
stage, Deloitte sent a whole bunch of empty envelopes to a proportion
of O.T. creditors. Ever since then this list has bristled with empty
envelope comments.

A headline in today's (Wednesday) Age: Stupidity and cynicism rule
Australia, OK!

Yes, there is a lot of stupidity in Australia.

Nick Bishop, grad.com @ nick4mony
-----
"I'm not going to lecture about how you should live your life, I'll
just give you the facts.  Dealing with inactivity costs the Australian
Taxpayer $2.5 billion PER FREEWAY".
-oOo-

For the benefit of Antony and any other new members, I'll summarise
the situation with Open Telecommunications (OT) with emphasis on the
effects on redundant staff.

OT went into VA in July 02, owing (in order of statutory priority)
$780k in secured debt secured by fixed charges, approx $3.7M owed in
employee entitlements, $2M in secured debt secured by floating
charges, and approx $5M to unsecured creditors.

Immediately prior to VA, OT was negotiating with Macquarie Bank
(MBL) to sell the largest division of OT, and when the sale fell
through, OT was placed into VA immediately.

Most of the secured debt resulted from issue of convertible notes,
which converted upon VA into shares and secured debt accruing
interest at 11+ %.  The issue of notes was arranged by MBL and
although they were not listed as creditors, the secured creditors
were the OT CEO and the remainder apparently were clients of MBL.

Approx 40% of staff were made redundant by VA.

VAs proposed two choices to creditors - liquidation, and a deed
(recommended by the VA) that would see employees get approx 43%
after approx 12 months and the unsecured creditors get 20% after 2
years.  Secured creditors were not mentioned in the deed.  Naturally
enough, secured creditors were in favour of the deed, as under
liquidation they would get nothing.  Continuing employees also were
in favour of the deed, as under liquidation they would lose their
jobs.  These two groups of creditors dominated in numbers and the
deed was passed at the meeting held in Oct 02.

The report by the VA recommending the deed (and containing the first
details of the deed) was sent by post arriving on a Friday, when the
meeting was held Monday morning.  VA claimed this was legitimate as
the meeting was an adjourned meeting so the notice period only
applied to the original meeting date.

At the meeting, VA was questioned about potential impact of deed on
GEERS, and said if we were worried to vote for liquidation.  However
the VA's report only contained generic disclaimers about GEERS and
at the meeting, the VA did not mention GEERS until questioned.

After approx 12 months, VA and OT proposed a change to the deed to
get OT out of the deed by transferring all the money owed under the
deed ($1.79M, having already paid $790k in Dec 03) to a trust which
paid out in Jan 04 (not sure when unsecured creditors got paid - it
might have been later).  The purpose was purported to be to allow OT
to relist on ASX.

OT raised $11M in a private placement in Dec 03, and they used most
of it to discharge the secured debt and the debt owed under the
deed.  OT is now relisted on the stock exchange.

MBL recently (May 04) has purchased a large parcel of the CEO's
shares and now owns 11.3% of OT.

**Affect of the deed:
Because the deed said that unsecured creditors would receive some
monies while employees were not paid in full, the deed altered the
statutory priorities, meaning GEERS refused to pay (decided about
Jun 03).

A hidden effect of the deed was that secured creditors got a 100%
payout.  Secured creditors had nothing to lose by the deed and
likelihood of 100% to gain.  They would only have got 28% in
liquidation and by deferring payment of that 28%, they earned
interest on the entire debt at 11% and were paid out at 100%, plus
getting shares in an ongoing company.  The 28% was never at risk as
it was fixed secured debt.  If the deed failed, the 28% would go
straight back to the head of the queue.  Worst case for secured
creditors under the deed was the same as liquidation.

If 28% of debt owed to you by OT was secured by assets and you were
guaranteed it if OT's deed failed, would you choose to take 28% now
and lose the rest, or defer payment by a year or two with interest
in order to get 100% payout?  The latter sounds like a good deal to
me.

I would be interested to hear if the same applied to Swish's secured
creditors.

