The Australian Securities and Investments Commission is looking to close down Cinema City Mezzanine Pty Ltd, one of the 157 companies in the Westpoint Group.
Last Friday, ASIC commenced proceedings in the Federal Court of Australia also seeking an appointment of a liquidator to the company.
ASIC contends that the company is insolvent and that there are presently no directors to properly manage its affairs.
Cinema City, a company in the Westpoint group, raised approximately $2.5 million from 34 investors through the issue of promissory notes.
Those notes remain unpaid despite having become due for repayment in 2005.
Most of this money was made up of roll-overs from other Westpoint mezzanine investments and was not represented by funds credited to Cinema City’s account.
The Cinema City application will be heard on May 30, 2006.
Last Thursday, the Federal Court appointed individual receivers to seize individual assets owned in Australia and overseas by Westpoint directors – Norm Carey, Graeme Rundle, Richard Beck and John Dixon.
The individual receivers will have the power to enter into possession and take control of the individual properties. However, the Court has not extended the powers to sell, let or encumber the property without prior leave of the Court or the consent of the defendant whose property it is.
In addition, the Court has made a travel restraint order on Carey, Rundle, Beck and Dixon.
The Court adjourned the proceeding until October 03, 2006 and ordered the defendants to pay ASIC’s costs.
By Nelson Yap
