Yesterday, the embattled Gold Coast fund manager announced that it had sold its Gersh Investment Partners Limited business back to former Arnold Bloch Leibler partner, Joe Gersh, for the princely sum of $20 million. As part of what appears to be MFS’s “buy high-sell low” policy, the company had paid consideration of more than $80 million to Gersh only a few months earlier. (The GIPL website had, until last week, excerpts of articles trumpeting the sale to MFS. Those references have wisely been removed).

Sadly for Gersh, the sale and repurchase wasn’t exactly Kerry Packer-esque. Unlike Packer (who was paid cash by Alan Bond for Channel Nine), Gersh accepted dud MFS scrip as consideration for the business. Based on MFS’s recent closing price, Gersh’s stake in MFS had dropped to around $5 million anyway, so the $20 million cash was probably a good deal for him.

The question must be asked though: given MFS effectively paid $80 million for GIPL only last year, did it overvalue GIPL, believe its own share price was significantly over-valued at the time it purchased GIPL or sell GIPL far too cheaply back to Gersh? Admittedly, the answer is probably a combination of all three.

On a proportional basis, the sale of GIPL back to Gersh represented even worse value to MFS shareholders than the disposal of Stella, which was sold for around one billion less than MFS paid to assemble the tourism business.

The man who guided those purchases was recently terminated MFS CEO, Michael King. In what must have been MFS’s “pay for underperformance” bonus scheme, King last year received a cash bonus of more than $2 million (as well as base salary of $800,000). Unlike other MFS executives like CFO David Anderson and Investment Banking boss, Luke Gannon (who received almost 70% of their remuneration in worthless MFS scrip), King wisely chose to accept only cash. Sadly for MFS shareholders, that appeared to be the only wise move the polo-playing former lawyer seemed to make.

If and when MFS is placed in liquidation, creditors will no doubt be imploring legal action against King to recover the bonus payments in a similar manner to those of infamous One.Tel founders, Jodee Rich and Brad Keeling, who had their $7.5 million bonuses clawed back after One.Tel slid into oblivion.