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MFS is for all practical purposes a private equity investor that has had a major interest in aged care. It illustrates a ruthless brutality and a callous disregard for the interests and well being of those for whom it is responsible. We have seen this in the USA where private equity groups have restructured their companies so that they are no longer held liable for mistreating their charges. Families of residents are powerless to protect their loved ones.
We should not see these operators as inherently evil. This is the world they live in. They simply do not see that what they do and think is wrong. This is simply the way things are for them.
MFS became an owner of retirement villages for elderly pensioners. These were leased to Village Life in which MSF had a 19% holding. The business model was fatally flawed and in 2007 there was a vicious dispute between MFS and Village Life as both tried to find a way out. In the process hundreds of frail and elderly pensioners were issued eviction notices and many left before the effort was squashed by the community's reaction. It is likely that neither company expected the savage backlash from the community. This was "just business".
MFS acquired a dominant interest in Domain Aged Care, an operator of nursing homes. When its other investments in property collapsed in the 2008 downturn it was in trouble. It responded by selling off assets including Domain Aged Care which went to AMP's Principal Health Care.
A close examination of Domain Aged Care and the purchase by Principal is worth while because of what it reveals, not only about private equity thinking, its consequences for staffing and care, but also about the thinking, the staffing and the operation of government agencies.
This becomes apparent when statements on its web site, statements by AMP, Domain's nursing policies, and descriptions of the situation in one of its nursing homes are set against one another.
MFS is a financial investment group based on the Gold Coast in Queensland. It has invested extensively in the aged care sector. It also invested in ski resorts, hotels and other properties. By the end of 2006 MFS had close links with Babcock and Brown’s retirement business PrimeLife, had invested in 19% of Village Life (see for details) and bought Westpac's Village Life Property trust which owned 23 retirement facilities leased to Village Life.
Bullish Gold Coast funds manager MFS emerged as the mystery purchaser of Village Life shares on Thursday and is understood to have an appetite for more stock in the company.
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MFS has been on an aggressive growth path in the past year. It included the creation of a golf industry investment fund and an earlier takeover of listed management group BreakFree.
Village Life brightens as MFS moves in Australian Financial Review January 14, 2006
THE Southport-based MFS Diversified Group has beefed up its presence in the retirement sector, snapping up 10 retirement villages from Westpac's Village Life Property Trust for nearly $55 million.
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The portfolio that MFS Diversified is buying from the Village Life Property Trust is to include 10 Village Life villages and 13 managers' units.
MFS swoops on villages The Gold Coast Bulletin May 3, 2006
Seventy percent of Guardian Group, an owner of retirement villages, was owned by Villa World. When MSF acquired Villa World in 2006 it sold off its holding in Guardian.
Aug 2006 Merger with troubled Villa World
WITH its operating profit dropping almost 20 per cent to $23.49 million, betrothed builder/developer Villa World is counting down the days to its corporate coupling with power partner MFS.
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He said aged-care operator Guardian Group, in which Villa World holds a 70 per cent interest, had a successful year. "Land has been secured for a 120-bed aged-care facility on the Gold Coast and this facility is expected to become operational in 2008," he said. "At the completion of this current phase of development . . . Guardian proposes to have a total of 675 beds under operation by the end of 2008."
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Mr Hailey said the group looked forward to the completion of its merger with Southport-based MFS Diversified, which last week announced a profit increase of more than 300 per cent. "The merged group will have operations across property investment, residential communities development and aged care," he said.
Villa World looks forward to its MFS wedding The Gold Coast Bulletin August 29, 2006
Dec 2006 MFS sells Villa World's Guardian Aged Care
MFS Diversified Group (ASX code: MFT) has sold its holding in the Guardian Aged Care Group to interests associated with its joint venture partner, Mr Bill Summers, for about $15 million.
MFS Diversified sells interest in Guardian Aged Care Ralph Wragg Australian Business News December 29, 2006
Dec 2006 Still helping Guardian.
The company has offloaded its 50 per cent stake in the (Guardian) group to its joint venture partner Bill Summers for about $15 million.
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Mr Hailey said MFS Diversified planned to undertake construction of two new facilities for Guardian at Browns Plains, in Logan City, and at Lake Street in Varsity Lakes. He also said MFS Diversified was committed to the development, management and construction of future projects for Guardian.
MFS sells aged care stake and pockets $12m The Gold Coast Bulletin December 30, 2006
MFS and Village Life were involved in what must be one of the most brutal and callous corporate disputes in the history of Australian Aged Care. This was at the expense of hundreds of 70 to 90 year old residents - residents, many of them pensioners from the most underprivileged sector of our society. They were issued with eviction notices from what was now their homes - homes they had been enticed into by Village Life's marketing. Many of them had already left when it was determined that the eviction notices were illegal. The mental anguish for this group of citizens was extreme.
After an outcry across the country, with extensive press coverage, with the involvement of politicians, consumer affairs and the office of fair trading, a compromise was finally reached and the remaining residents stayed.
A large part of the fault seems to lie with MFS who owned the villages which Village Life managed under contract. Village Life was in dire straights and about to go under. MFS had blocked a rescue takeover and then, it seems, not been willing to join Village Life in contracting the group, whose takeover MFS had blocked, to manage the villages MFS owned.
In September 2006 Michael Gordon's Sunnycove (renamed SCV Group) launched a takeover bid for Village Life. MFS refused to sell and blocked the bid.
RETIREMENT home operator SunnyCove formally launched its takeover bid for fellow retirement village operator Village Life yesterday, with still no word from MFS Diversified on its intentions.
Oct 2006 Sunnycove takeover bid
SunnyCove makes bid for Village Life The Gold Coast Bulletin October 20, 2006
Nov 2006 MFS blocks takeover
A KEY player in the battle for the retirement sector yesterday rejected a takeover offer for the struggling Village Life.
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The move stalls Sunshine Coast-based SunnyCove's bid, which was conditional on 90 per cent acceptance from Village shareholders.
Key player blocks takeover offer for Village Life The Courier-Mail November 25, 2006
Village life now sold the
management of all the villages except those owned by MFS to SCV Group (the
renamed Sunnycove). It seems likely that MFS,
which had been expected to launch a counter bid had not been prepared to participate
in this contract and was still playing market games to be able to make a lower
takeover bid. Village Life terminated
its agreement to operate MFS facilities giving 3 months notice to MFS.
MFS did
not want to operate these money losing facilities and insisted that they be
empty when handed over.
