Mr Bond said I was being a ‘fucking vindictive cunt’ and kicked a four-tiered tray off my desk. He said he would sue me and the newspaper … and would ensure I would lose my house in resulting legal action.
Bond threatening a creditor, January 19951
As Bond gained confidence that he would be released from bankruptcy, he became more cocksure. Just after the creditors’ meeting on 20 December 1994, he told the West Australian in a rare exclusive interview that he blamed Australia’s banks for the collapse of his business empire and Australia’s politicians for persecuting him since his demise. It was the usual yarn that failed tycoons and maverick ex-leaders like to spin—namely that it was someone else’s fault, that ordinary people still loved him and that his greatest concern was for his supporters, or in this case, his shareholders.
No doubt some people believed this stuff, and a huge number certainly still admired him for, as he put it, ‘staying to face the music’. Few realised that he had been given no choice about staying in Australia since April 1992, in that (unlike Skase) his passport had been confiscated on his return from London.
Bond also used his chat with the West Australian to repeat his tired old claim that Bollag was just a generous friend and to assure his fans that his health was still improving. ‘It just takes time,’ said Bond, ‘I was quite ill six months ago. I’m much better now, very much better.’2
Bond’s chances of escaping bankruptcy were also improving rapidly. By the middle of January 1995, the Arab Bank had been whipped into line with a combination of legal action and a $715,000 sweetener, and Jim Byrnes had supposedly found ‘up to five’ smaller creditors who were willing to sell their vote. If true, this was enough to guarantee Bond victory, and Ramsay would need a miracle to keep his investigations alive.
In late January, Bond’s trustee summoned him to Melbourne to answer questions about the documents that the police had seized from his house in Cottesloe. These provided tantalising glimpses of the deals that Alan had been pursuing with Tri Kal and the D’Jamirze brothers. Bond assured him that none had come to fruition, and that he had only been a consultant in any case. But when Ramsay asked about the movement of money into bank accounts in Zurich and about Alan’s promise to pay the D’Jamirzes $US3 million, the normally garrulous entrepreneur clammed up.
The police files, however, had strengthened Ramsay’s conviction that Bond was hiding money from his creditors and had made him even more determined to prove it. He was already seeking a second Federal Court order to make the AFP hand over material that they had seized from Bond’s friends and business partners, which consisted of another eight boxes and twenty Lever Arch files. And he now renewed his efforts to get hold of Joe Lieberfreund’s prized Swiss bank documents which had set the police on Bond’s trail in the first place.
Ramsay and the AFP had both been told in November 1993 that this evidence could only be used in connection with a prosecution of Laurie Connell, and this was likely to be the answer once more, but Ramsay knew that the documents were dynamite in that they disclosed the existence of a Swiss bank account held by ‘Bollag on behalf of Alan Bond’ that had contained ‘a substantial amount of money’ until 1989.3
It was obvious, too, that Western Australia’s Director of Public Prosecutions, John McKechnie, was busting to hand them over if he possibly could. Even though he initially refused to comply with a notice to surrender them, he turned up to the subsequent private hearing in Perth with the documents in two big boxes on a legal trolley. Afterwards, as his law clerk wheeled the barrow back up St George’s Terrace, McKechnie and Joe Lieberfreund walked beside them and allowed the West Australian’s photographer to snap the scene for the next day’s front page. Lieberfreund was even moved to tell a reporter that they wanted Ramsay to have them, and that they might well cause creditors to change their vote.
It’s extremely frustrating that we can’t release them. They are documents which could be relevant and could be crucial. Nobody wants to see justice done more than McKechnie.4
This was stirring stuff, but it was soon silenced. Lieberfreund was immediately phoned by Bond’s lawyer Steven Paterniti and told that he had better retract or he might find himself being sued. And sure enough, the next issue of the West Australian announced that he had made a ‘dramatic backflip’. Bond was also quoted on the paper’s front page, minimising the importance of the haul.
Quite frankly, any documents could be years and years old. They are untested documents. No one knows whether they’re real or factual. And for Lieberfreund to make these sorts of comments is totally unprofessional.5
Of course Lieberfreund had obtained the documents himself and knew exactly what they contained. And his profession was to catch people like Bond.
While this was all playing out in Perth, Bob Ramsay and his team had worked through the first set of police documents and written a new forty-two-page report to creditors, with a commentary on the deals they disclosed. The picture was hardly complete, but the millions of dollars flowing into Swiss bank accounts in mid-1994 had convinced him that he should tell creditors to vote ‘No’ to Bond’s offer.
By this time Bond had provided a draft version of the legal warranty Ramsay had demanded, in which he promised that he had disclosed all his assets. But his trustee was no longer interested in his assurances.
