This was in the Gold Coast Bulletin on Friday 9th September, 2011.
MFS creditors up for partial payout
Written by: Nick Nichols
FORMER Gold Coast financial
powerhouse MFS might be in
liquidation but it is sitting on a
$1S0 milllon pile of cash and still
bleeding $500,000 a month in fees
to liquidators.
Yet there could be some good
news for creditors by Christmas.
Wellington capital managing
director Jenny Hutson told investors
in the former MFS-controlled
Premium Income Fund that liquidator
Kate Barnet had taken an
"innovative" approach to distributing
the stricken company's cash to
existing creditors.
She said this could deliver a partial
payout to PIF unitholders
before the end of the year.
MFS - now known as Octaviar -
has registered debts of about
$2.1billion.
PIF accounts for 10 per cent of
the claim, or an estimated $15 million
share of the MFS cash kitty.
That represents about 2Q a unit
for PIF investors which is on top of
the 27C a unit the fund is estimated
to be worth today.
Investors already are almost
three years overdue for the initial
3Q payout promised by Ms Hutson
in 2008, although Wellington
Capital is also yet to draw any management
fees from the fund.
Wellington Capital - which now
controls the fund despite a challenge
by insolvenry specialist Ian
Ferrier earlier this year - has repaid
2f a unit to investors. Ms Hutson
said she was hopeful at least
another lQ would be paid before
Christmas from the MFS dividend. It had been 1000 days since
Ms Hutson last addressed investors
in the fund on the Gold Coast.
"A lot has happened and a lot has
still to happen," she told about 300
unitholders at the Gold Coast Convention
Centre yesterday.
In 2008, Ms Hutson had hopes of
reviving PIF and restoring units to
their full $l value.
Yesterday, on the third leg of a
national tour, she told investors the
crash in asset values since then had
taken that option off the table.
"One dollar is not a number we
will ever see again," she said.
The fund, once worth $770 million,
is now valued at $224.9 million.
Its Gold Coast portfolio,
including assets bought by Raptis
Group, has been responsible for
a significant portion of the fund's
losses.
Ms Hutson said the fund had
$51.2 million in assets under conditional
contract which could
deliver another 5f to unitholders.
Every $8.3 million recovered by
PIF returns lt a unit to investors.
Ms Hutson said a further
$100 million in-assets would go to
market over the next 12 months.
Still on foot were legal claims
totalling $211 million against MFS
and parties associated with the
company, including a compensation
claim spearheaded by the Australian
Securities and Investments
Commission for $147.5 million.
She said the claim could take 18
months to two years to achieve.
PIF PAYMENT PLAN
Total Assets $224.9m
Already Paid $15.0m
MFS Distribution $15.0m
Under Contract $52.5m
Next 12 Months $100m
Litigation Unknown
*Every $8.3 million recovered is worth 1c a unit
MFS creditors up for partial payout
Written by: Nick Nichols
FORMER Gold Coast financial
powerhouse MFS might be in
liquidation but it is sitting on a
$1S0 milllon pile of cash and still
bleeding $500,000 a month in fees
to liquidators.
Yet there could be some good
news for creditors by Christmas.
Wellington capital managing
director Jenny Hutson told investors
in the former MFS-controlled
Premium Income Fund that liquidator
Kate Barnet had taken an
"innovative" approach to distributing
the stricken company's cash to
existing creditors.
She said this could deliver a partial
payout to PIF unitholders
before the end of the year.
MFS - now known as Octaviar -
has registered debts of about
$2.1billion.
PIF accounts for 10 per cent of
the claim, or an estimated $15 million
share of the MFS cash kitty.
That represents about 2Q a unit
for PIF investors which is on top of
the 27C a unit the fund is estimated
to be worth today.
Investors already are almost
three years overdue for the initial
3Q payout promised by Ms Hutson
in 2008, although Wellington
Capital is also yet to draw any management
fees from the fund.
Wellington Capital - which now
controls the fund despite a challenge
by insolvenry specialist Ian
Ferrier earlier this year - has repaid
2f a unit to investors. Ms Hutson
said she was hopeful at least
another lQ would be paid before
Christmas from the MFS dividend. It had been 1000 days since
Ms Hutson last addressed investors
in the fund on the Gold Coast.
"A lot has happened and a lot has
still to happen," she told about 300
unitholders at the Gold Coast Convention
Centre yesterday.
In 2008, Ms Hutson had hopes of
reviving PIF and restoring units to
their full $l value.
Yesterday, on the third leg of a
national tour, she told investors the
crash in asset values since then had
taken that option off the table.
"One dollar is not a number we
will ever see again," she said.
The fund, once worth $770 million,
is now valued at $224.9 million.
Its Gold Coast portfolio,
including assets bought by Raptis
Group, has been responsible for
a significant portion of the fund's
losses.
Ms Hutson said the fund had
$51.2 million in assets under conditional
contract which could
deliver another 5f to unitholders.
Every $8.3 million recovered by
PIF returns lt a unit to investors.
Ms Hutson said a further
$100 million in-assets would go to
market over the next 12 months.
Still on foot were legal claims
totalling $211 million against MFS
and parties associated with the
company, including a compensation
claim spearheaded by the Australian
Securities and Investments
Commission for $147.5 million.
She said the claim could take 18
months to two years to achieve.
PIF PAYMENT PLAN
Total Assets $224.9m
Already Paid $15.0m
MFS Distribution $15.0m
Under Contract $52.5m
Next 12 Months $100m
Litigation Unknown
*Every $8.3 million recovered is worth 1c a unit