Ferrier Hodgson, the administrators of ABC Learning (a former constituent of the S&P/ASX 100), are reportedly investigating a A$1bn damages claim against the former directors and the auditors. The administrators are being funded by IMF Australia (a listed company which provides funding of legal claims and other related services where the claim size is over A$2m).
The administrator is reportedly also looking to recover up to A$500m from banks who, according to IMF Australia, “jumped the queue” by becoming a secured creditor six months before ABC collapsed under A$1bn of debt in November 2008.
Issues to be investigated under a series of public examinations of former ABC directors, their auditors Pitcher Partners, members of its banking syndicate, and external consultants include:
- the possibility of insolvent trading;
- possible breaches of directors’ and auditors’ duties;
- possible voidable transactions if ABC is placed into liquidation; and
- the circumstances surrounding a charge taken out six months before the company went under.
In August 2009, the Australian courts allowed the continuation of the administration of ABC Learning for a third time, with the administration period now allowed until 31 March 2010, in order to allow for the orderly sale of the Australian business.
Further Reading
Business Day: Former ABC Learning directors face $1b claim
Last Updated: 23 October 2009