never a dull moment

ReelTime slips from Albion's gripThis report is from today's Australian:



Andrew Colley | September 04, 2008

THE NSW Supreme Court has placed ReelTime Media back into the hands of administrators following a legal challenge by one of the company's major investors.

NSW Supreme Court Justice George Palmer has ordered that a deed of company arrangement (DOCA) between ReelTime Media’s administrator Ferrier-Hodgson and creditors that saw the shell passed into the hands of Albion Capital Partners late May be terminated.

The court issued the orders Monday after upholding Maylord Equities' claim to be recognised as the internet movie start-up's major creditor.

Maylord has been battling to administrators to be recognised as the company's major creditor since February when ReelTime Media and its subsidiary, ReelTime Infotainment, were placed in voluntary administration.

The order recognises Maylord’s majority voting rights over the disposal of ReelTime Media as the company's largest creditor. Before the orders were handed down, Ferrier-Hodgson had only apportioned Maylord voting rights proportionate to a $10,000 debt. Its new voting rights would allow it to appoint new administrators.

Maylord managing director Peter Batterham said the company would consider taking further legal action against ReelTime Media after Justice Palmer hands down his full judgement on the case.

"We will wait for the full judgement to be handed down to consider our legal options which may well include putting the matter before ASIC (the Australian Securities and Investment Commission)," Mr Batterham said.

Maylord’s solicitor Paul OShanassy said the decision was an unequivocal win which would send a clear message that the courts won’t tolerate “sloppy” administration practices. He said that decision would allow ReelTime’s affairs to be investigated thoroughly.


Maylord took out a $1 million convertible note in the company late 2007. It later converted the note into shares.

In March, prior to the proceedings, Maylord's solicitors wrote to ReelTime Media alleging that the company made false and misleading and deceptive representations on the company's financial position before it agreed to convert its notes to equity.

Ferrier Hodgson said it would investigate the claim in March.

At the time, Alistair MacKinlay and John Karantzis, who were ReelTime directors during the period to which the allegations relate, said that they were confident the administrators would put the claim aside.

Mr MacKinlay said that Mr Batterham went into the deal with his eyes open.

Mr Karantzis said: "They voluntarily converted, the Cornell funding was already in place and the thing that Maylord seemed to be conveniently forgetting is that the public company never really had that many debts ... they were all sitting in the subsidiary (ReelTime Infotainment)."

ReelTime Infotainment was dissolved under a separate DOCA which saw its assets, including its internet movie deliver network, built at a cost of around $5 million and sold to EzyDVD for around $150,000.

EzyDVD chief executive Jim Zavos joined ReelTime Media's board last September as part of a joint-venture marketing deal, but announced his resignation days before it entered voluntary administration.

Another former director of the company, Andrew Wilshire, who joined the board after Mr Karantzis left in Decmeber has since turned up in the management ranks at EzyDVD as head of its emerging online movie division, EzyDownload.

ReelTime entered an agreement with EzyDVD last September that saw Mr Zavos take a seat on ReelTime's board. EzyDVD was also expected to take a share position in the company. However, the deal collapsed early this year and Mr Zavos resigned from ReelTime's board.