Toll claims oppression as Patrick tries to wind-up rail

<p>Toll Holdings has pre-empted Patrick Corp’s move to wind up Pacific National with its own action in the Victorian Supreme Court to remove Patrick’s directors on the rail operator’s board, alleging oppressive behaviour.</p> <p>The Toll move came yesterday (Wednesday, February 15) just before Patrick filed in the same court the winding up action that it has been publicly threatening since the Australian Competition and Consumer Commission ruled against the Toll takeover of Patrick one month ago. </p> <p>Toll claims that Pacific National directors Chris Corrigan and Alan Davies had frustrated Toll’s efforts to appoint a new chief executive, frustrated the appointment of an officer responsible for safety threatening Pacific National’s operations, and damaged the Pacific National business by threatening to wind it up.</p> <p>Toll chief Paul Little said: "We cannot allow this to continue. This is a scorched earth takeover defence that has the potential to destroy value in Pacific National."</p> <p>Patrick chief Chris Corrigan said: "Toll only has itself to blame for its predicament." Patrick triggered the Pacific National dispute by alleging that Toll deceived its joint venture partner over contracts in Queensland, and was seeking damages in another Victorian Supreme Court case. </p> <p>Mr Corrigan added that Toll legal action yesterday had only confirmed that Pacific National was dysfunctional, and that the claims of business as usual were wrong. </p> <p>"Toll’s legal action relies on virtually the same events upon which Patrick relies in its action seeking the winding up of the company under S461 of the Corporations Act," Mr Corrigan said,</p> <p>Directions hearings on both cases have been set for March 17. It is possible that the court will hear both cases concurrently, which could mean that the decisions will take more than a year.</p> <p>Patrick is also moving, separately from the court cases, to claim under the existing shareholders agreement half of Pacific National’s intermodal capacity to operate its own forwarding and train services. </p> <p>This would see the de facto split of Pacific National into competing baby versions that Toll is trying to prevent while it fights its thwarted takeover bid for Patrick through the Federal Court. </p> <p>Mr Little has said that Toll would block this interpretation of the operating agreement, which is likely to trigger what would be the fourth court case involving Pacific National and its future. </p> <p>The threat of winding up could also cause more legal moves by suppliers and creditors, suggest some commentators. </p> <br />