Patrick seeks to break up Pacific National

<p>Patrick Corp is to seek leave from the Victorian Supreme Court to break up the Pacific National joint venture with Toll Holdings. </p> <p>If Toll contests the application, then the case could run into next year, a prospect which leads rail industry experts to suggest Patrick and Toll to ensure that Pacific National’s operational management should be quarantined from the court action and the acrimony.</p> <p>How Pacific National is dissolved will now depend on the courts. </p> <p>A judge may decide the easiest way is to use the dispute proceedings and the shareholder agreement which Patrick tried and failed to activate last year. </p> <p>This would see the coal and grain businesses auctioned off to the shareholders, with the intermodal business &#8211 likely to be the first target for both parties &#8211 split up equitably between them.</p> <p>Where intermodal assets are indivisible, such as important terminals at each of end the network, then the two sides will have to share them.</p> <p>Other assets, such as locos, will be split one for one. </p> <p>Patrick managing director Chris Corrigan said he did not believe that breaking up Pacific National would prove to be difficult.</p> <p>However, rail industry observers point out there are many common assets across Pacific National, including IT systems, locomotives and employees who move between divisions.</p> <p>Many of the locomotives are debenture financed, the liabilities for which would have to be divided up. </p> <p>As well as financiers, there are relationships between Pacific National and customers, suppliers and employees, all of which may have to be renegotiated under conditions of some stress, and all of which could end up in court.</p> <br />