The industry’s banking community has experienced a rollercoaster of emotions on the back of mergers, companies being placed into administration and legal proceedings.
Also last week, Deloitte was appointed as the voluntary administrator of Babcock & Brown.
The decision follows a vote against the restructure of Babcock & Brown’s subordinated notes by New Zealand note holders.
As a result of the decision, the directors of the company decided Babcock & Brown will become insolvent. The company’s first meeting of creditors will be held on 25 March in Australia and New Zealand.
Collapsed financial advisory firm, Storm Financial, is also awaiting news from a creditors’ meeting.
Former group founders were last week scrambling to secure votes for its deed of company arrangement (DOCA) in a last ditch effort to save the company from liquidation.
By signing the DOCA, former clients would be able to join the Storm Recovery Group, Storm founder Emmanuel Cassimatis said.
According to details of the DOCA, the Storm Recovery Group will streamline a client’s claim against Storm, and Storm’s claims against insurers.
“This DOCA includes you and your circumstances. The DOCA provides for both these claims to move forward and pays for the legal costs so you do not have to pay for them,” Cassimatis said.
Storm administrator Worrells Solvency and Forensic Accountants knocked back Storm’s DOCA, recommending instead that creditors resolve to place the company into liquidation.
However, a new element that has been added to the mix is the emotional state of former Storm clients.
“However, there is another thing that needs to be factored in and that is the number of victims we have are just about at the pits of their despair and it’s only natural that people might see this and … grasp at some opportunity to restore their circumstances,” Storm Investors Consumer Action Group joint chairman Mark Weir said.
An ultimate decision on whether the firm will be placed into liquidation will be known on 23 March.
For Macquarie Bank, the past week has brought legal woes.
Not only is the banking giant rumoured to be on the brink of shedding large amounts of jobs, Macquarie is now embroiled in a legal case with a number of its former employees.
Late last week, Macquarie Bank filed proceedings against former private client advisers Mark Minchin and Peter Simpson.
Macquarie is seeking damages, equitable compensation and a restraining order against the pair.
MLC and National Australia Bank announced the merger of a number of business divisions; quashing rumours the banking group was looking to jettison its wealth arm.
In fact, MLC is not only planning to remain a strong player in the wealth space, but intends to extensively expand its existing operations.
Such diverse movement in a week could be seen as a positive for the industry in light of the continued depressed market, however, hopefully further positives are on the horizon.
