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OPI Pacific Finance debenture holders get $3.9M from Octavia 'dividend'

Wednesday 20th June 2018

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The receivers of OPI Pacific Finance have paid a further $3.9 million to out-of-pocket debenture holders after receiving a 'dividend' from the liquidators of its failed parent.

The payment in April brings the total recovery to 32.9 cents in the dollar, based on balances owed when the company put a moratorium on payments to its debenture holders. In September 2009, sixteen months into the moratorium, its trustee put OPI into receivership. That had followed a Supreme Court ruling in Queensland that the parent company be put into liquidation. At the time of moratorium, the New Zealand firm owed $256.7 million to secured debenture holders and a further $56.7 million to unsecured noteholders.

OPI had lodged an unsecured claim of $372 million against its failed parent, the MFS Group, formerly known as Octavia, as it held a put option that would require Octavia to pay the face amount of its loans in arrears for more than three months. Last November Octaviar's liquidators announced an interim dividend process including tranches of $2.9 million and $1 million to OPI that were paid this year.

The MFS Group, formerly known as Octavia, collapsed in 2008 owing A$2.5 billion. Its OPI unit provided finance to commercial property developers and investors.

Receivers Colin McCloy and Maurice Noone said in their latest six-monthly report that they anticipated further recoveries from the parent once its liquidators had wound up their administration. 

"The timing and extent of these is unknown at present as distributions are dependent on the outcome of recovery actions and other creditor claim assessments being undertaken by the liquidators," the receivers said, noting that the parent entities have other creditors "and the assets in these companies appear to be insufficient to meet all liabilities in full."

In November 2013 the Financial Markets Authority laid charges against four directors, who all pleaded guilty to misleading investors, the last being former director David Anderson in 2015 when he was sentenced to 300 hours community work and fined A$100,000 in reparations to investors. All four former directors received community service sentences and total fines were A$400,000.

Receivership has been a costly exercise. Receipts and payments for the entire period from September 2009 to March 14 this year show legal fees were $3.1 million. Receivers fees and disbursements have added up to $2.9 million and trustee fees were generated to the level of $688,379. Total payments were just under $11 million and total receipts $37.9 million.


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