This charge was created in June 2008, a short time before the heavily indebted childcare provider collapsed, and it put the banks at the front of the queue to receive their money back before other creditors.
ABC Learning had engaged in a rapid expansion in Australia and abroad using cheap debt but, as the global financial crisis hit and credit availability dried up, the company could not meet its large repayment burden.
No figure has been put on today’s settlement, but litigation funders Bentham IMF says the Federal Government will recover “millions of dollars” and both it and childcare workers should receive all of what they are owed.
The claims arose because of a move by banks to create a floating charge to protect their security for loans made to ABC Learning.
Read more here: ABC