I’m no expert on bankruptcy law, but this report about Moses Obeid strikes me as curious.
THE $16.6 million debt Moses Obeid’s company owed to the City of Sydney was wiped out yesterday after Obeid-friendly creditors voted to accept payment of 1¢ in the dollar in full satisfaction of their debts, most of which were small.
The report states that 13 small creditors of Obeid, including his sister Gemma Vrana, voted to accept a Deed of Company Arrangement (DOCA) of 1% in full settlement of the debt.
Meanwhile the large creditors, principally the City of Sydney, voted against the DOCA. With interest and Court costs, the debt owed by Obeid to the City of Sydney is $16.6 million.
The report states that the Council was joined in voting against the DOCA by Telstra, ANZ Bank and Abacus Property Group.
The total amount owed by Obeid is $17.5 million, so the amount owed to unsecured creditors other than the City of Sydney is $900,000 – I don’t know what is owed to Telstra, ANZ and Abacus.
Does this mean that a majority of creditors (by number) are able to force creditors (who are owed the largest amount of money) to settle for a small fraction of what they are owed?
If so, that is a bizarre outcome. If I owe Sinclair Davidson $10 million, and I owe $1 to my husband and another $1 to my sister, can we therefore force Sinclair to accept $100,000 in full payment of the debt?