Jailed Opes Prime director's parents pay $340,000

THE parents of disgraced, jailed Opes Prime director Anthony Blumberg have paid the failed stock lender $340,000, part of $4.5 million recovered by the company's administrator earlier this year.

By InvestSMART · 8 Sep 2011

By InvestSMART ·
8 Sep 2011

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THE parents of disgraced, jailed Opes Prime director Anthony Blumberg have paid the failed stock lender $340,000, part of $4.5 million recovered by the company's administrator earlier this year.

Accounts filed by Opes Prime's administrator, John Lindholm, of Ferrier Hodgson, show the single biggest payment collected in the six months between February and July was about $3.5 million a payout from Opes Prime's investment in power management company Energy Response.

Former Opes Prime staff also made payments, totalling about $5000.

Mr Lindholm filed the accounts in his role as administrator of a scheme of arrangement under which Opes Prime's bankers, ANZ and Merrill Lynch, have so far paid 37? in the dollar to former customers owed about $610 million.

The accounts list the $340,200 received from Basil and Carole Blumberg on June 10 as "accounts receivable (pre-appointment)".

It is believed the money is the proceeds of the sale of an apartment at the Brighton on Bay Retirement Village bought by the couple in March 2008, just before Opes Prime's collapse.

Ferrier Hodgson and the Blumbergs had been locked in a dispute over the apartment, with the insolvency firm insisting the apartment was bought using money from a company in the Opes Prime group, Leveraged Capital.

A receptionist at the Brighton on Bay Retirement Village said the couple had bought the apartment but never moved in.

A $3.5 million payment from Energy Response was the proceeds of the sale of the company to US group EnerNOC in early July, Energy Response executive director Ross Fraser said.

He said Opes Prime's private equity arm, Hawkswood, "invested in Energy Response a number of years ago".

"They therefore received a payment for those shares when EnerNOC took over the company," he said. Energy Response is a middleman between power companies and big power users.

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Frequently Asked Questions about this Article…

What recent funds did Opes Prime's administrator recover and who received them?

Opes Prime's administrator, John Lindholm of Ferrier Hodgson, filed accounts showing about $4.5 million recovered earlier in the year. The biggest single inflow was about $3.5 million from the sale of Energy Response, plus $340,200 paid by Basil and Carole Blumberg and roughly $5,000 from former Opes Prime staff.

Why did Basil and Carole Blumberg pay $340,200 to Opes Prime's administrator?

The accounts list $340,200 received from Basil and Carole Blumberg on June 10 as 'accounts receivable (pre-appointment)'. The money is believed to be proceeds from the sale of an apartment at Brighton on Bay Retirement Village that the couple bought in March 2008, just before Opes Prime's collapse.

How did the sale of Energy Response benefit Opes Prime's recovery efforts?

Opes Prime (through its private equity arm Hawkswood) held shares in Energy Response. When US group EnerNOC bought Energy Response in early July, Hawkswood received a payout for those shares, which translated into about $3.5 million being paid into the Opes Prime estate.

What role did Ferrier Hodgson and administrator John Lindholm play in repaying Opes Prime customers?

John Lindholm, as administrator from Ferrier Hodgson, filed the accounts and administered a scheme of arrangement under which Opes Prime's bankers (ANZ and Merrill Lynch) have been making payments to former customers. The administrator's role included recovering assets and documenting receipts for distribution.

How much were former Opes Prime customers owed and what have they been paid so far?

Former customers were owed about $610 million. Under the scheme of arrangement, ANZ and Merrill Lynch have so far paid a partial payout to those customers—the accounts report a 37‑in‑the‑dollar payment toward those debts.

What was the dispute about the Brighton on Bay apartment mentioned in the accounts?

Ferrier Hodgson and the Blumbergs had been in a dispute over the apartment. The insolvency firm argued the apartment was bought using money from a company in the Opes Prime group, Leveraged Capital, while a receptionist at the retirement village said the couple bought the apartment but never moved in.

Who is Hawkswood and how is it connected to Opes Prime's investments?

Hawkswood is Opes Prime's private equity arm. According to Energy Response's executive director Ross Fraser, Hawkswood invested in Energy Response years ago, which is why Opes Prime (via Hawkswood) received a payment when EnerNOC acquired Energy Response.

What practical takeaways should everyday investors note from the Opes Prime asset recoveries?

The Opes Prime accounts show that administrators can recover funds from investment exits and related-party transactions, and that creditors may receive only partial repayments. Everyday investors should be aware of counterparty and custody risk, monitor where investments are held, and understand that insolvency processes can lead to lengthy, partial recoveries.