SCV, after a $29 million-scrip takeover offer last year for Brisbane-based Village, is offering $14 million for management rights for more than 4000 units. Village auditors in half-year results out yesterday warned it was likely to "be placed into administration" if this and other deals did not proceed.
Mar 2007 SCV offers to manage
Retirement home base The Courier-Mail March 1, 2007
Mar 2007 Village sells management to SCV but not of MFS owned villages.
Having reported a $2.9 million half-year loss and a 48 per cent fall in revenue, retirement village operator Village Life has staved off collapse with the $14 million sale of its management rights to competitor SCV Group - which last year failed in a takeover bid for Village Life. Village Life said it may be forced into administration if shareholders did not approve the sale.
The agreement gives SCV management rights over 78 villages owned by strata investors, wholesale syndicates and the ING Community Living Fund. Village Life also said it would terminate its lease agreements for 10 villages owned by MFS Diversified Group.
Village Life hopes to take semi-retirement Australian Financial Review March 1, 2007
Mar 2007 ING joins the party
Sunshine Coast-based SCV said ING Community Living, which owns some of the villages, had agreed to Village handing over management rights.
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ING also plans to take part in an SCV fundraising, understood to be more than $10 million. It will also take a board position and hold about 10 per cent of SCV, which might have a market cap of more than $30 million.
Village Life gets an offer The Courier-Mail March 22, 2007
Village Life had decided to abandon managing retirement villages and return to simply building them. It sent out eviction notices to the 400 low income elderly residents in these 10 MFS owned retirement complexes across Australia. Its business model which aimed to make huge profits from their pensions had failed dismally.
It is not clear what the legal situation was but I would suggest that MFS had a moral obligation to pay another operator to manage the homes and accept the market rate for this. The separation of owner from manager was intended to protect the business and the residents from a failed operator. Another manager could be contracted.
The business model was flawed and the facilities were designed for this model. Not surprisingly there were few interested in managing them. This was one of the risks of the business when they bought from Westpac and they had to accept the losses. They were doing well in other sectors and were obliged to carry the financial burden.
The question of course is what on earth were these private equity people doing operating in the charitable aged care service anyway. Private equity was about making money for their owners, not caring for the suffering and misfortunes of mankind. Alison Caldwell put that question to the CEO of MFS on ABC TV. He had no answer.
The ruthlessness of the marketplace and the fate of residents when they are caught up in corporate battles where large sums are at stake is well illustrated by MFS' conduct. As in the dispute between BUPA and Healthscope residents became the meat in the sandwich.
MFS would probably have seen nothing wrong in telling large numbers of frail elderly nearing the ends of their lives that they were to be ejected from their homes. We have seen this before in Australia and the USA.
Private Equity operators live in a ruthless world of their own, well separated from events at the bedside. It is not surprising that people with empathy and social conscience are not represented. These managers would have seen this as "just business" and were probably caught unawares by the publicity and savage public backlash. That would impact on their business and share price. The two groups responded by trying to blame each other for the residents misfortune. They both let it happen and are morally culpable.
Press extracts illustrate the story.
Apr 2007 --- 400 to be evicted
More than 400 elderly residents are facing eviction from their homes after the takeover of 10 retirement villages across the country.
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Village Life says it has been told all the residents in the 10 villages must be out by the end of May, because the MFS Group wants the buildings empty
The affected retirement villages are: Dubbo, Wagga Wagga, Tamworth and Bathurst in regional New South Wales; Mandura in Western Australia; Shepparton, Mildura, Warrnambool and Ballarat in Victoria, and Launceston in northern Tasmania.
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"MFS has explicitly requested of Village Life that on the termination of leases they be handed over as vacant leases."
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Mr White says MFS Group never intended to run the villages, and it is up to Village Life to find homes for the tenants.
Retirement village residents face eviction after takeover Australian Broadcasting Corporation (ABC) News April 16, 2007
Apr 2007 MFS blames Village Life
MFS Diversified Group says Village must fulfil its obligations to residents of 10 MFS-owned properties in four states after it terminated its leases over the properties. MFS said that an investor and owner of real estate it does not have the licences, staff, systems or infrastructure required to operate a retirement village.
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MFS said the situation was causing "undue stress and uncertainty" for residents, relatives and staff of the villages.
MFS calls on Village Life to resolve fate of residents Australian Associated Press Financial News Wire April 17, 2007
Apr 2007 ABC interviewer challenges MFS
Residents in these homes, some aged in their nineties, have received letters telling them that they must move out by May the 28th. One aged care group says it's a crisis for these people who are mainly low-income pensioners with nowhere else to go.
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KIM BOOTH (Tasmanian Greens MP ): There's a lot of callous and horrible things that happen in the world, and I'd say that this is just another example of what happens when governments don't properly protect their citizens from the avarice of businesses such as the owners of this particular complex, who are intending to just throw these people out onto the streets in their twilight years, simply concerned about the money and not interested in the lives that they're going to ruin.
ALISON CALDWELL: The residents concerned are aged between 70 and 97. They have no assets and no super, and pay 85 per cent of their pensions each week to rent a bed and be fed three times a day in what is essentially an aged care hostel.
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CRAIG WHITE (CEO of MFS Diversified): We didn't expect them (Village Life) to think that they could just abrogate their responsibilities to their clients and the residents of these villages and just put their hands up and walk away. That is just something that is absolutely reprehensible.
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ALISON CALDWELL: There's probably a good reason why investment groups, property groups, shouldn't have anything to do with running retirement villages. Why are you getting involved in them in the first place? Just because they can make money for you?
CRAIG WHITE: Um, look, we're not in the business of running retirement villages. That's exactly the point.
ALISON CALDWELL: Why do you have anything to do with retirement villages?
CRAIG WHITE: Because there's, there's groups out there who want to lease those properties and provide accommodation for people.
Retirement village residents sent eviction notices Alison Caldwell Australian Broadcasting Corporation Transcripts April 17, 2007
Apr 2007 Village Life denies responsibility
Mandurah home Village Life says it's terminated the leases of 10 retirement homes around Australia including one in Sticks Boulevard, Mandurah because conditions imposed by the owners, the property investment group MFS Diversified, are too onerous.
Village Life spokesman Geoff Breusch says the future for residents is unclear.
The thing we would like to see happen for them is that they remain right where they are, unfortunately that's not entirely up to us because we don't own the facility and we have terminated the lease," Mr Breusch said.
