Judge considers new Gippsland deal
A decision over the future of troubled lender Gippsland Secured Investments has been delayed after a Federal Court judge said she would consider a pledge by local investors to inject more funds into the company's rescue package.
The rescue group told the court it had secured a further $1.5 million in funding that could help buoy the company should the court agree to a recapitalisation plan.
Before sealing the fate of the lender, Justice Kathleen Farrell gave the parties until Monday to renegotiate a new deal that took into account the extra cash.
The rescue group has raised several million in funds from a consortium of community and business leaders, including former ANZ director John Dahlsen, and is asking the court to grant it two weeks to recapitalise Gippsland and avoid receivership.
The proposal faces opposition from the trustee of the debenture group, The Trust Company, and the corporate regulator.
They argue that Gippsland is insolvent and should not be incurring any further costs in the form of legal fees or expenditures.
The Trust Company argued that the rescue group was holding debenture holders "hostage" by putting forth a plan that was contrary to their interests.
"We are dealing with an application which involves discretion over how the interests of debenture holders are best served," counsel Alexander Street said.
Gippsland froze its $150 million in funds on July 19, after a review of its lending book by The Trust Company found a higher than expected level of debt.