FORMER representative rugby league player Benny Elias has lost his bid to keep his mining company out of receivership.
A court has ruled that Chameleon Mining breached several aspects of its arrangement with its own litigation funder, which appointed receivers to the miner last month.
The Singapore-based International Litigation Partners had been funding Chameleon's Federal Court battle with Murchison Metals - which is yet to be decided.
Chameleon paid ILP the $6 million it received when it settled with other parties in that case late last year. It is now expected to be made to pay at least $3 million more. Chameleon and its funding firm fell out in July, after ILP held settlement talks with Murchison. Chameleon felt the amount being offered was inadequate.
Soon afterwards, Chameleon struck a deal with Cape Lambert Resources for a ''strategic partnership'' that gave Cape Lambert control of half the Chameleon board and a fixed and floating charge over its assets.
Under Chameleon's agreement with ILP, the funder held a charge over the assets. The new deal also meant Cape Lambert would give Chameleon $6.5 million to discharge ILP. Chameleon refused to pay ILP the agreed termination fee of the higher of $9 million, or 20 per cent of the Chameleon share capital, arguing ILP could not enforce it because it did not hold an Australian financial services licence. ILP had argued that, as well as the termination fee, it should still be entitled to a share of any settlement reached with Murchison.
New South Wales Supreme Court judge David Hammerschlag ruled yesterday that ILP should get the termination fee but not a share of any spoils from the Murchison case. He said the funder's decision and power to appoint receivers over Chameleon was valid and he would hear further arguments on costs and the future of the proceedings. Source: The Age
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