Timbercorp seeking to bankrupt Bundys

Illustration: Rod Clement

Timbercorp Finance is seeking the bankruptcy of Greg Bundy, the Silicon Valley-based former boss of Merrill Lynch Australia, and his wife Nicola.

The substituted service bankruptcy application was lodged by Mills Oakley Lawyers last month with the Federal Circuit Court registry. It comes 11 years after the collapse of the Timbercorp managed investment schemes following the global financial crisis.

The Bundys were among the more sophisticated investors who’d borrowed from Timbercorp Finance to fund their speculative tax minimisation investment in 2007. Thousands of investors in the collapsed plantation timber project subsequently joined a class action that failed at trial and then on appeal.

Margin Call isn’t aware of the amount alleged to be owing by the Bundys. But Timbercorp had 18,500 investors who invested more than $2bn across its 50 schemes, with Timberland Finance having 14,500 borrowers with a $50,000 average loan.

Many investors stopped making repayments on their loans after taking advice from lawyers running the class action. As a result, their indebtedness to Timbercorp Finance creditors, who include mum and dad convertible noteholders, trebled.

Craig Shepard, liquidator at KordaMentha, offered repayment terms at 85c in the dollar, along with hardship provisions.

The New Jersey-born Bundy, now based at Mountain View, California, quit Sydney in 2010 after selling his $7.25m Pymble estate, a Georgian-style residence on 5700 sqm with a tennis court and pool. The Pymble Ave property had cost $5,325,000 when bought in 2004 from Salmat chair Peter Mattick and his wife Pam.

Bundy spent over three decades in stockbroking and funds management, after getting into Yale University on a basketball scholarship.

Margin Call gleans he puts his money these days into the Hawaiian housing market.

Gender balance

An opportunity to tip the gender balance on the High Court comes later this year, with a new appointment to the seven justices. Justice Geoffrey Nettle vacates the bench in December, with his replacement to be chosen by the Attorney-General Christian Porter, who could consider it timely for a female bias. It is currently four wise men and three women.

Nettle was the oldest lawyer ever appointed to the court, taking office at the age of 64 in 2015, at the nomination of then Attorney-General George Brandis. Nettle’s age meant he could serve five years and 10 months, given the rather ageist piece of legislation, The Constitution Alteration Act 1977, which stipulates compulsory retirement at 70 years for judges appointed by the Commonwealth.

There will a further appointment needed early next year. While a gentlemen would never ask her age, Virginia Bell celebrates her milestone next March. She’s the second longest serving High Court member, having been appointed in 2009 by Robert McClelland.

Only the Chief Justice Susan Kiefel has been there longer, appointed in 2007 by Philip Ruddock.

After Bell departs, Patrick Keane will be the next to go in 2022. The Queenslander, nominated by Nicola Roxon in 2013, replaced the retiring Dyson Heydon, who has recently found a regular lunch partner in Sydney silk, Douglas Francis, as Heydon battles allegations that he sexually harassed six female associates. Francis’s most celebrated case was representing Madison Ashton, mistress of the late billionaire Richard Pratt.

The High Court’s youngest, Justice James Edelman — from Western Australia, which likely rules out any more from Porter’s home state — was appointed in 2017 aged 43. He was the youngest since Mary Gaudron, the first women justice, joined the court aged 44 in 1987 on the appointment of Lionel Bowen, and served until 2003. Edelman could remain until 2044.

Meanwhile on this July 4, Ruth Bader Ginsburg, appointed by president Bill Clinton to the US Supreme Court in 1993, recently turned 87, and continues her life tenure. Reckon her eventual replacement could be selected by the 46th president.

Shed a tear

Hold off those tax deductible donations for men’s sheds. The legislation which establishes a deductible gift recipient category for men’s and women’s sheds is yet to become law.

It’s been caught up in political argy bargy, and the paucity of parliamentary sitting days through the pandemic. Let’s call it an unfinished legislative project since it was March 2019 when Treasurer Josh Frydenberg announced the initiative, having been inspired when opening the North Balwyn men’s shed.

Frydenberg got another round of headlines as it was a proposal in the pre-election April 2019 federal budget. But he then let the task languish until it was introduced into the parliament in May this year.

While the proposal passed through the senate, pesky South Australian crossbench senator Rex Patrick successfully popped an amendment into the omnibus piece of tax legislation, to seek the scrapping of a
25-year-old rule that allows 1100 companies to avoid lodging annual accounts with ASIC. It was floated by ASIC as deserving implementation in 2015, with the lengthy delay triggering Patrick’s ire. The lower house seems unlikely to accept the bill as amended so no shed tax deductibility yet for the 1200 sheds across Australia. We will keep you posted.

ANZ taken to task

Using new whistleblower protection legislation that followed the banking royal commission last year, ANZ now faces another unfair dismissal case from its former high flying banker, Etienne Alexiou.

Alexiou, who was ANZ’s global head of balance sheet trading until 2015, claims he was dismissed after raising concerns about alleged interbank interest rate manipulation. Alexiou suggests he was a potential key witness in ASIC’s bank bill swap rate investigation.

ANZ ditched Alexiou in 2015 saying he allegedly engaged in lewd and explicit conversations on the company’s email and Bloomberg chat system.

“Such language was the common parlance,” Alexiou suggests, saying the bank hadn’t taken issue with his monitored chats for four years.

He’s called out the then ANZ boss Phil Chronican, now NAB chair, saying he attended a 2011 meeting where he says he raised his bill swap concerns.

“We will tell the regulator what to think,” was the alleged response from Chronican.

Alexiou initially took ANZ to court in 2016, but dropped the matter, citing stress on his family and the financial cost. Meanwhile Alexiou has wiped all trace of ANZ from his LinkedIn profile, which now starts in 2016 when he set up hedge fund Belay Capital.

Paradise heights

Having sold on Sunshine Beach to the former Prime Minister Kevin Rudd and his wife Therese Rein, restaurateur David Hales and wife Louise have bought back big time into the hot Noosa market.

After pocketing $17m, they have bought two neighbouring properties on Noosa Sound costing $5m and $7.25m. The dearer of the homes on the 1300 sqm Noosa River holding was inspired by Ralph Lauren’s Caribbean retreat. The couple also retain 19 hectares in the hinterland.

The Hobart-born Hales, who recently quit the board of Betty’s Burgers which he founded in 2014, has recently acquired Tavern 42 Degrees South, a bar on the Hobart waterfront.

The Rudd-Rein power couple will be upgrading from nearby Castaways Beach where they bought for $3.1m in 2010. Their latest acquisition was the John Burgess-designed home built by tennis legend Pat Rafter and wife, Lara.