In the light of the material I have obtained in the form of the documents seized by the Australian Federal Police, the statements made to me by Mr Lieberfreund and the state of my own investigations to date, I cannot at this stage be satisfied that the warranty made by Mr Bond is correct. I believe on the evidence available to me it is likely that the bankrupt controls assets overseas. I therefore cannot recommend the proposed composition to creditors.6
Bond’s lawyer Steven Paterniti angrily told the press that there was nothing new in Ramsay’s latest analysis: ‘All he does is regurgitate all the stuff that everyone already knew before’. Soon afterwards, he sent a ten-page letter to Bond’s creditors marked ‘Urgent–Confidential’. This letter ridiculed Ramsay’s efforts thus far, telling them that the trustee had spent a fortune and made lots of allegations about offshore assets but had not ‘proved’ Alan owned a single dollar that had not been disclosed.7
The choice of the word ‘proved’ was particularly interesting, given that Paterniti’s former partner at Parker & Parker, Harry Lodge, had helped set up Bond’s Jersey trust companies in the early 1980s, and that two partners at Touche Ross in Jersey had testified these companies held millions of dollars for Alan Bond. But so was the attack on the value of this Jersey evidence, which Paterniti derided as ‘mostly speculative’. This seemed an odd way to describe Hatton-Edge’s and Davies’s sworn testimony to a Jersey court.
While Paterniti was going in to bat for his client, Bond was busy trying to ensure that he had the numbers for the next, and possibly last, creditors’ meeting, which was due to decide his fate on 31 January.
For several days the ebullient entrepreneur had been trying to get hold of Gerry Cavanagh, the credit controller at Western International Travel, who had been away on holiday. Now, with barely twenty-four hours to go until the scheduled vote, Alan marched into his twenty-eighth-floor office and demanded that Cavanagh vote for a settlement.
Cavanagh told Bond that the board of Western International Travel, which belonged to the group that published the West Australian, was not prepared to accept a compromise. The original debt had only amounted to $54,000 for first-class travel to the USA, West Indies and the UK, but the amount that Alan was now offering in settlement was more like $100, and this would not even cover the cost of the paperwork.
The refusal provoked an explosion. According to Cavanagh, Bond ‘became agitated’ and refused to leave the office unless he changed his vote to ‘Yes’. In Cavanagh’s words, he then ‘lost it’.
Mr Bond said I was being a ‘fucking vindictive cunt’ and kicked a four-tiered tray off my desk. He said he would sue me and the newspaper, claiming, ‘I will make you personally responsible’ for not voting for the composition, and [that he] would ensure I would lose my house in resulting legal action.8
Cavanagh had been in the business for more than twenty years and had seen debtors blow their stack in the past, but even he was shocked by this aggressive temper tantrum and decided to again ask Bond to leave. When Bond again refused, Cavanagh rang the security guards to have the irate entrepreneur removed. He then walked out of his office, pursued by an angry Bond asking him, ‘Why are you doing this to me?’. Some twenty minutes later, perhaps after a visit to his lawyers, a more composed Bond rang to apologise.
In contrast to all this torrid drama, the creditors’ meeting next day turned out to be a huge anticlimax. Once again, an army of cameramen and journalists gathered outside the venue, Sydney’s Masonic Centre, in anticipation of a result, and once again they trooped away disappointed. This time a technical hitch had arisen over the Dallhold settlement, and over Upp Hall in particular, and after much huddling and whispering in the concrete corridors the vote was adjourned for yet another month.
The new delay gave Ramsay another chance to obtain the AFP documents that he hoped would convince creditors it was worth continuing the chase. And some three weeks later, on Friday 24 February, Justice Ryan told the Federal Court in Melbourne that he would instruct the AFP to hand them over. Within minutes, the police were trucking the eight boxes and twenty Lever Arch files across Melbourne to the office of Victoria’s Official Receiver whose job it was to pass them on to Ramsay. For the next four hours, they sat there untouched while everyone held their breath to see if Bond would appeal the judgement. Then, as the clock ticked towards tea-time, Justice Ryan decided that the papers should be surrendered even if Bond did appeal, and the trolleys were duly wheeled down to the loading dock, to Ramsay’s waiting van.
Ramsay would have only the weekend to plough through this mountain of material before the final vote. Bond, meanwhile, was confidently telling the press that creditors had already made up their minds, and implying that victory was in the bag.
Late on Monday morning Ramsay held a council of war with his Committee of Inspection, which comprised most of the major creditors, and asked them for yet more time. He told them the documents had thrown up promising leads that he wanted to follow, and that he was now only weeks away from getting Bollag into the witness box in Switzerland and gaining access to Bond’s bank accounts. The appeal process in the Swiss Federal Court was almost exhausted, he told them, and he had been assured by his Swiss lawyer that Bollag could not win.
But his pleas found little support. Gavin Rezos from the Hongkong Bank summed up the mood by saying that they had spent enough on the chase and did not want to throw good money after bad. Ramsay had warned that the Swiss investigations could eat up another $1 million and take another two years to complete, and even though the bulk of the cost would be split between Tricontinental and the Commonwealth Government, no one apart from Lord and Ramsay seemed to have the stomach for the fight. They were tired of Bond and Byrnes and the whole damn shoot. Just as he had hoped, Bond had outlasted them.
With Bond’s major creditors determined to settle, it was inevitable that Bond would now be released from bankruptcy, and when it came to the full creditors’ meeting Ramsay did little more than go through the motions. He distributed his summary of the police documents which he said showed money transfers involving several million dollars. He stated his belief that Bond had not told him the truth when he denied that any deals had come off. But he did not make a passionate plea for Bond’s bankruptcy to be extended.
