This is a posting from the ANZ forum,Ifind it intrigueing as I see a pattern where the ANZ comes in rough shod over everybody,and basically says we come first,and the investor a long way 2nd.So I see it refreshing that a few are prpared to have a dip at the the bank.
ANZ faces $285m fight over collapse MARK HAWTHORNE April 12, 2010 ANZ faces two lawsuits totalling $285 million over its role in the collapse of stock lending company Primebroker Securities. The legal action could lead to several prominent Melbourne business identities taking the witness stand, including ANZ chief executive Mike Smith.
The lawsuits concern the final months of Primebroker, a boutique stock lending company that boasted an elite list of wealthy clients until ANZ called in the receivers in July 2008.
According to sworn witness statements, those clients included Belgravia Group, the investment company operated by Melbourne Victory chairman Geoff Lord, and Yellowrock, which is operated by Melbourne property developer Garry Reichert.
BDO, the liquidator of Primebroker, will lodge a statement of claim with the Federal Court as soon as this week. That claim is for the receivership of Primebroker to be set aside, and for $86.2 million Primebroker repaid to ANZ in the six months before it collapsed to be returned.
Laurie Fitzgerald, of BDO, confirmed that legal action against ANZ would begin soon.
''Our review of the facts indicates that ANZ sought to advance their priority as against other creditors through the charge that they took,'' Mr Fitzgerald said. ''They have subsequently received substantial preferential payments and significant commercial advantages at the expense of the unsecured creditors.''
A second $200 million claim funded by Chimaera Capital, which controlled Primebroker, and a number of former clients is expected to follow the initial lawsuit.
Central to that claim is the allegation ANZ failed to clear share trades on behalf of Primebroker in three working days, as required by the Australian Securities Exchange. That alleged inaction, coupled with market rumours the company was insolvent, led to a ''run'' on Primebroker by stockbroking firms.
ANZ spokesman Paul Edwards said the bank was aware of the accusations being made by Primebroker and its liquidator.
''There have been threats of legal action by the Primebroker liquidator and the Primebroker principals for many months now,'' Mr Edwards said.
''This is nothing new and in the event any actions materialise, ANZ will defend them appropriately. The matters associated with securities lending including the Primebroker receivership are now two years old and ANZ is completely covered in terms of the provisions that are necessary in relation to those matters.''
As part of the second lawsuit, ANZ's chief executive is expected to be quizzed about personal assurances he is alleged to have given Chimaera principal Sal Catalano, while other ANZ executives will be asked about assurances given to Primebroker clients before the bank called in the receivers.
Mr Catalano told The Age that representations made by senior ANZ staff - that ANZ would not withdraw from the stock lending business and would support Primebroker - were central to its claim.
''We are working with the liquidator to finalise a broader action against the ANZ which will seek to address the conduct and representations made by the bank during January to June 2008,'' he said.
''We have personally funded the development of the legal actions to this point. Going forward, we have established a litigation fund to finance the actions.''
That fund is called Special Situations LFF and includes a number of other ''investors'' and former Primebroker clients.
The legal battle could lead to current and former ANZ executives and leading business figures taking the stand. These include former ANZ chief of institutional banking Peter Hodgson, who departed the bank after an internal review of ANZ's disastrous forays into the securities lending business.
Former St Kilda Football Club president Rod Butterss, who made a last-minute offer to help recapitalise Primebroker, is another business figure named in witness statements who may be asked to provide a statement.
A due diligence report on Primebroker, compiled for ANZ by corporate advisers KordaMentha in 2008, will also form part of the evidence provided by the liquidator of Primebroker.
Mark Mentha is expected to be quizzed on statements he allegedly made regarding that report, including telling Chimaera's directors that the reason for the report was to confirm ''there were no dead bodies and no Maseratis'' - a reference to the woes at margin lending rival Opes Prime.
According to the witness statement of Mr Catalano, Mr Mentha told him: ''Don't worry, as [ANZ] won't let a bank subsidiary go down.''
Source: The Age
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