Fears of pensioner evictions Australian Broadcasting Corporation (ABC) News April 17, 2007
Apr 2007 Dubbo and Bathurst
Thirty-five residents of a retirement village in Dubbo and some in Bathurst are among hundreds facing eviction after the takeover of 10 villages in Australia.
Retirement village sale affects residents in Dubbo, Bathurst Australian Broadcasting Corporation (ABC) News April 17, 2007
Apr 2007 Office of Fair Trading
NSW Fair Trading Minister Linda Burney said her primary concern was the welfare of residents affected by the proposed closures of the retirement homes.
The Office of Fair Trading would explore all avenues to assist in resolving the matter, she said.
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"The Office of Fair Trading is working to determine the nature of the agreement between the parties and establish what plans are in place to ensure the welfare of residents."
MFS calls on Village Life to resolve fate of residents Australian Associated Press Financial News Wire April 17, 2007
Apr 2007 The plight of residents - MFS shifts blame
A "HEARTLESS" corporate battle threatens to pitch more than 400 elderly Australians out of their nursing homes within weeks.
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Avis Murdoch, 86 -- who moved to Village Life in Ballarat almost four years ago after her husband, Alex, died -- said many residents were upset by the dispute.
" I don't feel like panicking about it but its certainly very stressful. I think there were 45 people who didn't get any sleep last night," she said.
" We wouldn't have been at all surprised if there were a stream of ambulances here picking up heart cases."
Mrs Murdoch said she had not decided what she would do but could not understand why the new owners wanted the units vacated. "Why would people want 50 empty units sitting there?" she said. "It's completely heartless."
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" It's reprehensible for Village Life to put these poor elderly retirees in such a precarious situation," MFS's managing director Craig White said.
" The retirees are the clients of Village Life. They have accepted legal responsibility to provide the elderly with living accommodation for a fee."
Mr White said MFS had a moral responsibility and the company was considering ways to solve the issue.
Village Life, in which fallen aged care minister Santo Santoro had a minor financial interest, decided to pull out of the 10 retirement homes after suffering losses of $231,000 in six months, saying yesterday it would be financial suicide to keep the centres open.
Elderly face eviction in corporate stoush The Australian April 18, 2007
Apr 2007 Consumer Affairs
Consumer Affairs Victoria is looking into whether the residents can be legally evicted.
Craig White from MFS says it has met Consumer Affairs and state and federal politicians to try to find a solution.
Push on to find alternative housing for retirement village residents Australian Broadcasting Corporation (ABC) News April 18, 2007
Apr 2007 Many have already left but evictions were illegal
Almost half of a group of 41 elderly residents facing eviction from a retirement village in Ballarat have found new homes.
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But the manager of the Sebastopol complex in Ballarat, Jenny Couch, says the evictions may not be legal. "We then had a ring from the Aged Care Minister's secretary and she is saying that it's illegal, they can't do what they're doing, and the problem will be looked at and hopefully resolved - but it's too late now to go back and undo the harm that's been done here," she said.
Ballarat retirement village residents find new homes Australian Broadcasting Corporation (ABC) News April 18, 2007
Apr 2007 Legal confusion - Is wealthy MFS ducking its moral responsibility?
There are fears that a clause in the contract would mean the residents are not covered under the Retirement Village Act and could be forced to leave their homes after the new property owners, investment company MFS, gave Village Life notice to vacate.
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Denise Ferguson, whose parents are in the Wagga Wagga facility, says none of the residents have a lease agreement with Village Life.
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"He probably won't sleep tonight, I know he won't and Mum starts to talk a lot when she's nervous. I mean, I think the whole complex must be beside themselves," she said.
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Ms Burney (NSW Fair Trading Ministe) says she has asked the Office of Fair Trading (OFT) to explore all possible avenues to help resolve the matter and ensure residents' rights are protected.
State Member for Tamworth, Peter Draper says he has been told by the Minister that the 50 residents should be protected under State Government legislation.
Mr Draper says he hopes common sense will prevail and the rights of the residents will be considered in the final outcome."This is a disgraceful situation. We have a major company here which has got a substantial portfolio, large investments, but no consideration for the impacts on local elderly residents," he said.
Planned nursing home evictions 'heartless' Australian Broadcasting Corporation (ABC) News April 18, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/1912-planned-nursing-home-evictions-heartless
Apr 2007 The law but confusion remains
Consumer Affairs Victoria says the eviction notice; notices issued by the operator, Village Life are illegal.
Last night the company's operations manager said Village Life was considering extending some of its lease arrangements.
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DAVID COUSINS (Consumer Affairs Victoria ): They certainly haven't been valid notices to vacate their units at this time and so there is no reason for them to think of moving.
ALISON CALDWELL: Consumer Affairs will fight moves to force the residents from their homes.
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Debbie Buckle runs the retirement village there. While the notices mightn't be legal, she says by the end of May no one will be there to look after the residents.
Retirement village residents facing eviction may get to stay Retirement eviction notices illegal: consumer affairs Australian Broadcasting Corporation Transcripts April 19, 2007
Apr 2007 AMA joins the protest
The Australian Medical Association (AMA) wants state and federal governments to intervene in the case of the sale of the Village Life retirement centres in four states.
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The AMA's Victorian president Doctor Mark Yates says doctors are very worried about the evictions. He says the move could force many of the residents into hospital emergency departments until other supported accommodation is found.
" It seems very thoughtless and inhumane to evict a population of older people like this purely for financial reasons," he said.
" It really is desperately needed that both the Victorian and the Commonwealth Governments get involved here to somehow enforce a stay of this eviction until the financial situation is clear."
AMA calls for govt to intervene in Village Life case Retirement eviction notices illegal: consumer affairs Australian Broadcasting Corporation (ABC) News April 19, 2007
Apr 2007 MFS capitulates
Elderly residents at the Erskine Grove retirement village in Mandurah will remain, with Queensland-based MFS Diversified Group signing management of the facilities over to Queensland-based SCV Group Ltd, also known as Sunny Cove.
Eskine Grove retirees stay put after management deal signed WA Business News April 19, 2007
Apr 2007 NSW steps in
The state government stepped in today to prevent the eviction of residents in four NSW retirement villages by finding a new operator, SCV Group.
Oppn calls for urgent review of retirement villages Australian Associated Press Financial News Wire April 19, 2007
Apr 2007 Arrangement reached
SCV GROUP LIMITED (ASX Code: SCV) and MFS Diversified Group (MFT) have agreed that SCV will manage the 10 seniors communities owned by MFT and currently leased by MFT to Village Life Limited (VLL). The parties will now move to the formal documentation of a 25 year term management agreement between SCV and MFT with annual performance reviews.
