Morningstar on the brink of liquidation
Friday, November 23rd 2001, 8:55PMMorningstar Australia chief executive Graham Rich has challenged his dismissal by the group’s US parent, Morningstar Inc, in a move that could result in Morningstar Australia being placed into provisional liquidation.
In the NSW Supreme Court equity division on Friday Rich sought to amend an interlocutory injunction, already lodged with the Court in an attempt to block his dismissal, that would allow him to stay as chief executive even though it would result in Morningstar Australia being placed into voluntary liquidation.
A report into Morningstar Australia’s finances by accounting group Ferrier Hodgson released in the Court indicated the group would fall into provisional liquidation without an urgent injection of cash.
But Morningstar Inc announced to the Court that it was willing to inject more funds into Morningstar Australia only if Rich steps down as chief executive. However, Morningstar Inc did indicate it was prepared to rescue the group while keeping Rich on its board as a director.
Presiding over the case today Justice Barrett said he would grant leave to allow the amendments to be made to Rich’s interlocutory injunction.
Rich initially lodged the injunction after claiming Morningstar Inc, as majority shareholder, had acted in an “oppressive manner” by insisting on Rich’s dismissal.
Rich’s counsel, Robert Ellicott QC, alleged today that Morningstar Inc had acted in an oppressive manner by not giving Rich his legally-required 30 days notice for dismissal.
Ellicott also alleged that Morningstar Inc orchestrated Rich’s dismissal in a “mini” directors’ meeting where Rich and a number of other directors were not present.
The Court case is continuing.
Source: Money Management
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