Nomad Telecommunications Ltd class action
Nomad Telecommunications Ltd (NTL) was the holding company in a group of companies that carried on business in the telecommunications industry. Its plans to undertake an initial public offering and list on the Australian Stock Exchange were aborted in late 1999, and again in the first half of 2000 (largely as a result of the so called "tech wreck" in April 2000).
The group continued in business until January 2001, but its attempts to raise further equity capital in the second half of 2000 were unsuccessful. Most of the entities in the group (including NTL) were placed in receivership on 18 and 19 January 2001. On 22 January 2001 the Supreme Court of Queensland ordered that NTL be wound up.
Maurice Blackburn acted for the liquidator of NTL in proceedings which the liquidator brought against three former directors of NTL. The proceedings were being funded by IMF (Australia) Ltd.
In the proceedings, the liquidator alleged that NTL was insolvent at all times from 1 June 2000 onwards, and that during the period from 1 June until 1 November 2000 (when the three directors resigned) NTL incurred unsecured debts of approximately $14 million, which it was unable to repay. The liquidator sought to recover that amount from the directors under the insolvent trading provisions of the Corporations Act.
The liquidator also alleged in the proceedings that at various times during the period 1 June to 1 November 2000 the directors breached the duties which they owed to NTL, by causing it to make substantial loans to its subsidiaries, which those subsidiaries were unable to repay. In relation to this aspect of the claim, the liquidator sought compensation from the directors of $5.6 million.
The proceedings have recently been settled in favour of the liquidator.
The case was conducted by Steven Foale, an experienced litigator in the area of insolvency, as part of Maurice Blackburn's growing insolvency practice.
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