In addition, today MFT have announced that they will support the resolution being put to VLL shareholders at that Company's EGM on 24 April 2007 to assign the management rights of the 46 retail and wholesale communities and 32 ING Community Living Fund communities to SCV.
SCV is a specialist manager of retirement village assets and therefore this agreement assures all existing residents of their continued tenure in these communities.
Eskine Grove retirees stay put after management deal signed WA Business News April 19, 2007
Apr 2007 Village Life has abandoned sector
ALISON CALDWELL: After your experience of the last ten months with Village Life, do you think Village Life really has a future in this sector?
CRAIG WHITE: Well Village Life has openly said they're out of this sector. They're actively moving out of it altogether so I don't think they see themselves as having a future in this sector at all.
Village Life defends eviction plans Australian Broadcasting Corporation Transcripts April 19, 2007
Apr 2007 Preventing this from happening again
The NSW Fair Trading Minister, Linda Burney, said a government taskforce would examine the management agreement to ensure the residents would not face a similar situation again.
" While this is a good result for the residents, I am concerned that residents now need some certainty about the future of these new arrangements," she said. "The Commissioner for Fair Trading has been directed to examine the agreement entered into between the MSF Group and Sunny Cove to make sure that the residents' interests have been protected.
Ms Burney said the issue highlighted a need for consumers to be wary of contracts they sign.
" Business operators such as MFS and Village Life can't hide from their moral and ethical obligations towards their tenants."
Threat eases for elderly tenants The Sydney Morning Herald April 20, 2007
Apr 2007 Village Life's position
The Queensland-based company at the centre of a legal dispute which led elderly residents to believe they would be evicted from their retirement villages says it could not have handled the affair any differently.
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The embattled operator - which is in trouble with the Australian Tax Office and faces an imminent class action from angry investors - says it must end its leases on the facilities because they are too "financially onerous".
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Mr Gardiner (Village Life) said the onus was on MFS Diversified to find a replacement operator, and he anticipated that SCV would step in.
"There's no shortage of operators to operate the villages," he said.
Consumer Affairs Victoria is investigating any wrongdoing by Village Life while the NSW government will set up a high-level taskforce to examine the SCV deal to ensure the residents would not face a similar situation again.
Village Life lets rival manage villages AAP April 24, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/1935-village-life-lets-rival-manage-villages
For more articles on MFS go to http://www.agedcarecrisis.com/index.php/component/search/MFS?ordering=oldest&searchphrase=exact&limit=50
Domain Aged Care was formed by a group of investors in 2004. They bought Ramsay Healthcare’s nursing homes in 2006. This became a joint nursing home venture with MFS. It grew to own 20 facilities.
Feb 2008 report MFS founded in 2004
Domain executive director Bill Summers, chief operations officer Cathy Meyer and a group of private investors formed Domain in 2004. They bought out Ramsay Aged Care for $67 million in April 2006 and subsequently formed a joint venture with MFS.
Big cash injection from Domain sell-off The Australian February 1, 2008
Apr 2006 Buying Ramsay Aged Care
RAMSAY Health Care has sold its remaining residential aged care business to Domain Aged Care Group for about $67 million to complete its rationalisation program.
Ramsay sells aged care for $67m Sydney Morning Herald April 14, 2006 http://www.smh.com.au/news/business/ramsay-sells-aged-care-for-67m/2006/04/13/1144521461177.html
MFS had invested in property and with the economic downturn at the beginning of 2008 MFS found itself in trouble. Investors were demanding their money back. It sold its share in Domain Aged Care Group to AMP’s Principal Healthcare. It was also forced to sell off many of its other investments including most of its investment in Stella hotel and travel business. Recklessly investing senior management including chairman, past politician, Andrew Peacock fell on their swords.
Feb 2008 Selling Domain
AFTER two weeks weathering a storm of bad press, MFS Ltd yesterday delivered some encouraging news to shareholders with the $93.5 million sale of its share in the Domain Aged Care Group.
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The news also will provide relief for PIF investors after MFS this week announced it would freeze redemptions by up to six months after a sharp increase in requests by investors for their money back.
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The Domain sale comes on the heels of MFS slashing its holding in retirement village owner Babcock & Brown Communities Group from 5 per cent to 1.5 per cent two weeks ago.
MFS sells aged-care group share for $93.5m The Gold Coast Bulletin February 1, 2008
Fen 2008 Selling to AMP's Principal Healthcare Group
THE beleaguered MFS financial services group has exited its interest in privately owned Domain Aged Care by selling out to Principal Healthcare Group, part of AMP Capital Investors, netting MFS a badly needed cash injection of $93.5 million. In a joint venture with a group of private investors, MFS was Domain's main financier, providing the aged-care operator with $50 million in loans and $43.5million in call options and security interests.
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It is understood that Principal paid more than $300 million for Domain's 16 aged-care facilities, the majority of which are in Queensland and some in Victoria and NSW.
Big cash injection from Domain sell-off The Australian February 1, 2008
Feb 2008 More sell offs
MFS has also sold down stakes in HFA Holdings and various other MFS vehicles under pressure from its margin lenders, following last month ’s 69 percent collapse in its share price during a single trading session.
MFS sells Domain but Stella deal drags Australian Financial Review (Abstracts) February 1, 2008
Feb 2008 Trying to sell Stella Group
CORPORATE raiders Private Equity Partners and US-based Kohlberg Kravis Roberts are understood to have joined the bidding war for the Stella Group of accommodation and travel assets, which MFS is desperately trying to unload to avert disaster.
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Ironically, CVC is believed to have been willing to pay $2.2 billion last year but that offer too was knocked back because MFS valued the group then at $2.4 billion, sources said.
More details have also emerged about the precarious financial position of former chief executive Michael King and former director Phil Adams, who both founded the company nine years ago.
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It (MFS stock) crashed last month after swift negative reaction to an aborted $550 million capital raising to restructure the company.
Raiders in battle for Stella Group The Courier-Mail February 1, 2008
Feb 2008 Suspended from stock exchange
MFS, chaired by former Liberal Party leader Andrew Peacock, was suspended from the stock exchange last week after announcing debt had blown out to $1.69 billion -- $220 million of which is payable within the next three months.
