You’ve got to hand it to Chris Scott – the man certainly has guts. Scott, who is still to face trial in relation to allegedly inflating commissions at S8 apartments, has not only returned to MFS/Octaviar, but has also given a wide ranging article yesterday to the AFR regarding the plight of MFS.

Scott confirmed what has appeared obvious since disgraced former CEO, Michael King, gave that infamous teleconference in January – that MFS faces liquidation. Scott told the AFR, “it’s either liquidation and the basket of history or we have a future. There are still a lot of people owed serious money and a number of event s that could send things over the fence.”

Sadly for Scott, who bravely stepped back into the fire after a well-deserved retirement in Singapore, he seems to be facing a battle that he cannot win. Last month Crikey illustrated the problems currently facing the various MFS entities, most of which remain suspended and some of whom are in breach of loan covenants.

As a fund manager, MFS largely trades on its reputation. No one in their right mind would invest in an MFS fund when the company begins trading again. Investors in MFS’ Premium Income Fund (some of whom were advised to invest in the fund by former MFS director, and fund manager, Michael Hiscock), arguably the “safest” of MFS vehicles, aren’t able to withdraw their funds, nor are they receiving distributions.

MFS’ business model revolved around buying a random collection of assets (by over-bidding well above their intrinsic value) and selling those assets to other MFS entities, taking hefty fees along the way. The model falls apart when (a) MFS can’t afford to buy anything as no bank will lend them a cent; and (b) MFS can’t get investors to buy the assets from them because their reputation is worse than Wayne Carey’s.

It has already been revealed that former MFS directors, Michael King and Phil Adams, have significant margin loans attached to their holdings provided by lending outfit Lift. Like Opes Prime, Lift is now in the hands of the administrators.

The AFR acknowledged that the value of Chris Scott’s margin loan is around $9 million. Scott currently holds 22.4 million Octaviar shares. If and when Octaviar ever reopens, many suspect the shares will trade considerably lower than 50 cents and will inevitably trigger a margin call for Scott (as well as for King and Adams). The good news for Scott is that he has already offloaded around 20 million MFS shares prior to the suspension (Scott received around 40 million MFS shares when he sold his S8 business).

MFS/Octaviar creditors and shareholders might be wondering whether it is even worth re-listing, or whether they would be better served by liquidating what is left and setting the dogs on the men who allegedly caused the mess: the polo playing Michael King and Phil Adams of Arabia.