UPDATE – After taking legal action against administrators KordaMentha, WIN Corporation owner, Bruce Gordon, has successfully pushed back the date of the second Channel Ten creditors meeting to September 19th. The meeting will vote on CBS’s bid for the failed network
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Channel Ten backers, Murdoch-owned 21st Century Fox and Bruce Gordon, have made a last-ditch effort to thwart the takeover of Channel Ten by American behemoth CBS.
Mr Gordon’s lawyers are arguing that ahead of Ten’s collapse, administrators should have considered selling off the network to Mr Gordon’s private company Birketu and Lachlan Murdoch’s Illyria Nominees Television, which were both shareholders.
WIN Corporation has made an urgent application to the NSW Supreme Court on Wednesday to bring on a court hearing later in the week. Mr Gorgon is a majority owner of the company. WIN’s application was made on behalf of Chief Executive Officer and Channel Ten Director, Andrew Lancaster, who states he has not been paid directors fees.
Led by WIN, challengers are pushing to move back the date of the next Ten creditors meeting – currently set for 12th of September.
Challengers are also fighting for all shareholders to have a right to vote on the takeover proposal, and for the weighting of CBS’s vote to be reduced to $1. Due to a $172 million debt, CBS is Channel Ten’s largest creditor.
21st Century Fox will also reportedly front court alongside WIN.
The hearing will take place in the Supreme Court of NSW on Thursday and Friday.
Along with WIN, challengers will request the court to mandate KordaMentha to unveil “the expected value of any tax benefits to CBS (whether in Australia or in any other jurisdiction) as a result of CBS acquiring shares in Ten Network”. Information will also be sought about whether Channel Ten will be capable of trading, should the Proposed CBS DOCA be approved and transaction completed given the size of the secured debt owned to CBS.
Tuesday and Wednesday saw significant legal action from Mr Gordon and Lachlan Murdoch’s lawers, as they informed KordaMentha administrators of their concerns surrounding the second report to creditors.
KordaMentha’s report has been described as “defective disclosure”.
Representative John Atanaskovic states, “Even on cursory inspection, however, it is clear that the report obviously fails properly to discharge the obligation of setting out the [administrators] reasons for those opinions”
“Even on cursory inspection, however, it is clear that the report obviously fails properly to discharge the obligation of setting out the [administrators] reasons for those opinions”
The report is also said to not include an independent expert’s perspective, nor sufficient analysis of the proposal presented by Mr Gordon and Mr Murdoch’s private companies, whilst not properly explaining the transaction deed from CBS.
Understandably, challengers have also voiced their concern that the CBS transaction does not allocate any votes to shareholders.
Mr Atanaskovic also states that WIN Corporation was not properly listed as a creditor.
“WIN is owed a liquidated debt by Network Ten in respect to unpaid amounts under a program supply agreement between WIN and Network Ten”.
When asked to comment, a KordaMentha spokesperson has voiced the insolvency house’s resistance to the challengers, stating it “has no plans at this stage to defer the Second Meeting of Creditors scheduled for Tuesday 12 September. The report to creditors was comprehensive and compliant”.
