News: Ansett workers face another wait for cash
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News: Ansett workers face another wait for cash
Ansett workers face another wait for cash
By LEONIE WOOD
Tuesday 4 December 2001
Ansett workers may be forced to wait another two weeks before receiving a promised $195 million payment from the Federal Government, a month later than agreed.
Many of the estimated 8000-plus Ansett workers made redundant at the failed airline are angry about delays in receiving payouts, which were due around November 19.
The reason for the latest delay is not clear. Much of it has been caused by the government's efforts to ensure that Ansett's millions of creditors cannot dump the government from a priority ranking among creditors, an issue the Federal Court will consider tomorrow.
Documents filed with the court last night revealed that in a terse letter to the administrators on November 22, Deputy Prime Minister and Transport Minister John Anderson threatened to make the $195 million an expense of the administration, a move that would have elevated the government above all other creditors and possibly jeopardised distributions to all creditors including employees.
In his letter, Mr Anderson scolded the administrators, Mark Mentha and Mark Korda of Anderson, saying it was "totally inappropriate" for them to make the government's stand on the $195 million ranking a success condition of the $1.1 billion bid for Ansett put forward by Melbourne businessmen Lindsay Fox and Solomon Lew.
Mr Anderson claimed the administrators devised this condition "as an incentive" to get unsecured creditors to approve a possible deed of company arrangement. A deed, if pursued, would have included a motion to knock the government from its agreed priority position next to employees.
Leon Zwier, legal counsel for the Mentha-Korda team, last week told Justice Alan Goldberg that some Ansett creditors had threatened to use their voting power to relegate the government to an unsecured creditor alongside trade creditors.
Now the administrators want to enshrine the government's priority position in an effort to speed up the payments to employees.
A spokesman for Workplace Relations Minister Tony Abbott said last night that the government was moving to get the payments out "as quickly as possible with the help of the administrators".
At the same time, the Fox-Lew group is doing due diligence on Ansett. The Fox-Lew group and Ansett's administrators are believed to have agreed to waive certain conditions of the bid: after failing to win concessions from the government, the buyers have agreed to drop a condition linked to government support.
In turn, the administrators plan to waive the requirement that the government relegate its priority position in the creditors queue.
Ansett's administrators have also told the court that the sheer size and complexity of the administration has raised several difficult issues, and that they need more time to prepare material for a second meeting of creditors.
In other material supplied to the court, co-administrators Mr Korda argued the administrators might take up to two years before they sold all the remaining Ansett assets, and it was unlikely creditors would receive a dividend in the first year.
Informal working papers drafted in October indicated the administrators budgeted for operating losses of $16 million in the first 12weeks of the Ansett Kick-Start venture. Overhead costs regardless of whether or not Kick-Start operated could total $60 million, while legal costs could run to $15 million.
By LEONIE WOOD
Tuesday 4 December 2001
Ansett workers may be forced to wait another two weeks before receiving a promised $195 million payment from the Federal Government, a month later than agreed.
Many of the estimated 8000-plus Ansett workers made redundant at the failed airline are angry about delays in receiving payouts, which were due around November 19.
The reason for the latest delay is not clear. Much of it has been caused by the government's efforts to ensure that Ansett's millions of creditors cannot dump the government from a priority ranking among creditors, an issue the Federal Court will consider tomorrow.
Documents filed with the court last night revealed that in a terse letter to the administrators on November 22, Deputy Prime Minister and Transport Minister John Anderson threatened to make the $195 million an expense of the administration, a move that would have elevated the government above all other creditors and possibly jeopardised distributions to all creditors including employees.
In his letter, Mr Anderson scolded the administrators, Mark Mentha and Mark Korda of Anderson, saying it was "totally inappropriate" for them to make the government's stand on the $195 million ranking a success condition of the $1.1 billion bid for Ansett put forward by Melbourne businessmen Lindsay Fox and Solomon Lew.
Mr Anderson claimed the administrators devised this condition "as an incentive" to get unsecured creditors to approve a possible deed of company arrangement. A deed, if pursued, would have included a motion to knock the government from its agreed priority position next to employees.
Leon Zwier, legal counsel for the Mentha-Korda team, last week told Justice Alan Goldberg that some Ansett creditors had threatened to use their voting power to relegate the government to an unsecured creditor alongside trade creditors.
Now the administrators want to enshrine the government's priority position in an effort to speed up the payments to employees.
A spokesman for Workplace Relations Minister Tony Abbott said last night that the government was moving to get the payments out "as quickly as possible with the help of the administrators".
At the same time, the Fox-Lew group is doing due diligence on Ansett. The Fox-Lew group and Ansett's administrators are believed to have agreed to waive certain conditions of the bid: after failing to win concessions from the government, the buyers have agreed to drop a condition linked to government support.
In turn, the administrators plan to waive the requirement that the government relegate its priority position in the creditors queue.
Ansett's administrators have also told the court that the sheer size and complexity of the administration has raised several difficult issues, and that they need more time to prepare material for a second meeting of creditors.
In other material supplied to the court, co-administrators Mr Korda argued the administrators might take up to two years before they sold all the remaining Ansett assets, and it was unlikely creditors would receive a dividend in the first year.
Informal working papers drafted in October indicated the administrators budgeted for operating losses of $16 million in the first 12weeks of the Ansett Kick-Start venture. Overhead costs regardless of whether or not Kick-Start operated could total $60 million, while legal costs could run to $15 million.
