Court hears Ten administrator didn’t tell full CBS story

TEN Network’s administrators KordaMentha failed to tell the broadcaster’s creditors that a takeover by US media giant CBS did not treat all of them equally, and could face a legal challenge, a court has heard.

On the second day of a hearing at the NSW Supreme Court about the future of the free-to-air network, lawyers for a rival bid from Ten investor Bruce Gordon argued that the CBS offer included “unexplained and inexplicable discriminatory treatment”, carrying a high potential for litigation.

Mr Gordon and News Corp co-chairman Lachlan Murdoch tabled a joint bid for Ten, but KordaMentha backed a rival bid from CBS.

Andrew Bell, SC, representing Mr Gordon’s companies, told Justice Ashley Black a joint bid from Mr Gordon and Mr Murdoch proposed a structure in which creditors “are all treated equally”.

“Why would creditors give a tick to something that’s going to get attacked when two reputable people put forward an offer with comparatively less risk?” Dr Bell said.

He said there was no urgency for Ten creditors to sign off on a recommendation to sell the company to CBS, and accused KordaMentha of keeping creditors “in the dark”.

Dr Bell told the court the administrators had painted a false picture that had the effect of “misleading” creditors.

Contrary to statements made by KordaMentha, creditors had sufficient time to consider an alternative proposal by Mr Gordon and Mr Murdoch because the Deed of Company Arrangement with CBS does not expire until December 15.

The Gordon-Murdoch offer for Ten had “far less transaction risk” than the CBS offer, as Justice Black dismissed a sought amendment for the proposal to be put to Ten creditors at a planned meeting on September 19.

Mr Gordon’s legal team abandoned the move because “the price to be paid” was an adjournment of the current hearing, which is now expected to last three days instead of two.

Richard McHugh, SC, representing KordaMentha, said “the reality is that somebody else put in a better bid” in relation to the CBS transaction for Ten Network.