REMEMBER WHEN

GOLD COAST BULLETIN Saturday, September 13, 2008

EMBATTLED Gold Coast company Octaviar showed the resilience of a cat after a court ruled that it be placed in the hands of administrators.

The move delivered a slap in the face for the Public Trustee of Queensland which had sought an immediate liquidation of the company, which has debts of $1 billion to unsecured creditors.

But the PTQ, acting on behalf of 560 noteholders owed about $350 million, had a win of sorts, with Queensland Supreme Court justice Philip McMurdo leaving in place an injunction that prevented Octaviar – formerly known as MFS – from calling in administrators.

The PTQ called for a stay in order to talk to a number of larger overseas noteholders it was representing. It had until midday that day to inform Justice McMurdo whether it would appeal his decision.

But if it abandoned its liquidation bid, Octaviar director and shareholder Chris Scott said administrators would be appointed by the board.

An administration would have effectively put on hold a possible liquidation of Octaviar for at least six weeks, during which it would need to secure a deed of arrangement with its creditors.

A payout offer of about 22.5c in the dollar already on the table would be withdrawn once an administrator was appointed.

Most creditors had already indicated they would accept the payout offer, which appealed to smaller investors owed $5000 or less as they would be paid in full.

Ultimately Octaviar was wound up in the wake of the financial crisis which went into overdrive just days later after the failure of Lehman Brothers began a major credit crunch.