Banks criticised

Hastie Group's collapse began about six weeks ago when its banks, owed hundreds of millions, decided to cut their losses and get out rather than extend another line of credit, according to a separate report by the AFR.

A former Hastie director, Harry Boon, who resigned on Friday along with Lindsay Phillips, blamed three banks for refusing to take a write-down on their debt.

“This was not a ship that was sinking,” Mr Boon reportedly told the AFR. “It had two independent financiers who looked it over and were willing to put the dough in and we had a minority of bank who, in my view, were acting unreasonably, and we could not budge them. At that point, what's a director to do? We'd tried so hard.”

Following the collapse, banks are reportedly owed more than $500 million in loans and guarantees, many of which were created to fund Hastie's rapid expansion, according to Fairfax.

ANZ is the largest creditor, and is owed $150 million, while Westpac is owed nearly $80 million, NAB about $35 million and Commonwealth Bank some $20 million, Fairfax said, though the debt figures could grow as accountants review the company's books.

The company could also face lengthy litigation stemming from the collapse, as investors who contributed to a $160 million recapitalisation last year explore their legal options, according to The Australian.

http://www.businessspectator.com.au/bs.nsf/Article/Hastie-auditors-come-under-fi...