Westpac, Other Banks Settle Dispute With Bell LiquidatorsJoe Schneider
Westpac Banking Corp. and a group of other lenders agreed to settle a dispute with the liquidators of the Bell Group over about A$265 million ($247 million) in loans that they recovered after its 1991 collapse.
Liquidators won a A$1.66 billion award including compound interest in 2009, and as part of the settlement, details of which aren’t being disclosed, a final appeal by the banks will be dropped, according to a joint statement today.
The consortium of 20 banks including National Australia Bank Ltd., Standard Chartered Plc and Commonwealth Bank of Australia, took security over assets of the Bell Group in 1990, a year before the company filed for bankruptcy. The liquidators sued in 1995 claiming the banks assisted the directors to breach their duties by agreeing to put up the security while knowing the company was insolvent.
The case has been one of the longest-running and most expensive in the country’s history, the West Australian newspaper reported. Three former Federal Court judges were assigned the appeal case because all other judges in the state had been involved in the litigation, the newspaper said.
“Settling now is a pragmatic decision which will save further time and costs for all parties,” John Vaughan, a lawyer and spokesman for the banks at Herbert Smith Freehills, said in today’s statement.
Bell Group was the company of Alan Bond, who had financed Australia’s successful bid for the 1983 America’s Cup yachting race.
In 1987, he purchased the Channel Nine television network from Australian billionaire Kerry Packer for A$1 billion. Bond declared bankruptcy in 1992, with personal debts of A$1.8 billion. Packer bought back the television channel for A$250 million.
The case is Westpac Banking Corp. v The Bell Group Ltd. 2012-WASCA 157. Supreme Court of Western Australia - Court of Appeal (Perth).