In effect, this treatment of secured creditors also alters statutory
priorities.  It is unclear to me if GEERS regards this as a problem.

**Fees:
The CEO of OT got paid $716,684 over the 2002-03 - which is pretty
good for the boss of a company that has gone into administration,
sacked a whole lot of workers and not paid them a cent for
2 years, blown $6M of employees and unsecured creditors funds, plus
diluted shareholders by 90+%.

Where did the $6M of employees and secured creditors funds go?
Secured creditors (including CEO): extra $2M + interest
Deloittes (VA): estimated $1M+
Lawyers: estimated $1M+
Underwriter for placement: $1M+

** Superannuation
We have been "paid" our super (or 43% of it), which means the VA has
given it to the ATO and the ATO has sat on it since Jan 04!  ATO
have a huge backlog of SGC payments to go through - in July it
affected 2% of the workforce!

**Conclusions

Companies should not be able to choose their own VA.  Because the VA
is paid by the company, the VA has a conflict of interest.  VAs are
able to make decisions which directly increase their fees.  Also
favourable treatment of the company by the VA will affect sentiment
of other partially solvent companies toward that VA and hence
affects future fee income.

Deeds should be required to cover all classes of creditors
explicitly.

The GEERS scheme should be altered to remove the conflict it has
between affecting votes of claimants at creditors meetings and
allowing claimants to be ill-informed with regard to requirements of
GEERS.

It should be a crime for administrators to not clearly inform each
class of creditors of the potential financial outcome of decisions
upon them, even if the outcome is indirectly caused (as in the case
of rejected GEERS claims).

VA fees should be capped (including legal and investment bank fees).

Perhaps two or more VAs should be appointed initially to compete for
the creditors' business.

I hesitate to suggest that the priority of employees entitlements be
inviolable but if they can't make GEERS work any other way, then
that's the way it's got to be.

ASIC should be more active in enforcing the law in relation to
administration.

Hi Steve

The trouble is the average employee knows very little about the machinations
of the laws around insolvency. The insolvency industry knows this and too
often exploits it to there own ends, rather than for the benefits of the
Creditors.

In our case, we had our statutory priority as employees, removed without
even being told ie we ranked no higher than unsecured creditors. Seeing
through this, I believe this was a grab by the Administrator to maximise the
pool of funds against which they could charge fees and disbursements.

We found out almost too late that you need an independent expert (such as
Ken) to manage the Administrator/Liquidator/Receiver to ensure they act
appropriately.

Cheers
Antony


From: "GERLACH, Steven" <steven.gerlach@...>
Reply-To: otmushrooms@...
Date: Wed, 27 Oct 2004 09:38:40 +1000
To: "'otmushrooms@...'" <otmushrooms@...>
Subject: RE: [Unpaid Mushrooms] Re: fighting an incompetent and negligent
VA


Antony,

Sounds exactly like what Deloitte did to us! Burn through the money and then
say there's nothing left!

