Australia's richest garbo, Ian Malouf, might be suing the NSW government for $414 million over the compulsory acquisition of his landfill and recycling sites in the way of the under-construction WestConnex motorway (the state's Valuer-General would only give him $70 million), but as he knows better than most, litigation is a most dangerous hobby.
In the NSW Supreme Court on Friday, Justice Paul Brereton ruled against Malouf's company Alexandria Landfill (ALF), the holding company of the Dial-A-Dump empire. In short, Malouf had sold preferential notes (with a guaranteed 11 per cent cash distribution against their subscription) in Dial-A-Dump to external shareholders, 53.2 per cent of which were taken up by retail billionaire Brett Blundy; Malouf remained the sole ordinary shareholder.
Yet on November 28, 2014, as sole director of ALF, Malouf declared a $24 million dividend to ordinary shareholders (read: himself), an amount of cash the company had no capacity to pay and while pref unit holders await their 11 per cent coupon entitlement. Nice try! Justice Brereton found the resolution to be void and that (subject to argument) Malouf must pay Blundy's legal costs.
With the Land and Environment Court still holding out on the $413 million, who knows how badly Malouf needed that $24 million. Judging by its promotional video (we doubt the bikini-clad hardbodies are included in the charter fee), and given the fact Malouf spends a large amount of his time floating on the Mediterranean, the upkeep on his $40 million, 53-metre yacht Mischief can't be cheap.
