KEY POINTS:
The dead duck company formerly known as MFS entered into the final stages of its embalming process this week. Under a 'Deed of company arrangement' agreed to by the company's creditors, MFS, or Octaviar as it is now known, will begin to flog off its remaining assets and pay down its debts as best it can - in order of preference, of course.
The US-based 'vulture' fund, Fortress, has secured first dibs on the cash at hand, leaving the rest to be distributed among the little people. Fortress will get A$25 million of the A$38.5 million it is owed by Octaviar.
Further down the list the New Zealand Octaviar subsidiary, OPI Pacific, might - maybe - score A$31-odd million in upfront payments - or about 9 per cent of what it has claimed from Octaviar.
New Zealand investors who sunk over $400 million into the poorly-crafted, horribly-executed, utterly-conflicted, overly-complex finance company set up by MFS here should not hold out hope for much more from the Australian entity.
Most of the money raised from New Zealand investors flowed back across the Tasman to invest in Australian commercial property - a lot of it also was lent to MFS/Octaviar related companies.
The byzantine structure of the overall business is beautifully illustrated by a flow chart on page 67 of the Octaviar Limited 'Report to creditors'.
I counted 74 different legal entities in the diagram - some of whom are engaged in legal action against their former related parties.
Octaviar began life in the offices of Gold Coast legal firm that became McLaughlins Financial Services (hence the MFS). I met one of the brains behind the MFS domination plan once at about the time the firm launched into the big time (I just googled myself to make sure I hadn't written anything flattering about MFS - I didn't).
After the meeting one of the MFS minions explained how the grand plan would soon unfold: "We're just getting all the ducks in a row."
David Chaplin