Steve


> -----Original Message-----
> From: antonyhing [mailto:antony_hing@...]
> Sent: Wednesday, 27 October 2004 9:31 AM
> To: otmushrooms@...
> Subject: [Unpaid Mushrooms] Re: fighting an incompetent and negligent VA
>
>
>
> Hello Nick
>
> I am sure that others in our group would be interested in joining. Mind
> you our affairs have been
> going on for 2 years, so energy levels have waxed hi and lo over this time
> - I am sure you know
> what I am talking about! Only now are we starting to get some finalisation
> - and only because we
> have persisted and persisted.
>
> We have also been particularly fortunate to have appointed Ken Stout of
> Boutique Corporate
> Advisory to our cause. He is a one of the most talented of the insolvency
> practitioners in
> Melbourne as this has been his sole area of specialisation for the last 15
> years (he was a former
> partner of Ernst &Young). Ken's work on FNT Industries helped expose
> Lockwood's
> incompetence which eventually saw Lockwood struck off an insolvency
> practitioner.
>
> My area of specific interest is reclaiming super.
>
> The mechanism that Lockwood tried to effectuate was to essentially hive
> all the former debts of
> Swish into a Trust. This was intended, I believe, to quarantine the new
> Swish (which is a going
> concern) from the former debts. It was also intended that the pool of
> assets associated with this
> Trust would form the entirety of the means by which the
> Admininstrators/Trustees' fees would
> be paid and then of course all other creditors in rank of priority.
>
> A major issue has been the excessive level of fees charged by the
> Administrators, Horwaths
> (and their high level of disbursements for such things as legal advice
> from Deacons), while the
> value of the assets plummeted. As an example at the time of the
> Administration, there was
> c$250K in cash and 6Million shares @ 6c = c$360K. The Administrators have
> burned through
> the $250K cash and stood idly by while the shares have lost 66% in value
> down to 2c (they
> could have sold them at much higher prices). This is the same pool from
> which our super is
> supposed to be paid from.
>
> We argue as Administrators, they owe a special duty of care and that this
> is simply reckless and
> negligent conduct on their part. We see fee disgorgement as a valid
> request.
>
> I'm interested to hear your thoughts.
>
> Cheers
>
> Antony
>
>
> ---
>
>
> In otmushrooms@..., nick4mony <no_reply@y...> wrote:
> >
> > --- "antonyhing" wrote:
> >
> > > I'm a former employee of a Melbourne e-Business company called Swish
> >
> > In our deliberations some 10 months ago, we did actually talk about
> > your company - being another that had a Deed similar to yours.
> >
> > It is good that we have someone from the Swish group here.  Are you
> > able to get more of your people to join?
> >
> > Nick.
>
>
>
>
>
> Reminder: this message is not private.  Anyone (including non-members of
> this group) can read this message in the archives.
>
> Useful links:
> Yahoo! Groups Links
>
>
>
>
>



Reminder: this message is not private.  Anyone (including non-members of
this group) can read this message in the archives.

Useful links:





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[Non-text portions of this message have been removed]

Antony,

Sounds exactly like what Deloitte did to us! Burn through the money and then
say there's nothing left!

Steve


> -----Original Message-----
> From: antonyhing [mailto:antony_hing@...]
> Sent: Wednesday, 27 October 2004 9:31 AM
> To: otmushrooms@...
> Subject: [Unpaid Mushrooms] Re: fighting an incompetent and negligent VA
>
>
>
> Hello Nick
>
> I am sure that others in our group would be interested in joining. Mind
> you our affairs have been
> going on for 2 years, so energy levels have waxed hi and lo over this time
> - I am sure you know
> what I am talking about! Only now are we starting to get some finalisation
> - and only because we
> have persisted and persisted.
>
> We have also been particularly fortunate to have appointed Ken Stout of
> Boutique Corporate
> Advisory to our cause. He is a one of the most talented of the insolvency
> practitioners in
> Melbourne as this has been his sole area of specialisation for the last 15
> years (he was a former
> partner of Ernst &Young). Ken's work on FNT Industries helped expose
> Lockwood's
> incompetence which eventually saw Lockwood struck off an insolvency
> practitioner.
>
> My area of specific interest is reclaiming super.
>
> The mechanism that Lockwood tried to effectuate was to essentially hive
> all the former debts of
> Swish into a Trust. This was intended, I believe, to quarantine the new
> Swish (which is a going
> concern) from the former debts. It was also intended that the pool of
> assets associated with this
> Trust would form the entirety of the means by which the
> Admininstrators/Trustees' fees would
> be paid and then of course all other creditors in rank of priority.
>
> A major issue has been the excessive level of fees charged by the
> Administrators, Horwaths
> (and their high level of disbursements for such things as legal advice
> from Deacons), while the
> value of the assets plummeted. As an example at the time of the
> Administration, there was
> c$250K in cash and 6Million shares @ 6c = c$360K. The Administrators have
> burned through
> the $250K cash and stood idly by while the shares have lost 66% in value
> down to 2c (they
> could have sold them at much higher prices). This is the same pool from
> which our super is
> supposed to be paid from.
>
> We argue as Administrators, they owe a special duty of care and that this
> is simply reckless and
> negligent conduct on their part. We see fee disgorgement as a valid
> request.
>
> I'm interested to hear your thoughts.
>
> Cheers
>
> Antony
>
>
> ---
>
>
> In otmushrooms@..., nick4mony <no_reply@y...> wrote:
> >
> > --- "antonyhing" wrote:
> >
> > > I'm a former employee of a Melbourne e-Business company called Swish
> >
> > In our deliberations some 10 months ago, we did actually talk about
> > your company - being another that had a Deed similar to yours.
> >
> > It is good that we have someone from the Swish group here.  Are you
> > able to get more of your people to join?
> >
> > Nick.
>
>
>
>
>
> Reminder: this message is not private.  Anyone (including non-members of
> this group) can read this message in the archives.
>
> Useful links:
> Yahoo! Groups Links
>
>
>
>
>

