The special purpose liquidator of collapsed telecommunications company One.Tel has announced he has filed a lawsuit on behalf of a group of the firm’s creditors, seeking to recoup a reported $244 million from the company’s former investors, including James Packer and Lachlan Murdoch.
Paul Weston, of accounting firm Pitcher Partners, confirmed he has launched the long-awaited lawsuit yesterday.
Among the defendants named are media moguls Packer and Murdoch, who were former directors and investors in One.Tel through their companies Consolidated Media Holdings and News Corporation. The two media giants have also been named in the action.
One.Tel collapsed in 2001 after News Corp and Consolidated Media pulled out of a plan to underwrite a $132 million capital raising that would have provided vital short-term cash to keep One.Tel’s operation going.
The collapse was the subject of a long-running court battle between the Australian Securities and Investment Commission and former One.Tel executive Jodee Rich.
The corporate watchdog was unsuccessful in its attempts to pursue Rich for civil penalties in the NSW Supreme Court, with Justice Richard Austin failed to prove its case. “Time and again they were shown to be unpersuasive when the underlying financial details were investigated,” he said.
However, Austin also speculated in the case that if the share issue underwritten by Consolidated Media and News Corp had gone ahead, One.Tel could have kept going for at least a few more months.
“One of the unanswered questions is whether One.Tel would have survived if, in May 2001, PBL/CPH and News had maintained their support for the company and implemented their plan to underwrite a deeply discounted rights issue to raise $132 million… The withdrawal of that support, and the abandonment of the rights issue, may well have ensured that the company could not survive,” Austin said.
One.Tel’s largest creditors are Optus, Cisco Systems and Telstra.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