MFS to shed its skin Herald-Sun February 1, 2008
Feb 2008 More and more trouble
THE stricken Gold Coast property and financial group MFS Ltd could be forced to forgive a $25 million loan it provided to one of its unlisted investment vehicles, which counts the former chief executive Michael King as a main shareholder.
Despite MFS being forced to conduct a fire sale of its key assets to ease its own debt problems, there are signs the MFS Alternative Asset Limited [AAL] fund could struggle to repay the loan extended by MFS last June.
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AAL was forced by its margin lenders, believed to be St George, Citigroup, Suncorp Metway and Sydney's Lift Capital, to sell its 19 per cent stake in HFA last week at a $39 million loss. It is believed the fund now has little cash left to repay its other debts. The sale of the HFA stake also occurred despite the shares being in escrow until June 2009.
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The matter has heightened concerns over the loans made across the various MFS vehicles. The listed MFS Living and Leisure Fund, which remains suspended from trading, failed to respond to a Herald report it could be struggling to repay its estimated $180 million of short-term debt. MFS Living's chief executive, Marshall Vann, has refused to clarify how his fund will repay a $60-odd million loan to the MFS Premium Income Fund [PIF] by March 31.
MFS fund struggles with inter-company loan The Sydney Morning Herald February 1, 2008
Feb 2008 Fire sale of Stella Group
DEBT-LADEN MFS has taken a step back from the brink of collapse with a $1.3 billion deal to offload two-thirds of its holding in the Stella Group of hotel and travel assets.
The forced sale to private equity group CVC Asia Pacific announced yesterday amounts to about $500 million less than what MFS valued the holding just a few months ago. But the deal will allow the struggling Gold Coast funds manager to erase $150 million of its $220 million in short-term debt.
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Under the agreement, MFS plans to sell 65 per cent of its Stella assets for just over $409 million in cash and the removal of about $905 million in debt.
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CVC is believed to have offered $1.6 billion last year for a half-stake in Stella but that was knocked back by MFS, which valued the group at up to $2.8 billion.
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MFS has previously bailed out of holdings in the Domain Aged Care Group, HFA, Babcock & Brown and other assets.Last week, MFS froze investor redemptions in its biggest vehicle, the $770 million Premium Income Fund. Following a disastrous failed bid last month to borrow $550 million to split up the company, the share price plunged 70 per cent, wiping out $1.5 billion of value. It has remained in a trading halt at 99 since January 23.
MFS forced to sell $1.3b of Stella assets The Courier-Mail February 5, 2008
Mar 2008 Troubles keep coming
Buyer CVC Asia Pacific was granted Foreign Investment Review Board approval for the purchase and forwarded a cheque for $406 million to MFS yesterday. The remaining $3.2 million, relating to cost reimbursements, will be received in 12 months.
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The previously announced $201.6 million sale of Sydney's Part Hyatt Hotel to a Japanese investor also settled yesterday, delivering MFS a performance fee of $5.16 million.
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The news came as MFS Diversified's shares remained suspended yesterday after the property group revealed a hiccup in its key $450 million debt facility. The group, owner of the iconic Villa World business, said it had breached one of its debt covenants attached to the facility forwarded by a syndicate of banks, led by Bank of Scotland subsidiary BOS International.
MFS sells Stella for $409m The Gold Coast Bulletin March 1, 2008
Mar 2008 Stella sale rescues but board to be changed
The company will also see $900 million of debt taken off its balance sheet with the sale of the business, whose operations include Harvey World Travel, Gullivers Travel, Breakfree Hotels and the Saville Hotel Group. The Stella debt includes a $800 million facility provided by UBS.
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MFS is also believed to be in the final stages of selling its property advisory business Gersh Investment Partners back to the founder of the group, Joseph Gersh.
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Aside from the $200 million in short-term loans with the US financial concern Fortress, MFS has a put option guaranteeing the $330 million in debts of its struggling New Zealand subsidiary MFS Pacific.
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The company has come under fire for selling its Stella stake for about one-third what it wanted from CVC in November. Its most vocal critic has been Chris Scott, the former boss of the S8 leisure business, which was sold to Stella last year. He took MFS scrip for the sale of the business. Mr Scott, who retains shares in MFS, is expected to use an extraordinary MFS general meeting on March 28 to call for a change to the board. The MFS chairman, Andrew Peacock, is believed to be drafting a resignation letter and it is doubtful he will attend the meeting, which the company has called for shareholders to vote on changing its name to Octaviar.
Cash injection from Stella sale The Sydney Morning Herald March 3, 2008
Despite its financial troubles and the adverse findings in its Ashmore nursing home (see below) Domain continued to be allocated new beds by government. One wonders on what the competitive process was based - surely not the company's financial health or the care of residents. Was it because it provided services at least cost to government - or because of political donations?
Domain Aged Care No. 2 Pty. Ltd. in New Auckland, Gladstone will receive 30 high care and 45 low care beds as a result of their recent application to the Federal Government. Federal Labor member for Flynn, Chris Trevor, said the bed allocation was part of the 2007 Aged Care Approvals round to Queensland, which Australia-wide has provided 6,525 new residential aged care places worth $233.3 million a year.
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“The new places are part of the 2007 Aged Care Approvals Round an annual competitive assessment process that allocates new aged care places to providers who best demonstrate they can meet the needs of the ageing population within a specified region.
Aged care given major boost with new funding The Observer (Gladstone) April 28, 2008 http://www.gladstoneobserver.com.au
An analysis of the purchase of Domain by AMP Capital Core Infrastructure Fund, Principal Health Care's owner is revealing of the sort of processes and patterns of thinking that now determine the care that aged care citizens receive. Note the absence of any considerations of care, responsibility, duty, community or other humanitarian issue in the deliberations determining who will care for the elderly and what will influence the decisions made about them. Cost cutting and staffing decisions are made within this context. There is no mention of the failures in care in Domain's Ashmore facility. Is it any wonder that care is threatened?
Sept 2008 Due diligence process
A team of specialist skill sets was assembled to undertake comprehensive due diligence to assess the investment merits and risks of the business. The team comprised internal sector specialists and financial structuring professionals alongside external advisors and industry consultants. Sophisticated financial modelling enabled 25 year cashflow forecasting and scenario analysis to understand changing factors such as wages growth, interest rates and other major cost and revenue items. The team also analysed sensitivities such as litigation, potential tax liabilities, superannuation issues and operating processes. In parallel to financial analysis of the business, the physical condition of the facilities was also subject to a thorough assessment.
