Merrill Lynch infuriates planners as stocks fall

Clients face less returns

By Vishal Teckchandani
Mon 15 Sep 2008

Merrill Lynch provokes anger among planners whose clients are facing less returns, as the S&P/ASX 200 further declines.

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Secured lender of the failed Lift Capital, Merrill Lynch has angered several financial advisers trying to retrieve clients' money.

A media report circulated on Friday showed creditors of Lift Capital faced returns of 10 cents less in the dollar, as the S&P/ASX 200 has further declined since mid-July.

"Obviously we are pissed off at Merrill Lynch," an unnamed planner, with clients' money stuck in Lift Capital, told InvestorDaily.

"Merrill Lynch could just go back into the market and buy back everyone's shares," the planner said.

"As the market has fallen away, they have money in their pocket, they can return everyone's mortgage properties and just be done with it.

"Advisers I have spoken to are furious with Merrill Lynch, and that is the biggest understatement of the year."

Creditors face returns of 50 cents in the dollar if they choose to liquidate Lift Capital, or 53 cents if they choose a deed of company arrangement (DOCA) scheme - down from 60 cents and 63 cents respectively.

Creditors will receive more via the DOCA in exchange for not suing, as Merrill Lynch and Lift Capital's directors inject $2.55 million into a pool of funds to be returned to creditors.

Creditors were scheduled to reconvene today to decide on appropriate action, but Merrill Lynch and Lift Capital's voluntary administrators, McGrathNicol, have been granted a two month extension by the Supreme Court, to negotiate a better DOCA.

The unnamed planner said: "Merrill Lynch will have to obviously come to the party, and tip in a lot of money to make this go away."

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