Inside the bitter $30m court dispute rocking billionaire Raphael Geminder's Pact Group
A bitter four-year dispute over $30m has reached court, with billionaire Raphael Geminder’s legal team going head-to-head with Melbourne men David Harris and Mark Gandur.
Billionaire Raphael “Ruffy” Geminder’s lawyers say a coat hanger business acquired by his Pact Group bombed during the early days of the Covid-19 pandemic and its financial misfortune was the reason the target’s vendors did not pocket a $30m earn-out fee.
Opening arguments in a bitter four-year dispute related to the performance of Melbourne men David Harris and Mark Gandur’s business TIC in the 2019 and 2020 financial years kicked off in the Victorian Supreme Court on Monday.
Mr Harris and Mr Gandur dispute Mr Geminder’s case, which seeks a declaration from the court that no earn-out was payable after the 2018 deal to buy their plastic garment hangers and accessories business. Both men were observed in court and are defending the matter.
Mr Geminder was not present, although he is expected to give evidence as a witness later in the week. He is married to Fiona Geminder, daughter of the late Richard Pratt, and worth about $1.09bn according to The Australian’s Richest 250.
Pact Group is listed, but Mr Geminder’s attempts to take it private have been thwarted by Mr Harris and Mr Gandur in another arm of their ugly feud.
At stake is a $30m pay day from Pact to Mr Harris and Mr Gandur which, according to their contract, could be triggered if the acquisition hit earning before interest, tax, depreciation and amortisation worth $19,400,000 for the fiscal year to June 30, 2019 or June 30, 2020.
Court documents showed Pact tried to block the vendors from collecting the $30m and countered that they are owed zero.
Barrister for Pact Group Nicholas Hopkins told the court on Monday TIC’s EBITDA was about $10.8m in the 2019 financial year, and about $12.3m in the 2020 financial year. Following adjustments agreed to by Pact, the court heard the 2020 EBITDA was revised up to $17.6m, but still fell short of the trigger.
“One can infer from the earn out threshold, that was a figure the parties considered reasonable performance,” Mr Hopkins said. “We say the reason no earn out was forthcoming was because the business did not perform anywhere near expectations of buyers or sellers,” he said.
TIC also allege Pact Group deferred about $8m of orders made in June 2020 to the following financial year. It claims those orders are worth about $5.1m in income that should have formed part of the EBITDA for the 2020 financial year.
Mr Hopkins rejected that allegation, saying “that conduct did not occur” and there was “no strategy to defer revenue”.
The court heard TIC noted the pandemic also impacted its revenue.
Mr Hopkins said the poor result was “not surprising” given the business, which supplies new and reusable garment hangers and security tags to retailers including Target and Kmart in Australia, was attempting to hit the earn out threshold during periods of lockdown or when physical shopping was limited.
“Fairly heavy criticism” was levelled at Pact by Mr Harris and Mr Gandur, who alleged Mr Geminder’s group did not “properly” cooperate and provide information to TIC to allow it to review earn out statements when disputes started to arise.
TIC allege Pact breached its contract by failing to cooperate with requests for information, and TIC “denied the character of earn out statement because it did not include all the information TIC requested over period of six months”.
Mr Hopkins rejected that, and said to the extent the information existed it was provided to TIC. “(It is) evident that Pact had engaged constructively and promptly for further request information,” he said.
As well, Mr Hopkins said TIC have “clung to the position this ought to have been referred to an independent accountant”, but Pact denies that allegation saying it was not possible on technical arguments.
TIC sent formal notices to Pact claiming its nil assessment was wrong, and disputed. TIC has also counter sued Pact, seeking its $30m, and alleging Pact breached their contractual arrangement.
The case continues.
Pact on Friday revealed softer trading for the first five months of the 2026 financial year, up to November 30. It showed Pact’s unaudited revenue was down 7.2 per cent on the prior comparable period, to $726.8m. Underlying earnings were down 28.8 per cent to $42.1m.
Pact, which has operations across Australia, New Zealand and Asia, manufactures packaging for beverages, health, personal care, household items and food. It blamed tougher economic conditions for the deteriorating sales and profitability.
It said total group net debt for the first five months of fiscal 2026 had increased by 10.3 per cent to $608.5m due to its ongoing capital asset program and the acquisition of Linpac Packaging Australia from Klöckner Pentaplast for $8m in October.