“ Following many late nights and reams of legal documentation, the final negotiations cemented the price, warranties and other fundamental conditions”, said Michael.
AMP Capital believes Domain Aged Care’s experienced management team, reputation for quality, solid growth track record, and substantial property portfolio makes this a very attractive investment for Principal Healthcare Group, which following the acquisition, is the largest for-profit aged care provider in Australia.
The anatomy of a deal AMP Capital Newsletter http://www.ampcapital.com.au/ampfp/newsletter/spotlight2.asp Accessed 1/9/2008
The letters MFS were also the abbreviation for a US financial group. In 2008, at the same time as questions were being asked about its chances of survival, it had to change its name. It decided on Octaviar.
Jan 2008 Planning name change
MFS also said its board will recommend to shareholders that the company changes its name.
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" The board believes a change of name, brand and imagery is in the best interests of the shareholders and company."
MFS to sell aged care business AAP Jan 31, 2008
Feb 2008 Someone else already has that name
He said an agreement with U.S. firm Massachussets Financial Services meant MFS had to change its name anyway.
MFS name change due The Advertiser1 February 1, 2008
What happened in Domain should be viewed within the context of the way private equity operates and of MFS' past conduct in dealing with residents in nursing homes. The same processes are at work.
Domain provides an interesting insight into the way in which compartmentalisation in the corporate mind works (see article about this - pdf file). Consider the thought processes that underlie the statements in the following few extracts then look at Domain's staffing policies. Finally look at the real world described in one of their nursing homes. AMP Capital's Greg Roder could not have been unaware of the many press reports about the Ashmore facility (see later) when he made the statement about care below. They had just done due diligence. What did they actually look at - only finance? Remarkably statements like his are never challenged.
Those who succeed in the corporate world keep each of these patterns of thinking in separate compartments so that the conflicts and the consequences of what they think and do are not considered. Everyone plays along so they are seldom challenged. Quality care seems to describe care of shareholders rather than residents. What is described could not be further from the Eden Alternative to which Domain claims to aspire.
These processes are particularly likely to manifest themselves when private equity is involved. The pressures are stronger. Financial management is moved further from the coal face. The imposition of managerial processes makes it easier to compartmentalise.
I addressed many of the
issues underlying the risk of adverse outcomes and deteriorating care
in private equity owned health and aged care services in my
2007 submission (pdf file) to the senate economic committee's
private equity inquiry. This was shortly before studies in the USA
documented the adverse consequences of private equity ownership of
nursing homes.
The two articles
above provide a framework of understanding from which to examine the
contents of this page. The page illustrates what happens.
Embracing the Eden Alternative
The management and staff embrace and practice the Eden Alternative (TM). This means we are committed to making a difference to the lives of our residents, their families and staff.
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Our staff are committed to working in our aged care communities, and are supported in all ways possible to ensure that our residents daily life needs are met with respect, dignity and a smile.
Welcome to Domain Aged Care : The right choice for your future http://www.domainagedcare.com.au/ accessed Aug 2008
Feb 2008 New owners view!
AMP Capital head of infrastructure Greg Roder said: " - - - - - Domain Aged Care has a sound track record for quality care and good developments."
Big cash injection from Domain sell-off The Australian February 1, 2008
Apr 2008 Facilities but what about care? Domain Ashmore sits on a 1.6ha two-title holding fronting Wardoo Street and has 127 beds offering low-, high- and dementia-care.
Resident facilities in-clude a hair salon, coffee shop, theatrette, heated pool, garden courtyards, and private and communal lounges. It adjoins Aveo's upmarket Domain Retirement Country Club.
Principal Healthcare makes Ashmore and Kirra its domain Gold Coast News Apr 11, 2008 http://www.agedcarecrisis.com/index.php/news/68-media/2651-principal-healthcare-makes-ashmore-and-kirra-its-domain
In 2007 in Victoria the company used the federal governments new workplaces regulations to fire nurses and replace them with student personal care workers straight from TAFE. The nurses took the issue up at a home in Victoria to test the legality. They claimed this was a reduction of some 400 hours a week of qualified nursing time at this home. Not only would there be fewer trained nurses to supervise and train these inexperienced staff, but they would have much less time to do this. These trainees would get less supervision. Management claimed this change would have no impact on care.
Domain got its way in the industrial court and the nurses were made redundant. Once the precedent was established the same thing would have happened at other facilities and the nurses would have been powerless. Had something like this already happened for example at Ashmore on the Gold Coast?
May 2007 Nursing unions oppose redundancies
The Australian Nursing Federation (ANF) has asked the Industrial Relations Commission (IRC) to intervene in plans to make nursing staff redundant at an aged care home in Sale in Victoria's south-east.
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" There are 50 residents in this home classified by the Commonwealth Government with high care nursing needs," she said.
Union urges intervention against nursing home redundancies ABC News May 28, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/2005-union-urges-intervention-against-nursing-home-redundancies
June 2007 Reduction in nursing hours
The company managing the Domain Aged Care facility at Sale will go ahead with plans to lay off qualified nurses this week and replace them with personal care workers (PCWs).
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The federation says the changes mean a reduction of more than 400 hours a week of qualified nursing care.
Domain Aged Care's chief executive officer, Barry Ascroft, says despite the lay-offs, care levels will remain the same.
"Most of the care is delivered by PCWs, that's supervised by div one and div two nurses, and they're in a supervisory leadership positions to instruct PCWs," he said.
Aged care home replaces nurses ABC News June 12, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/2042-aged-care-home-replaces-nurses
Jun 2007 Redundancies put on hold
Planned redundancies at the Domain Nursing Home at Sale have been put on hold after an Industrial Relations Commission hearing yesterday.
The company, Domain Aged Care, is making nine qualified nurses redundant and replacing them with personal care workers.
The company has told the nurses they can apply for the lower-paid jobs.
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Domain Aged Care chief executive officer Barry Ashcroft says the delay will give nursing staff more time to decide if they want to apply for the lower paid personal carer positions.
"The staffing mix was incorrect before, it was one that we inherited. Most providers that take over a new aged care facility probably make changes within the first one or two months, we've taken 12 months to make those changes," he said.
Nursing home redundancies on hold ABC - Gippsland Jun 15, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/2059-nursing-home-redundancies-on-hold
Jul 2007 Redundancies go ahead.
Domain Aged Care Group has advised it will make all non-endorsed Division 2 nurses at its Sale, Bairnsdale and Lakes Entrance facilities redundant.