Before long, Jim Byrnes, as chief escape officer, was proposing the motion to accept Bond’s offer. Alan’s lawyer Steven Paterniti seconded it, and the creditors voted by a comfortable margin to accept $3.25 million in full payment of Bond’s $599 million worth of personal debts. There would be a down payment of $1 million followed by $750,000 a year for the next three years. After expenses, most creditors would receive around $1 for every $600 they were owed, or one-sixth of a cent in every dollar.9
The SULA banks had not cast their vote because Tricontinental and the Hongkong Bank had been unable to agree, but all the other major creditors had supported the deal, boosting the ‘Yes’ vote to eighty-eight per cent by value. Once again, the smaller creditors had been reluctant to let Bond off, so the split on numbers was a far less convincing thirteen to eight. The Australian Taxation Office had voted to keep Bond in bankruptcy, having belatedly assessed him for a whopping $21 million in unpaid income tax.10 Other, less cunning tax dodgers, no doubt, would have been thrown out of their homes for debts one-thousandth of the size.
Steven Paterniti had anticipated his client’s victory and was ready with a cheque for $1 million to cover Bond’s first instalment. Bob Ramsay held it up sheepishly for a creditor to photograph. He had worked ridiculously hard over the previous few weeks to keep Bond in bankruptcy and the strain had been getting to him. Now that the battle was over and the adrenalin had drained away, he suddenly looked exhausted and beaten. He would pack up his files, take up his golf clubs and contemplate whether or not to retire. Although frustrated and disappointed, he was also relieved. It had been far harder than anything he had done in his life before.11
Bond, for his part, looked like he’d won the America’s Cup all over again. After the formalities had been completed he emerged from the meeting with a split-melon smile to tell the media pack that he was happy to be free and to have the stain of bankruptcy expunged. Of course, he said, he would have much preferred for everyone to have got their money back, but it was entirely the fault of the banks that they had not. It was the banks’ impatience, he said, that had been the real problem for creditors, because if they hadn’t rushed to sell his Greenvale Nickel Project, and if Dallhold’s claim against the Queensland Government had succeeded, there would have been, ‘Enough money to satisfy all of the creditors in full, and leave a fifty per cent surplus. Everybody could have been paid 100 cents in the dollar’.12
This was not only untrue, it was also an absurd argument, in that the same reasoning would have elevated the hapless Warwick Fairfax to the most brilliant dealmaker of the twentieth century. Warwick had lost his family fortune by borrowing $2 billion to buy the Fairfax newspapers, yet seven years after the crash they were worth twice what he had paid for them. It would have also made Christopher Skase a genius, despite his huge personal and corporate collapse. And it would in fact have stopped Bond from buying Greenvale in the first place, because he had snapped it up when the previous owners had gone bust by paying out their bankers at just six cents in the dollar.13
As to Alan’s other suggestion that the banks who had lent him money had got it all back, this was also wrong, even if you didn’t count the interest that had been racking up since 1990. The sad fact was that the collapse of Bond’s businesses had caused his creditors and shareholders to lose almost $5 billion. But, like all expert salesmen, he never let the facts get in the way of a good story.14
As for the immediate future, Bond told journalists he would continue to work as a consultant. One wit writing to the Sydney Morning Herald later suggested he could offer his services to Barings Bank, which had just gone bust after losing $1 billion in derivatives. Another suggested psychiatry, so that he could ‘transform pathetic, forgetful, bumbling wrecks into bright, articulate, switched-on all-round good guys, and all with the wave of the creditors’ hand’.15
Over the next few days, newspapers, radio stations, TV and parliament all reverberated with the public’s outrage that Bond had been allowed to go free. Australia’s former chief corporate cop, Henry Bosch, described the decision to release Bond as disgraceful.16 The former chairman of the Australian Stock Exchange, Laurie Cox, said it would do nothing but harm to Australia in the eyes of the world. But as the acting Attorney General Duncan Kerr pointed out, it had been a commercial decision by the creditors to let him go. Meanwhile, he assured everyone that the Australian Federal Police were still investigating Bond for alleged offences against the Bankruptcy Act, and if assets were discovered criminal charges would certainly follow.
As the inevitable postmortem dragged on, Ramsay boasted that it would have been just a matter of time before the documents he was seeking in Switzerland had come into the public arena. ‘I was so damned close. That’s what rankles me. I was six weeks away at most, not from solving the whole mystery, but from getting inside the Swiss situation.’17 It was the lament of the vanquished. He had not laid his hands on a dollar of Bond’s offshore fortune. Nor had he looked like beating Bond and Bollag.
It was a suitable end to the pantomime that a final altruistic act by Alan’s generous friend had been needed to set Bond free. Bollag’s agreement to write off £400,000 that he was owed for expenses at Upp Hall had removed the last obstacle to a settlement.
This magnanimous gesture would allow the Bond family to live in Bollag’s, or should one say Bond’s, magnificent country mansion forevermore. And since the £400,000 Jurg had forgone was Alan’s money anyway, it had cost him nothing.