An ostentatious Indian billionaire exiled to Dubai is not the stuff of public sympathy. Yet the story of Pankaj Oswal is enough to show that something is seriously wrong with the system.
Even by the highly debauched standards of Australian insolvency practice, there has rarely been such a Saturnalian fee-fest as the receivership of Pankaj Oswal's Burrup Fertilisers.
There were no holds barred. In just 14 months from the time the ANZ bank pulled the pin, the great fee hunters managed to clean out $56 million.
PPB and Freehills alone helped themselves to almost $19 million and $13.8 million respectively. Nine law firms, a slew of consultants and the ubiquitous ''assurance'' firms were there for the kill, too.
The bill for travel and accommodation surpassed $2 million. Flagstaff Partners, a little-known merchant bank with links to ANZ, took home $6.8 million for providing advice. Who said talk was cheap?
If there were three sectors most often upbraided in recent times for their very high fees - the electricity networks, the liquidators and the lawyers - it is no coincidence that all three have the pleasure of setting their own fees.
When you see two of these working in tandem, the result is blistering blow-outs in fees. In the case of Burrup these turbo-charged paper-shufflers were ripping out $4 million a month, almost $1 million a week.
In the aftermath of the receivership, the Burrup plant still produces ammonia, people still go to work there, yet the suite of lawsuits and damages claims linger. And the recriminations will clog the courts for years to come, at great taxpayer expense.
It is through these that we may begin to see whether ANZ and PPB played by the rules, and whether the Indian entrepreneur deserved to lose control of his empire.
At one time Pankaj Oswal's Burrup facility employed 500 people - it still has 100 on the books. It is one of the world's largest ammonia plants, a creation that turned Australia from a net importer of ammonia into a net exporter.
The plant was commissioned in June 2006.
In December 2009, ANZ's $900 million in loans to Burrup were guaranteed by Pankaj and his wife Radhika's shares.
The bank appointed PPB as receivers to Burrup in December 2010 amid claims that Pankaj had made improper payments to himself.
The shareholders were Pankaj (30 per cent), Radhika (35 per cent) and the Norwegian ammonia group Yara International (35 per cent).
Oswal and Radhika's shares were sold to Apache Corp and Yara in January this year and, upon the repayment of the debt to the ANZ, the receivership came to an end.
The three central pieces of litigation that remain on foot are: Pankaj's application for an inquiry into the appointment of the receiver, Pankaj's damages claim arising from the sale of the Burrup plant in January and Burrup's claim for breach of directors' duties against Pankaj.
Radhika has proceedings in train too, as does the Tax Office with its suit against the Oswals arising from claims made by ANZ.
The key to Burrup's early success was its Gas Supply Agreement (GSA), which Pankaj had struck at a low price with the joint venturers Tap Oil, Kufpec and Apache. Despite Pankaj raising his concerns with PPB, the lawyers and receivers still permitted the GSA to be part of the document room in the sale process.
The upshot was that the cheap gas deal became common knowledge and the value of Burrup fell.
So Pankaj sued the receivers for breach of confidence. He claims the new GSA was struck at a far higher supply price as a result of the disclosure.
That the Oswals' shareholding was sold to Apache and Yara (Apache had bought out Tap and Kufpec and stood to gain from a higher-priced GSA) is part of the claim.
Then there is the peculiar matter of PPB not paying down the ANZ debt sooner but rather allowing the interest bills to rack up. Burrup was still sitting on $140 million in cash at the time of its sale.
Which brings us to the sale process itself.
Even though the obvious buyers were already on the scene, a boutique Melbourne outfit with scant experience in ammonia-type fertilisers was commissioned by ANZ to oversee the sale.
Flagstaff, which charged $6.76 million for its services, counts as its chairman Charles Goode, who was formerly chairman of the ANZ.
In the end, the Oswals' shares were offloaded for just $580 million - a sum that equates to the principal owed to ANZ plus interest. PPB and Freehills got their bonuses and kept $20 million for contingencies such as the funding of the directors' duties claims.
Freehills has already foreshadowed that there may be nothing left for the Oswals - the people who built the company, employed 500 people and owned 65 per cent of the shares.
To get an idea of the true value of the plant, though, Yara acquired an additional 5 per cent in September 2008 for $141 million.
At the pinnacle of the financial meltdown then, a knowledgeable global competitor had priced the plant at $2.8 billion.
Then, in March 2010, Pankaj Oswal claims he received two approaches for his shares at prices that valued Burrup at $2 billion: one from Wesfarmers and the other from Incitec Pivot.
If it is the case that Burrup could have been sold to either of these parties, or both, the question should be asked as to why it was sold for half the price to Apache.
In a black-letter legal sense in the saga of Burrup the sheer velocity of the fees is a disgrace.
ANZ was sent questions for this story. It did not respond.
PPB said it was a highly complex insolvency, hence the fees.
- Sydney Morning Herald