Sale is the first facility within the Domain group to be affected with plans to replace nine Division 2 nurses with nine personal care worker students straight from TAFE. On ABC radio, the chief executive officer recently asserted that the resident care levels would not be affected.
Domain will use endorsed Division 2 nurses to cover day and evening shifts. This allows Domain to reduce some Division 1 hours and surprisingly, some personal care workers will also lose hours.
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The proposal to dismiss all the unendorsed Division 2 registered nurses at Domain would not have been possible before the radical new WorkChoices laws. Domain has told its non-endorsed Division 2 registered nurses that after they are made redundant they can apply for their same jobs with lower pay as personal care workers
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ANF has questioned the validity of the redundancies. The job is not disappearing. The work is not disappearing. It will just cost the employer a lot less under WorkChoices to employ these nurses as personal care workers.
Domain Aged Care Group pursues RN Division 2 redundancies ANF web site July 31, 2007 http://www.anfvic.asn.au/campaigns/news/4463.html
At the same time as staffing was being reduced another nursing home was experiencing serious problems in infection control, nutrition, hydration and skin care. There were recurrent outbreaks of gastroenteritis. The conditions as described by residents suggest a Belsen-like concentration camp.
Instead of accepting the problem and its likely relationship to company policy the initial response of management was to embrace comments made by the AMA. This wishful thinking is typical and we should not doubt that this is what they thought.
That this was due to a lack of skills and insufficient numbers of staff is indicated by the company's reported eventual acknowledgement to assessors that there had been a loss of staff. We don't know if it had deliberately cut staff, but even if this was not so, then in light of its approach to staff, this is hardly surprising - but we should not expect them to see the connection. Contrast the press reports about conditions at this home with the statement on the company's home page above.
Apr 2007 Recurrent outbreaks gastroenteritis - not their fault
RESTRICTED access has been lifted at an Ashmore nursing home where a third outbreak of gastroenteritis among its staff and elderly patients this year is being investigated.
Five elderly residents were recently admitted to hospital after contracting the highly contagious illness, and a further 55 residents and 21 staff members of the Domain Aged Care home have been struck down this year.
The latest incident occurred earlier this month, with health authorities contacted on April 6, and the previous two outbreaks in January and February.
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Mr Ashcroft pointed to a media release on the Australian Medical Association's website when asked if he had some early explanations to what may have caused the outbreak.
AMA president Mukesh Haiker-wal released a statement last week saying it was `inevitable that outbreaks will occur from time to time in frail and vulnerable nursing home populations'.
While calling for calm in addressing health concerns in nursing homes, he said no matter how perfect the environment and the systems, there would still be outbreaks.
"Outbreaks of gastroenteritis are commonly related to airborne viruses in addition to food poisoning so it is important to be sure about the aetiology of such outbreaks," he said.
Mr Ashcroft said the Gold Coast outbreak was `clearly in the same league' as those referred to by the AMA president.
Aged care home all clear Health officials check Ashmore facility The Gold Coast Bulletin April 27, 2007
May 2007 Claimed to be under control - cause unknown
The operators of a Gold Coast nursing home say an outbreak of gastroenteritis which affected 26 residents and staff is now under control.
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Chief executive Barry Ashcroft says the home's management team does not know what caused the outbreak.
" We've checked out everything in the nursing home but we don't really know what's caused it," he said. "But we do know that it's resolved itself very quickly within a week, 25 or 26 cases have been resolved."
Nursing home gastroenteritis outbreak 'resolved' ABC News: May 29, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/2009-nursing-home-gastroenteritis-outbreak-resolved
May 2007 The residents know why - Medieval conditions
NURSING-home residents were left soaked in urine or abandoned for hours on a floor because of understaffing at a Gold Coast facility, relatives have said.
Claims of systematic neglect have been levelled at the Domain Aged Care centre at Ashmore, which is under investigation by the Department of Health and Ageing.
Domain Ashmore CEO Barry Ashcroft said the home had passed an Aged Care Standards and Accreditation Agency spot-check and all matters had been "resolved".
But more than 50 concerned residents and their family members are planning to take on what they say is gross negligence at the facility.
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The letter states:
- One resident lay on the floor for four hours following a fall before she was found.
- One resident was brought incorrect medication by an agency carer unfamiliar with residents when no experienced carer was available to assist.
- The wrong resident was taken to a doctor for an injection.
Relatives also claimed that their loved ones were allowed to remain soaked in urine and nurses were missing infections, which family were pointing out. Five relatives of separate residents, who wish to remain unnamed, said they were outraged that complaints had been ignored "for years".
One relative said that problems, including residents regularly having to wait for 20 minutes to an hour on the toilet before someone lifted or attended to them, and residents being left soaked in urine, were still evident at the weekend.
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Domain Ashmore business development manager Joanne Hope-Murray denied residents had been left soaking in urine and said a site would be unattended only if somebody had called in sick and could not be replaced.
Mr Ashcroft said he was not aware of any complaint about a resident falling and not being attended to for four hours.
Neglect of aged alleged The Courier-Mail May 30, 2007
Jun 2007 Damage control
Assessors from the Aged Care Standards and Accreditation Agency began a four-day surprise audit at the Domain aged care centre at Ashmore yesterday.
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Domain Ashmore CEO Barry Ashcroft said an independent employee had been hired to listen to residents' and relatives' complaints and a recent spot-check carried out by the ACSAA had cleared them of any wrongdoing.
But the ACSAA confirmed yesterday that they were now carrying out a comprehensive audit of all three services at the centre.
Auditors raid complex The Courier Mail June 1, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/2020-auditors-raid-complex
June 2007 Out of touch with real world
Domain Aged Care CEO Barry Ashcroft was confident the impending results of the audit would confirm they deliver good care. "Since March we have been fully co-operative with the agency for any questions they have, " he said.
Bad report for Coast aged home The Gold Coast Bulletin June 9, 2007
August 2007 Residents shown to be correct - and a startling revelation
A GOLD Coast nursing home plagued by gastroenteritis earlier this year has been penalised by the aged care watchdog for failing standards on infection control.
One of the facilities, which houses 37 high-care patients, also failed nutrition and hydration standards.
More than 100 residents and staff fell ill and at least seven were hospitalised with gastroenteritis during three separate outbreaks between February and June at Domain Ashmore.
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In a letter to complainants, DOHA said while no evidence that the approved provider had breached its responsibility under the Aged Care Act 1997 was found, it had passed on concerns to ACSAA, which then carried out audits.
