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MR09-47 ASIC applies to Federal Court to wind up Storm Financial
ASIC today applied to the Federal Court to put Storm Financial Ltd (Storm) into liquidation, as we believe that a winding up of Storm will be in the best interests of creditors and retail investors.
The Federal Court adjourned the meeting of creditors to 30 March 2009 and has fixed ASIC’s application for a full hearing next Tuesday 24 March.
ASIC’s application was prompted by an ‘Information Memorandum’ published earlier this week on the Cassimatis’ website, which ASIC believes is misleading. This Information Memorandum concerns the Cassimatis’ proposal for a Deed of Company Arrangement (DOCA) to be voted on at the creditors meeting.
There are about 3000 margin loan or retail investor clients of Storm, who might be potential creditors of Storm. The issues raised by the proposed DOCA are complex, and concern the conduct of potential future litigation by Storm as well as releases of liability of the directors of Storm. ASIC’s application also raises the issue whether the DOCA is so flawed that it could ever be in the interests of creditors and whether creditors could be expected to make an informed choice about the DOCA in any event.
ASIC is investigating all of the circumstances around the collapse of Storm, which includes possible actions against Storm, its directors and officers. ASIC is also assessing steps that could be taken against others who might have been involved (e.g. financiers). All such interventions would remain available to ASIC following a winding up of Storm.
ASIC has been directed by the Court to publish further information on its website and as soon as possible following today’s application. This will also include a copy of the orders made by the Court today. ASIC has also been directed to publish certain newspaper notices tomorrow in relation to the adjournment of the creditors meeting.