The Commonwealth Bank of Australia (CBA) has entered preliminary talks with the voluntary administrators of Storm Financial to “discuss a way forward”, a spokesperson for the bank said this morning.
Storm Financial has entered voluntary administration in the wake of the Commonwealth Bank of Australia (CBA) demanding the beleaguered financial planning group repay its corporate debt facilities.
A statement from the Townsville-based group said it had “no choice” but to enter administration after CBA demanded full payment of corporate debt facilities. Storm Financial said the bank gave them a one-day notice period to repay its debt.
“On 8 January we received a demand from CBA for full payment of the corporate debt facilities Storm held with them on or before 9 January 2009, a notice period of only one day. We were unable to raise the funds in such a short time period, and as a result, the directors of Storm Financial have been forced to appoint administrators,” Storm Financial joint managing director Emmanuel Cassimatis said.
But CBA has rebuffed the claims made by Cassimatis, saying the bank issued notices to Storm for repayment of part of its corporate debt on December 31 last year, after Storm failed to meet obligations in regard to its debt facilities with the bank.
In a statement made yesterday, Cassimatis blames CBA for the company’s entry into administration, saying the group was “forced to this action” due to “CBA’s extremely aggressive demand”.
The administrators — Raj Khatri and Ivor Worrell of Worrells Solvency and Forensic Accountants — have said their appointment is a result of “the insolvency of the company consequent upon the withdrawal of support by the company’s bankers, and other factors”.
A CBA spokesperson said “the appointment of voluntary administrators was made by the board of Storm Financial”, adding that CBA has had preliminary talks with the voluntary administrator to “discuss a way forward”.
Cassimatis said his personal losses, and those of his wife and joint managing director, Julie Cassimatis, “are of little consequence to us at this stage”, and that the interests of clients are front of mind.
Cassimatis said the group is now working with the administrators on a proposal to assist clients, saying he hoped an “equitable outcome” could be achieved for all stakeholders.
In late December, Storm issued legal proceedings against CBA in connection with margin loans from the CBA group. That matter is to come before courts in Brisbane this week.
