Below is a transcript of a letter dated 5th January 2006 intended for all unsecured creditors. It has been put on this web site due to the tightness of time over the holiday period and the fact that the 2nd meeting of creditors is on Monday 9th January at 1:30pm at the Newcastle Panthers Club. We would like the views in the letter aired as widely as possible, to all unsecured creditors, and would encourage as many people to attend the meeting, as possible. If not in person then by a proxy holder, who can attend.
For a PDF copy of the original letter please click the following link QPN Letter
To help the understanding of the background to this letter, we have provided links on this site to information provided to us by the administrator for HBM - Star Dean-Willcocks. This information, we have been told by other creditors, has not reached some of them due to holiday mail delays. However, as it has been provided by others, QPN can take no responsibility for any mistakes contained therein.
A full copy of the second report to creditors dated 29th December 2005 for HBM - SCE Mining from Star Dean-Willcocks can be downloaded in PDF form by clicking Full Report Please note this file is 2Mb
A list of unsecured creditors provided by the administrator Star Dean-Willcocks.
Excel spreadsheet of unsecured creditors created from schedule H
QUARRY PRODUCTS (NEWCASTLE) PTY LTD
ACN 001 657 718 ABN 63 001 657 718
PO BOX 23
MAITLAND NSW 2320
PHONE: (02) 4933 9199
FAX: (02) 4933 4034
5th January 2006
LETTER TO THE UNSECURED CREDITORS OF HUNTER BULK MATERIALS (“HBM”)
The main proposals before the meeting on Monday are to:
i) That HBM sign a document known as a Deed of Company Arrangement; or
ii) That HBM be put into liquidation.
Each of the above has potentially different consequences for the unsecured creditors.
In simple terms i) means that HBM will enter into a document, the draft contents of which are annexed as “3” in the report by the administrator. That administrator predicts a return of 10c in the dollar for the unsecured creditors under his deed.
However, it also means that no investigation is undertaken into how HBM, being one of a group of companies under the control of the Newman family, apparently and suddenly finds itself indebted to the tune of $12,564,907.00 to the unsecured creditors (page 8 of the report).
Yet this same company that has been unable to pay its unsecured creditors has been able to undertake transactions with a related company (see pages 12 of annexure 2 of the report) to the value of $31,614,078. An investigation of these transactions by a liquidator could find that they are either partially or wholly uncommercial. Such a finding in relation to, say 5% of that amount would have a potential return to unsecured creditors of $1,580,703.90, a return of 48c in the dollar, excluding the related parties or 12.6c in the dollar if all such related parties claims are validly admitted into the liquidation. The second result is a better result for the related parties and a query must arise as to why those parties are prepared to accept nothing under the proposed deed except what may come out of very problematic litigation with Barclay Mowlem which will be sure to launch a counterclaim for breach of contract. We can expect this to take years to resolve and not necessarily in favour of HBM.
The effect of agreeing to enter into the Deed of Company Arrangement is to deny a liquidator (option ii) above) the opportunity to investigate these transactions, the beneficiaries of which, both as to receipt and taxation effect, are unknown. Further, other transactions appear to benefit other creditors and not the unsecured creditors, for example, the ANZ, a secured creditor.
Once a Deed of company Arrangement is entered into, barring interference from the Supreme Court, funded by the unsecured creditors, and other than the discretionary rights available to a deed administrator, no other facility exists for the proper investigation of what has transpired with HBM.
It is my view that all unsecured creditors should attend the meeting on Monday to ensure a vigorous examination of the proposed deed occurs and to vote for appointment of a liquidator if the deed is not improved by INCREASING and GUARANTEEING the return to unsecured creditors. Alternatively, you can nominate our proxy, our solicitor, Phil Hewitt as your proxy. In nominating a proxy, you can direct how the proxy votes, i.e., if you don’t want a deed to be passed, you can nominate that to occur. Any appointment of proxies should be forwarded to me for use at the meeting. Additionally, you should ensure that you return the proof of debt to Star Dean-Willcocks on facsimile 9223 3011.
Mal Frost
Director of Quarry Products (Newcastle) Pty Limited.
Email: malfrost@qpn.com.au
Phone: 02 4933 9199
Fax: 02 4933 4034
Mobile: 0429 494 460
Information published 6th January 2006