Hello Nick

I am sure that others in our group would be interested in joining. Mind you our
affairs have been
going on for 2 years, so energy levels have waxed hi and lo over this time - I
am sure you know
what I am talking about! Only now are we starting to get some finalisation - and
only because we
have persisted and persisted.

We have also been particularly fortunate to have appointed Ken Stout of Boutique
Corporate
Advisory to our cause. He is a one of the most talented of the insolvency
practitioners in
Melbourne as this has been his sole area of specialisation for the last 15 years
(he was a former
partner of Ernst &Young). Ken's work on FNT Industries helped expose Lockwood's
incompetence which eventually saw Lockwood struck off an insolvency
practitioner.

My area of specific interest is reclaiming super.

The mechanism that Lockwood tried to effectuate was to essentially hive all the
former debts of
Swish into a Trust. This was intended, I believe, to quarantine the new Swish
(which is a going
concern) from the former debts. It was also intended that the pool of assets
associated with this
Trust would form the entirety of the means by which the
Admininstrators/Trustees' fees would
be paid and then of course all other creditors in rank of priority.

A major issue has been the excessive level of fees charged by the
Administrators, Horwaths
(and their high level of disbursements for such things as legal advice from
Deacons), while the
value of the assets plummeted. As an example at the time of the Administration,
there was
c$250K in cash and 6Million shares @ 6c = c$360K. The Administrators have burned
through
the $250K cash and stood idly by while the shares have lost 66% in value down to
2c (they
could have sold them at much higher prices). This is the same pool from which
our super is
supposed to be paid from.

We argue as Administrators, they owe a special duty of care and that this is
simply reckless and
negligent conduct on their part. We see fee disgorgement as a valid request.

I'm interested to hear your thoughts.

Cheers

Antony


---


In otmushrooms@..., nick4mony <no_reply@y...> wrote:
>
> --- "antonyhing" wrote:
>
> > I'm a former employee of a Melbourne e-Business company called Swish
>
> In our deliberations some 10 months ago, we did actually talk about
> your company - being another that had a Deed similar to yours.
>
> It is good that we have someone from the Swish group here.  Are you
> able to get more of your people to join?
>
> Nick.

Hello Nick

I am sure that others in our group would be interested in joining. Mind you our
affairs have been
going on for 2 years, so energy levels have waxed hi and lo over this time - I
am sure you know
what I am talking about! Only now are we starting to get some finalisation - and
only because we
have persisted and persisted.

We have also been particularly fortunate to have appointed Ken Stout of Boutique
Corporate
Advisory to our cause. He is a one of the most talented of the insolvency
practitioners in
Melbourne as this has been his sole area of specialisation for the last 15 years
(he was a former
partner of Ernst &Young). Ken's work on FNT Industries helped expose Lockwood's
incompetence which eventually saw Lockwood struck off an insolvency
practitioner.

My area of specific interest is reclaiming super.

The mechanism that Lockwood tried to effectuate was to essentially hive all the
former debts of
Swish into a Trust. This was intended, I believe, to quarantine the new Swish
(which is a going
concern) from the former debts. It was also intended that the pool of assets
associated with this
Trust would form the entirety of the means by which the
Admininstrators/Trustees' fees would
be paid and then of course all other creditors in rank of priority.

