Mediation to resolve Ansett super row
Sat "Melbourne Age"
Mediation to resolve Ansett super row
By Leonie Wood
November 15, 2003
The protracted dispute that has blocked distribution of $415 million to Ansett employees may be close to a breakthrough after a Federal Court judge yesterday urged the parties to pursue a mediation on Tuesday.
Simon Whelan, QC, told Justice Alan Goldberg in the Federal Court that the airline's administrators and their adversary - the trustees of the Ansett Ground Staff superannuation fund - supported the mediation, and they would try to get the Commonwealth and ACTU to attend.
If a settlement is reached next week, Ansett's employees may receive a portion of their outstanding redundancy payments within the next few months.
But resolution appears to hinge on the Commonwealth. It lent Ansett's administrators $335 million in October 2001 to pay workers' entitlements and, to insure against any shortfalls in getting the loan back, it raised $280 million through a $10-a-seat ticket tax. The tax has raised about $135 million more than the Government needs for full repayment.
The trustees have lodged a claim with the administrators for as much as $180 million to meet payments, which the fund says represents the amount it has to pay workers who were retrenched and covered by the Ground Staff plan.
The claim has already been pursued by the trustee through the Victorian Supreme Court and its Court of Appeal, but this is the first time it has gone to mediation.
Justice Alan Goldberg expressed concern about the huge legal expenses involved in the case and the frustrations for workers as it dragged through the courts.
"How much money has gone out of circulation with the 20 days it was in the Supreme Court, and the Appeal court, and here?" Justice Goldberg asked.
"Millions, your honour," Mr Whelan replied.
Justice Goldberg noted that the participation of the Commonwealth and the ACTU in mediation could be "critical" to a breakthrough.
"It's very important for those parties to be present in order to resolve this dispute," he said.
The trustees have argued that a deed of company arrangement promoted by the administrators and ACTU, and approved by Ansett's creditors in March 2002, unfairly relegated the Ground Staff fund's claim to the ranks of unsecured creditors.
Mr Whelan rejected the trustees' allegations earlier this week that the administrators misled Ansett's workers or that they failed to provide crucial information about the ramifications of relegating the fund's claim.
He said information provided by the unions at the time made it "as clear as blazing daylights" that the deed meant a choice between receiving redundancy payments early or preserving the amounts in a super fund.
Ansett administrator Mark Korda, of insolvency specialists KordaMentha, yesterday said he was hopeful of a resolution surfacing next week.
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