Date: Sat, 25 Apr 1998 22:11:21 +0100
From: Hugh Rodwell <m-14970-AT-mailbox.swipnet.se>
Subject: M-I: Wharfies: (Fwd) Banks stay silent on $130m debt


Forwarded from MUA-update, two pieces from Sydney Morning Herald, 25 April,
about financial shenanigans concerning Patrick Stevedores.

Cheers,

Hugh
_________________________

LIQUIDATION OPTIONS

     Saturday, April 25, 1998

     Banks stay silent on $130m debt

     By IAN VERRENDER

     The syndicate of seven banks owed more than $130 million by the four

insolvent companies that provide labour to  Patrick stevedores appeared
unconcerned yesterday about suggestions the companies may be liquidated.

     The money lent to the four companies was secured against hard assets
they owned. But a restructuring last year shifted almost $300 million worth
of assets into other entities within the Patrick group, leaving the labour
companies with a mountain of debt and no assets.

     Events such as this normally would have banking syndicates threatening
legal action and moving to protect their security. But yesterday they were
strangely quiet.

     Earlier this week, Maritime Union of Australia chief Mr John Coombs
accused the banks of being involved in a  "conspiracy" with Patrick and the
Government to break the the MUA.

     None of the banks - led by Citibank - would comment on the lending
arrangements yesterday but the Herald understands the banks are satisfied
that no breach of contract occurred when the assets from the four labour
hire companies were stripped.

     This situation, however, could create problems for the administrator
if the four companies are forced into liquidation.

     As secured lenders, the banks would be among the first in line to
receive any money owed. A court-appointed liquidator,  however, would have
difficulty retrieving any money for them if there were no assets to sell.

     In terms of corporate health, voluntary administration is similar to a
trip to a Macquarie Street specialist, receivership is akin to emergency
resuscitation in intensive care while liquidation is the corporate
equivalent of a trip to Rookwood  in a very long, very black station wagon.

     Voluntary administration was introduced in 1993 in an attempt to help
troubled companies trade their way out of difficulties following criticism
that too many companies were wound up unnecessarily during the recession in
the early 1990s.

     So far it has been a success and the administrators now running the
Patrick stevedores labour supply companies have a good track record in the
field.

     The administrators have a statutory responsibility to keep the
companies running, if at all possible. But they also have a legal
responsibility to do so only if they can be sure of paying all bills as
they fall due. Otherwise they would be obliged to liquidate the companies.

     Lang Corporation - the company that owns Patrick stevedores and in
turn the four labour hire companies - is not making their task easy. The
administrators claim Patrick owes the companies $16 million. This would be
more than enough to ensure viability of the companies and get the wharfies
back on the job.

     "At the moment his [Patrick's boss, Mr Chris Corrigan's] reply is that
he doesn't believe the amount is presently due and payable," one of the
administrators, Mr Peter Brook, said yesterday.

     This material is subject to copyright and any unauthorised use,
copying or
mirroring is prohibited.


****************************************************************


Patrick pulls out of 7 ports
  By JUDY HUGHES, BENJAMIN and PETER ALFORD

  25apr98


  PATRICK stevedores dramatically abandoned seven regional ports yesterday,
undercutting moves to rope the Maritime Union of Australia into a package
rescuing the jobs of the 2000 waterside workers sacked by the company.

  Patrick's parent company, Lang Corporation, advised the Australian Stock
Exchange that it was suspending indefinitely operations in Adelaide, Port
Kembla and Newcastle in NSW, Bell Bay and Burnie in Tasmania, Geraldton in
Western Australia and Alma in Queensland.

  Blaming the controversial union picketing of its terminals, the company
said the shutdown would affect at least 280 jobs.

  The axe fell even though administrators of the four insolvent Patrick
companies notionally employing the sacked unionists were negotiating seed
money with the Maritime Union of Australia to start up operations with union
  stevedores.

  But the feasibility of any rescue was further jeopardised by Lang's
notification that the insolvent companies had been technically in breach of
loan covenants since the appointment of the administrators - the device
used by the company to jettison its union workforce.

  Lang's statement to the ASX said the companies' banks had "reserved their
position" in terms of dealing with the administrators of Patrick Stevedores
No 1, No 2, No 3 and National Stevedores Tasmania.

  Senior administrator Peter Brook warned last night that the
administrators might have to pull out on Monday unless they could secure a
minimum of $3.6 million from either Patrick or the MUA.

  At the close of day-long talks in Sydney with union officials, Mr Brook
said: "We are hopeful ... the MUA I think understands the dilemma we are
in. They have a real interest in seeing these companies continue to
operate."

  Earlier yesterday, Patrick succeeded in securing a three-day stay, from
the High Court, of Federal Court orders  reinstating the union workers.

  John Howard weighed back into the dispute from Thailand, declaring he had
"no regrets" about the Government's strong backing for Patrick.

  Reaffirming his commitment to waterfront reform, the Prime Minister also
swung in behind Workplace Relations Minister Peter Reith, who has been
under heavy attack from the Opposition and ACTU for mishandling the
dispute.

  "Nobody should be in any doubt about the strength of my faith in Mr
Reith," Mr Howard said.

  "I don't have any regrets about anything the Government has done."

  Separately, Mr Reith yesterday moved to step up pressure on the MUA
accusing the union of making an agreement with the Carr Government which
was in breach of the Workplace Relations Act.

  Mr Reith said he had also referred a shipping accord between the MUA and
the New Zealand Seafarers Union to the Australian Competition and Consumer
Commission for investigation.


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