A major issue has been the excessive level of fees charged by the
Administrators, Horwaths
(and their high level of disbursements for such things as legal advice from
Deacons), while the
value of the assets plummeted. As an example at the time of the Administration,
there was
c$250K in cash and 6Million shares @ 6c = c$360K. The Administrators have burned
through
the $250K cash and stood idly by while the shares have lost 66% in value down to
2c (they
could have sold them at much higher prices). This is the same pool from which
our super is
supposed to be paid from.

We argue as Administrators, they owe a special duty of care and that this is
simply reckless and
negligent conduct on their part. We see fee disgorgement as a valid request.

I'm interested to hear your thoughts.

Cheers

Antony


---


In otmushrooms@..., nick4mony <no_reply@y...> wrote:
>
> --- "antonyhing" wrote:
>
> > I'm a former employee of a Melbourne e-Business company called Swish
>
> In our deliberations some 10 months ago, we did actually talk about
> your company - being another that had a Deed similar to yours.
>
> It is good that we have someone from the Swish group here.  Are you
> able to get more of your people to join?
>
> Nick.

--- "antonyhing" wrote:

> I'm a former employee of a Melbourne e-Business company called Swish

In our deliberations some 10 months ago, we did actually talk about
your company - being another that had a Deed similar to yours.

It is good that we have someone from the Swish group here.  Are you
able to get more of your people to join?

Nick.

Hello Nick and everyone

I'm a new member to this group, who read your article in the Oct 21 BRW.

I'm a former employee of a Melbourne e-Business company called Swish that
entered into VA
in late 2002 with about 45 employees being made redundant or sacked.

The VA, initially David Lockwood and Mathew Muldoon of Sims Lockwood (now part
of
Horwaths), decided in their infinite wisdom (without informing us or giving
proper notice) to
remove our employees' statutory priority. Consequently GEERS were unable to be
subrogated into our position and therefore refused to pay the entitlements under
the GEERS
Scheme.

We allege that the VA has been negligent and have subsequently formed a class to
continue to
pursue our claims against Horwaths and their legal advisors Deacons.

I look forward to familiarising myself with the group and no doubt will have
many questions to
ask.

Cheers

Antony Hing

Snapshots
News from the industry.
BRW. 21 October 2004

Going for broke

Voluntary administrations are on the rise, but fewer companies are
entering arrangements with creditors to continue trading. This is
because directors have realised they are not protected from legal
action by the Australian Securities & Investments Commission, says
the chief executive of Insolvency Notices, Paul Fordyce. Voluntary
administrations in the September quarter were up 14% year on year,
to 884, but deeds of company arrangement were down 17% nationally to
161.

Fordyce says the Victorian Supreme Court's finding against John
Elliott in the Water Wheel case in May last year is largely
responsible for directors opting for liquidation rather than a deed
of arrangement.

Elliott was ordered to pay a share of $1.4 million, with Water
Wheel's other directors, for breaching the Corporations Act by
allowing the company to trade while it was insolvent. Fordyce
says: "The result of the Water Wheel case is that [directors] may do
a deed of company arrangement but that may not clear their liability
as a director."

Fordyce also believes that the fall in deeds of arrangement is due
to increasing cynicism about them by creditors. "They are getting a
little less willing to accept them. There may be a feeling that
directors are getting off too easily and that the creditors would
prefer to have a liquidation and an investigation into the affairs
of the company."

Also in the September quarter, receiverships were up 74% year on
year, to 141, and appointed controllers were up 49%, to 67. Fordyce
says this is a strong sign that Australia's economy is buoyant.

He says: "Secured creditors will often support or nurture a customer
who is in difficulty because if the economy is bad, and you put in a
receiver and try to sell the business, there are not going to be
many buyers for it and then you crystallise your loss at a much
greater loss."

- Bruce Andrews

This is from the same URL as the previous story
http://www.brw.com.au/fearticle.aspx?docId=28738