Disgraced ex-Labor minister Eddie Obeid and sons avoid bankruptcy

After failing in a lawsuit against the corruption watchdog, Eddie Obeid and three of his sons have finally paid the $5.25 million they owe.

Jailed former NSW Labor MP Eddie Obeid, 78, and his sons have avoided bankruptcy after paying $5.25m to the Independent Commission Against Corruption and six other creditors.

A creditor’s petition filed against the Obeids by ICAC and supporting creditors, including the State of NSW, was dismissed on Thursday by Federal Court Justice Kylie Downes with no orders made about costs after the money had been paid.

The payment means the Obeids have successfully avoided being bankrupted after a Federal Court order issued in September said they would face sequestration action if they failed to pay the money they owe ICAC and the supporting creditors.

This comes after ICAC filed Federal Court bankruptcy proceedings in January in an attempt to recoup $1.5m in legal fees from the Obeids. The petition alleged they refused to pay costs of $1,642,911.86 by November 2020 as ordered by the NSW Supreme Court.

Moses Obeid was also sentenced to jail for his role in a 2009 $30 million coal exploration deal. Picture: NCA NewsWire / Flavio Brancaleone

The Obeids were also ordered that year to pay ICAC and supporting creditors $5.07m in legal costs in relation to their failed 2015 lawsuit against former ICAC commissioner David Ipp QC, Sydney barrister Geoffrey Watson SC and two ICAC officers. They also failed to pay these legal costs.

Obeid launched the lawsuit against ICAC claiming he and his three sons had suffered financial and reputational harm after the corruption watchdog began investigations into a $30m coal deal that would grant Obeid a coal exploration licence on his family farm in Bylong Valley, NSW. The Obeids claimed they had been denied procedural fairness.

Supreme Court Justice David Hammerschlag dismissed the claim saying it had “no merit”, and the case against the commissioner bordered “on the eccentric”.

In a Federal Court order filed on September 29, the Obeids undertook that if they failed to pay a total of $5.25m to ICAC, the State of NSW and supporting creditors by October 28, sequestration orders would be filed against them. But by October 27, the petition was dismissed after the Obeids paid the amount owed.

While Obeid and his three sons have avoided being bankrupted, he continues to face charges for a separate ICAC investigation into infrastructure company Australian Water Holdings.

In October last year, Obeid was sentenced to a minimum three years, 10 months’ jail for conspiring to commit misconduct in public office over a 2009 mining exploration licence encompassing the farm he owned in Bylong Valley. Son Moses Obeid and former Labor MP Ian Macdonald were also sentenced to jail.