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ACSAA passed the home on human resources and continence management, but failed it on infection control procedures and associated education. In the DOHA letter, complainants were told Domain had acknowledged a recent loss of staff and the trialling of a new roster had created concern and staff hours had been increased at one of the facilities.
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Domain Ashmore CEO Barry Ashcroft, who identifies himself as the inaugural state manager for the Aged Care Standards and Accreditation Agency in Queensland, did not respond to requests for comment yesterday.
Nursing home faces penalty The Courier Mail August 1, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/2159-nursing-home-faces-penalty
I was with Robin Short (see below) when patient advocacy group, Daniels Shield met with DOHA to discuss their failure to confirm her complaint about the care of her sister in the Domain Ashmore home. I heard her account of the situation in the nursing home, of the care her sister received - about which she was so upset.
I saw some of the photographs referred to. At the very least they indicate a mediocre standard of care. The photos and her account are in keeping with the accreditation findings, the gastroenteritis outbreaks, the accounts given in the press and the marketplace approach to business and to staffing. The difficulty of course is that isolated instances of similar findings can and do occur even in good homes but they are soon corrected.
What is important is their frequency and whether they are promptly identified by the nurses and corrected (i.e. not only after outside agencies pick them up). This important data is not collected or recorded in Australia. It is clear from the multiple complaints and the accreditation agencies findings that this was not an isolated infrequent instance in Ashmore. Furthermore far from identifying and correcting them this manager did not want to know or accept that they were occurring. The reports suggest he lived in another world.
This was one of multiple complaints, brought by Daniel's Shield, where residents and their families felt that the complaints mechanism had failed them. In some instances the agency had not even interviewed the family who complained, or nurses who had left the facility - even when they left because of their dissatisfaction about the way the home operated. The explanations offered for this by the agency were not credible, but they were offered in such a way that the person seemed to genuinely identify with them. When examining individual complaints they also did not seem to take into account the general situation in the home.
What was apparent was that the complaints mechanism was not meeting the expectations of residents. Although those officials we met seemed committed, they seemed to operate within structures, constraints and paradigms that made it difficult for them to be effective. The agency was for instance unable to give complaining family's accounts credence as it was impossible to accept what they said without further evidence. Their accounts were usually denied by the home.
The extracts in the previous section also illustrate where the accreditation and complaints bodies find their staff, and the patterns of thinking they likely bring with them. The line I have highlighted in red is revealing.
Feb 2008 A "no fault" after complaint
A SOUTHPORT woman says the aged care complaints system is gutless because of a `no fault' finding by an investigation of Domain Aged Care. Robyn Short has waited since last year for a written finding into her allegations her sister, Debbie Short, was given substandard care at the Ashmore home.
Ms Short alleged Domain staff failed to take good enough care of her sister Debbie, who died of multiple sclerosis complications in November last year.The Sun viewed photographs Ms Short submitted as part of her complaint, showing superficial wounds which Robyn said were the result of Debbie not being seated upright by staff. The Sun also viewed photographs which appeared to show uncovered bed railings.
``Her fingernails weren't cut short as they were supposed to be and because her hands would shake, she'd try to scratch herself and actually injure herself because her nails were too long,'' she said. Ms Short said one of the more distressing things she witnessed was what she described as her sister's hand `rotting' due to not being washed and dried properly by staff.
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Mr Summers said he could not comment on Ms Short's allegations, but said Domain did not have a case to answer. ``I understand Ms Short is very distressed, but we've been advised all her concerns had been finalised and that there were no issues to address,'' he said.
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She (state manager of the Department of Health and Ageing) also stated Domain had been the subject of two unannounced visits during the investigations and there was found to be no cause for action.
She added that during the investigation, Debbie's care plan had been amended to ensure her nails were cut every two weeks.
Sister faults `no fault' findings Gold Coast Sun February 27, 2008
It is worth noting that in spite of an outcry by residents' families two visits in February 2007 found no cause for action but an audit in June found failures in nutrition, hydration and infection control.
For more articles on Domain Aged care go to http://www.agedcarecrisis.com/index.php/component/search/Domain%20Aged%20Care?ordering=oldest&searchphrase=exact&limit=50
May 2008 Many creditors
The notice comes on top of National Australia Bank's demand for Octaviar to repay a $40 million debt, and legal action from Challenger Managed Investments for the company to repay $100 million in bonds originally expiring in November 2011.
Yesterday's announcement was interpreted by some as Octaviar signaling to its creditors to back off or see the company collapse.
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Mr Scott can argue that none of the creditors will have any chance of recouping all their debts if they demand repayment immediately. Octaviar has about $180 million in cash on hand, partly helped by asset sales, despite facing claims for immediate repayment of around $500 million.
Octaviar pushed closer to the edge Brisbane Times Business May 28, 2008 http://business.brisbanetimes.com.au/business/octaviar-pushed-closer-to-the-edge-20080527-2iqu.html
It is clear that MFS/Octaviar's management of its business was as lacking in insight and skill as its management of retirement villages and nursing home care. Investors of course invest in private equity groups knowing that they are taking big risks and dealing with potential charlatans. Elderly retirees, nursing home residents and their families do not realise that their lives and their well being is at the same risk. They do not expect this and neither does society.
MFS' name change did nothing for its fortunes. It continued to lose money and was pursued by its creditors. It defaulted on repayment of bank loans. It was delisted from the stock exchange. A spate of directors and its chairman Andrew Peacock walked out of the door. Banks and other creditors came looking for their money. There were $760 million write downs and a loss of $221 million
The public trustee in Queensland demanded a repayment of 351.5 million and another company demanded $100 million. The public trustee launched a court action to have the company wound up but this was resisted by creditors who felt they would eventually get more if the company continued to operate. They went to court and successfully delayed the liquidation process. There were allegations that MFS had pilfered $147.5 million from a subsidiary and lent it to other parties. The subsidiary commenced court action to recover this. Shareholders have commenced an $80 million class action against the company.
Court processes to resolve the issues and determine whether Octaviar is put
into liquidation have been deferred until 30 September 2008.
Octaviar's www address is http://www.octaviar.com.au/
For Updates:- A good way to check for recent developments in aged care is to go to the aged care crisis group's search page and enter the name of the company, nursing home or key words relating to any other matter in the search box. Most significant press reports are flagged there. The aged care crisis web site has recently been restructured and some of the older links used from this site may not work.
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