Lawyer picks over Blue Star carcass as FMA fields complaints

Blue Star bondholders are being urged to contact a Sydney lawyer amid efforts to replace liquidators of the torn-apart printing group.

Meanwhile, the Financial Markets Authority has confirmed it has received multiple complaints this week relating to Blue Star after an asset sale that skinned bondholders of $105 million plus interest.

Paul Fordyce of Sydney-based PMF Legal is seeking support to try and obtain a court ruling to appoint new liquidators to Blue Star on behalf of minority shareholder McMilan Print.

They allege newly appointed Blue Star liquidators William Black and Andrew Grenfell of McGrathNicol have an apprehension of bias given their firm has an association with at least one of the senior lenders that are secured creditors of Blue Star.

“We have been reaching out to the bondholders to see if people are interested in supporting the concept of getting another liquidator in that might not have any appearance of connections with the parties in this matter,” Mr Fordyce told NBR ONLINE.

“We want that because we want to make sure that what has happened here is looked at by somebody who is going to look at it properly and not be influenced in any way consciously or sub-consciously.”

Mr Fordyce says his client was further aggrieved when Blue Star issued 6 billion shares last August, “completely watering down their shareholding”.

Blue Star was broken up and sold in going concern chunks last year, with the New Zealand assets going to one-time controlling shareholder Tom Sturgess and the Australian operations to former managing director Geoff Selig.

Following the sale, receivers from KordaMentha were appointed on January 15 and a day later Blue Star Group had messrs Black and Grenfell of McGrathNicol appointed as liquidators.

Blue Star had to make an application to the court to appoint the pair because of associations McGrathNicol had with senior creditors.

Latest financial statements show the sale of Blue Star netting less than 20% of the $385 million private equity firm Champ paid for the 85% of the business in 2006.

At the end of 2011 senior lenders, including major banks, were owed $254 million while bondholders had reluctantly agreed to a debt restructure extending their maturity profiles and a range of other concessions.

Bondholders voted for the restructure under threat of complete loss, which appears to be the case now anyway.

In a statement released to NBR on Wednesday the FMA said it had received five complaints against Blue Star, two of which were received that day.

“Our previous inquiries have indicated no apparent breaches of the legislation FMA enforces.”

See today’s NBR Print edition, where the Shoeshine column takes a closer look at Blue Star and the role of Goldman Sachs in the sale process.

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