The Ten Network’s employees have been “poisoned” by not being allowed to properly consider a competing bid to buy the struggling broadcaster, a court has heard.
The court action by media rich-listers Bruce Gordon and Lachlan Murdoch is attempting to overturn the decision to sell Ten out of receivership to US media giant CBS.
However, whether Mr Gordon and Mr Murdoch were the “disappointed under-bidders” or “disappointed over-bidders” became a point of argument early in the packed hearing before NSW Supreme Court judge Ashley Black.
The hearing also marked first time that Mr Murdoch — through his family-controlled Twenty First Century Fox business, rather than his private Illyria company — intervened, and joined the proceedings.
Ian Pike SC, for Fox, told the court Fox was questioning why it would only receive less than two cents in the dollar, unlike other creditors who received a full payout.
Gordon, Murdoch offered a 10% premium
However, the decision of Ten’s administrators KordaMentha to go with CBS as the preferred bidder was a “completely disingenuous proposal”, Andrew Bell SC argued on behalf of Mr Gordon’s companies.
Mr Gordon’s commercial interest involves two entities, his private investment business Birketu and the regional broadcaster WIN Corporation.
Dr Bell SC said Mr Gordon was a “disappointed over-bidder” given his joint bid with Mr Murdoch would have offered 10 per cent more to creditors.
“The administrators have unilaterally made a decision not to put the competing Birketu and Illyria proposals to creditors for a vote,” Dr Bell told the the court.
“This should immediately raise the interests of the court to be zealous to ensure full disclosure before the creditors meeting takes place.
“It is not reasonable to remove the decision from creditors of which vote to accept.
“Significant problems remain in the new disclosure (released yesterday by KordaMentha) and some of the earlier problems have been exacerbated.”
No substance to challenge: receivers
But Richard McHugh SC, acting for Ten’s administrators, had harsh words for Mr Gordon’s legal team.
“There is no substance in the Birketu and Illyria complaint,” Mr McHugh argued.
“The bid had conditions which made it less attractive and less certain.”
While Ten’s latest problems are contemporary, the network has faced many hurdles during its lifespan of little over 50 years.
He said the Gordon-Murdoch bid depended on changes to be made to Australia’s broadcasting laws, which still have not been made by the Federal Government.
In addition Mr McHugh argued creditors would be worse off under the Gordon-Murdoch bid, which is allegedly “not open for acceptance” because it was submitted after the August 25 deadline.
CBS’ barrister, Jason Potts SC, also appeared at the hearing.
He argued that Mr Gordon’s legal team had made some “extraordinary” and “unprecedented” propositions.
Earlier Mr Gordon’s legal team argued the value of CBS’s vote should be restricted to just $1.
Mr Potts SC said the complaint made by Messrs Gordon and Murdoch is one which involves “an ungrounded, unanchored notion of commercial fairness”.
Mr Potts argued that the court “would not find anything [to] justify blocking the vote of CBS, a major creditor”.
The hearing continues.
-with David Chau, ABC