Liquidator Asks Court To Rule On Fai Loan
The Age
Tuesday June 17, 2003
Sydney
HIH liquidator Tony McGrath has asked the NSW Supreme Court to decide whether Brad Cooper, a former business associate of FAI Insurance chief executive Rodney Adler, is liable to repay a $1.38 million loan that FAI New Zealand Insurance gave to one of his companies.
Mr Cooper had signed a personal guarantee for the loan.
The action is the first attempt to get a loan paid back since the Royal Commission report on HIH was released two months ago.
The McGrath claim against Mr Cooper is to be heard before Justice Cliff Einstein on July 3.
During his examination by the HIH liquidator last December, Mr Cooper said HIH (which had acquired FAI in 1998) had agreed to write off the loan in late 2000 as part of a complicated ``divorce" of his companies from the then mortally wounded insurer.
After interest payments had been made on the loan for a year, FAI chief executive Rodney Adler had wanted to turn the loan into shares in Mr Cooper's marketing company, Vision Publishing.
Yesterday Robert Beech-Jones, for the liquidator, said evidence about the loan would be sought from Mr Adler, former HIH managing director Ray Williams, former HIH executive William Howard and corporate adviser Colin Richardson.
Mr Beech-Jones, who was also counsel assisting the HIH Royal Commission, said he had not determined whether evidence from the four individuals would be given in statement or oral form, but asked Justice Einstein for subpoenas calling on the four to give oral evidence if they were unwilling to give statements in relation to the loan. This was because some of the witnesses ``may be unco-operative because of the collapse of HIH".
Mr Cooper is also expected to give his version of events leading up to the granting of the loan and the guarantee.
Mr Beech-Jones told the court Mr Cooper's defence was that he had an oral agreement with Mr Adler when the guarantee was signed that the debt would be converted to equity. He said he also had a verbal agreement from Mr Williams for the debt-to-equity conversion, although Mr Williams had by that time resigned as HIH's CEO.
Mr Beech-Jones said he would reply to Mr Cooper's defence within a week.
© 2003 The Age