Allco creditors' vote thwarts NAB

This means the 14 companies, which were often co-investors with Allco Finance in its unlisted funds, will try to trade their way out of their problems, including conducting an orderly assets sale.

Allco Principals Investments directors appointed a voluntary administrator to the private vehicles in March after Allco Principals was hit with a margin call on a loan it held over Allco Finance shares. This cascaded down to several smaller shelf companies that had financing agreements with Allco Principals.

Minutes of the creditors' meeting show $854 million has been claimed against Allco Principals and 13 other companies, including Allco HIT Holdings, Allco Principals Property and Allco Principals Rail, which were placed under administration.

As well as using these companies to house their direct holdings, four Allco executives - David Coe, Nick Bain. David Veal and Chris West - had collectively tipped shares into Allco Principal Investments, which was often used as collateral to raise additional funding to co-invest in Allco's unlisted funds.

NAB was the only creditor to vote against placing private companies linked to the listed Allco Finance into a deed of company arrangement, according to the minutes of the meeting. The bank was overruled when 26 creditors opted to push ahead with a work-out plan.

A deed of company arrangement covering the 14 companies is expected to be finalised this week. Allco Finance could be required to inject funds into a private vehicle to assist with the plan. However, this is likely to maximise the $60 million-plus it claims it is owed from the collapsed companies.

Allco Finance recently warned it remained in a fragile position after delivering a $1.74 billion net loss for 2008, mostly as a result of write-downs on assets .

Allco is trying to stabilise its finances by pushing ahead with a program of asset sales to cut debt.

Collectively the 14 Allco firms owe creditors $854m million, most of which is claimed against Allco Principal Investments.

NAB has one of the largest claims, totalling $89.5 million against Allco Principal Investments, and Bank of Scotland International has claimed nearly $50 million.

Private vehicles owned by current and former Allco executives are also claiming funds.

One company, Raejoe - owned by Allco's previous executive chairman, David Coe - is claiming $2.12 million. Private companies owned by Allco dealmakers David Veal and Chris West are claiming $2.57 million.

The administrator, Stephen Parbery, has noted that the 14 companies have a "complex interwoven nature".