The final key chapter in the saga of failed 1990s telco One.Tel looks set to play out today with a financial settlement of between $40 million and $50m, which only slightly exceeds estimates of what the liquidation has cost so far.
Interests associated with former directors Lachlan Murdoch and James Packer are understood to be ready to sign off a deal that will pay that amount to creditors of the company, which collapsed in May 2001.
Of the money so far spent on winding up the company, about $20m is understood to have been spent pursuing Mr Packer and Mr Murdoch.
The deal will be examined and possibly ratified today in the NSW Supreme Court by judge Paul Brereton, following a compulsory mediation process between the two businessmen’s interests and Special Purpose Liquidator Steve Parbery.
Mr Parbery, installed in June 2012, had originally claimed $244m. The company collapsed after the board cancelled a $132m rights issue that allegedly might have kept it afloat.
Both Mr Murdoch and Mr Packer, who collectively lost more than $900m on their investment, abstained from voting on the rights issue as they had been involved in underwriting it. Both men have stated they were “profoundly misled’’ about the company’s financial situation.
One.Tel was founded in 1995 by Mr Packer’s former Cranbrook schoolmate Jodee Rich, who brought Mr Packer on board as a shareholder and then director, who in turn brought in Mr Murdoch.
A significant part of the costs of the wind-up have been expended not by the original liquidator, Steve Sherman of Ferrier Hodgson, but by Paul Weston of Pitcher Partners, who was appointed a Special Purpose Liquidator in 2003 to examine the final days of One. Tel.
Mr Sherman had a potential conflict in having attended a One.Tel board meeting just before the company collapsed.
In 2010, Mr Rich dropped a legal action he had been planning against Mr Packer and Mr Murdoch, again in relation to the cancelled rights issue.
Mr Weston spent years from about 2005 seeking litigation funding for an action against Mr Packer and Mr Murdoch, finally doing a deal with Hong Kong-based Louis Reijtenbagh.
But in November 2012 Mr Weston was sacked as Special Purpose Liquidator by judge Patricia Bergin of the NSW Supreme Court, who said he had breached a legal obligation of objectivity.
By then he had spent at least $18m of money potentially owed to creditors, while Ferrier Hodgson had spent more than $25m altogether.
Justice Bergin said of Mr Weston’s actions that there was “no doubt that the level of remuneration and expenses is, prima facie, extraordinarily high’’.
In September 2102 Mr Parbery launched an unsuccessful bid to have the High Court permit a new court action in his legal pursuit of Mr Packer and Mr Murdoch.
Mr Sherman and his colleague Peter Walker have to date paid out $13m of employee entitlements and $80m — representing 23.5c in the dollar — to unsecured creditors.
The two biggest outstanding creditors are SingTel Optus and Telstra, whose services One.Tel onsold to phone users, with SingTel Optus having driven the sacking of Mr Weston.
None of the parties involved in the mediation was available for comment last night.