As we count down to this week’s much-anticipated Sunday program story on Macquarie Bank’s dealings over Allstate Explorations, word reaches Crikey that QBE Insurance has written out a cheque for $13 million settling claims over Allstate’s Beaconsfield goldmine in Tasmania, which has miraculously gone from lemon to cash cow in a few short years.

Macquarie originally had a $20 million exposure to Allstate, but then shelled out a further $300,000 buying up $50 million worth of the company’s other liabilities in what now, in my opinion, looks like a sweetheart deal with the administrator. The Millionaire Factory is good, but turning $300,000 into $50 million has astounded many observers and now the writs are flying in all directions from people who want a slice of its good fortune.

Dick Cheney’s old firm Halliburton was given the $60 million contract to build the Beaconsfield mine shaft but botched it completely. However, tricky Dickie’s people sneakily put the contract in a $2 company so when Allstate wanted to sue, they didn’t have much to go after, even though Halliburton is capitalised on Wall Street at a tasty US$25 billion, as you can see here.

Allstate therefore decided to go hunting elsewhere, hence the $13 million payout from QBE. A separate writ was lodged for about $40 million against Blake Dawson Waldron, the former Allstate lawyers who drew up the contract with Halliburton subsidiary Kellogg, Brown & Root.

When we say Allstate, we actually mean Macquarie Bank because it is nominally owed $70 million even though it only ever put up about $21 million. Therefore, Macquarie will pocket an estimated $6 million of the $13 million payout from QBE.

Sunday’s team of Adam Shand and Paul Steindl will no doubt be dodging the bullets as they attempt to get this story to air. Macquarie has already sued The Australian over a Michael West feature, so the defamation lawyers are getting plenty of work on top of all the litigation specialists fighting over the Allstate disaster-turned-cash-cow.

Our story last week on this saga suggested Channel Nine boss Sam Chisholm may have got himself involved, although we understand that is not the case. After all, Sam is too busy firing people and rebuilding his reputation as an A-grade a*sehole to go about directing what stories Sunday covers. That said, it will be very interesting to see whether Shand and Steindl can deliver the goods this weekend.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey