Groves claims $3.3m from receiver

ABC Learning founder Eddy Groves is claiming $3.3 million inunpaid wages, holiday pay and long-service leave from the collapsed group.

ABC Learning founder Eddy Groves is claiming $3.3 million inunpaid wages, holiday pay and long-service leave from the receiver of his collapsed childcare corporation.

The former ABC boss, who was sacked as chief executive last September, is lining up asacreditor alongside 16,000 low-paid childcare workers - many of whom earn the minimum wage.

Mr Groves was being paid a salary of $1.6 million - just shy of $30,000 a week - at the time ABC chairman David Ryan sacked him, just days before the company crashed into receivership. ABC's childcare staff are claiming $31 million in holiday pay and long-service leave, or less than $2000 each.

The Liquor Hospitality and Miscellaneous Union, representing childcare workers, said it was a "bit rich" for Mr Groves to seek a payout.

"He lived a big lifestyle, with the helicopter and the cars, so for him to line up next to low-paid childcare workers is a bit outrageous," the union's assistant national secretary, Sue Lines, said yesterday. 

"He's comparing himself to workers on $14 to $19 an hour. He was one of the directors who put the company where it is today and he's got to take responsibility for that."

Mr Groves sued the union for defamation in 2003 after it distributed leaflets depicting him as "Uncle Scrooge", but the case was settled out of court.

The Australian understands the $3.3 million Mr Groves is claiming includes a $2.4 million golden handshake, equivalent to 18 months' pay, that had been written into his last employment contract as chief executive.

The remaining $900,000 is for accrued long-service leave and holiday-pay entitlements stretching back to the ABC float in 2001.

An announcement to the stock exchange last year revealed that Mr Groves took half his $1.6 million salary in cash and the rest in share options.

The new employment contract was drawn up in November 2007.

ABC has still not published its 2008 accounts.

The 2008 remuneration is more than double the $697,000 Mr Groves earned in 2006-07, as declared in ABC's 2007 annual report.

He pocketed $494,000 in salary and directors' fees, $151,000 in "non-monetary" benefits, and $44,000 in superannuation in 2007.

His ex-wife, Le Neve Groves - whom he divorced last month to marry fellow childcare executive Viryan Collins-Rubie on the Gold Coast within weeks - earned $600,000 last year. She took half in stock options.

The man hired to replace Mr Groves, clothing retailer Rowan Webb, is being paid $133,333 a month plus given use of a company car - $1.6 million if he works a full year.

Mr Groves was one of Australia's richest men, with BRW magazine estimating his fortune at $295 million in 2007. He topped BRW's Young Rich List at the age of 40, with an estimated $260 million wealth, in 2006.

But the entrepreneur's present financial position is unclear, as margin calls early last year forced him to dump most of his shares.

This triggered a rout that hammered the company's share price from $5 in January to 54c in August, when the Australian Stock Exchange suspended trade in ABC's near-worthless shares.

Mr Groves and his ex-wife made a paper loss of $77 million in a single margin call, a document filed in the Supreme Court of Queensland revealed last month. Dr Groves, who was employed as ABC's chief executive in charge of education, reportedly lodged an unfair dismissal claim with the Australian Industrial Relations Commission last year. She is suing her ex-husband for $44.2 million, alleging he "unjustly enriched" himself by selling her shares in the business they built from scratch, and not paying her dividends.

Mr Groves is defending the claim in the Supreme Court of Queensland. Neither Mr Groves nor Dr Groves would comment yesterday.

After ABC Learning collapsed in November, 2243 creditors lodged claims totalling $1.6 billion.

Jobs are in limbo as two receivers fish for buyers for the failed centres.

Receiver McGrathNicol has closed 55 centres and is continuing to operate the 720 most profitable. But 241 centres it deemed unviable are operating on $34million in taxpayer funds, and will close on April 1 unless they can be sold.

The federal Government wants buyers of the 241 failed centres to guarantee worker entitlements. Staff are unlikely to see any money unless the centres are sold, as the big banks are ahead of them in the queue. The ANZ, Westpac and Commonwealth banks are claiming $622 million between them.