CORPORATIONS — voluntary administration — creditors’ meeting — application for extension of time fixed by s 439A of the Corporations Act 2001 (Cth) for convening of the second meeting of creditors — where administrators have been appointed to 542 companies that operated a property development business — where numerous development projects were incomplete at time of appointment — where administrators seek extension to allow time to complete developments and to carry out investigations — extension granted — further relief sought to ensure the orderly and efficient administration of the Companies
Quick Take
1In exceptionally large and complex voluntary administrations, a 12-month extension of the s 439A convening period may be justified where the extension is necessary to preserve asset value through completion of ongoing projects and to allow administrators to provide meaningful reports to creditors, even though the statutory scheme contemplates brief administrations.
2Where administrators determine that a subsidiary company is insolvent and no deed of company arrangement is capable of recommendation, the Court may direct under s 90-15 of the IPSC that the administrators are justified in causing the company to be wound up during the extended convening period without convening a second meeting of creditors, and may use s 447A to deem creditor resolutions passed where a company is found to be solvent.
3Section 447A may be used to relieve administrators from personal liability under s 443A for borrowings entered into to fund continued trading during administration, including on a nunc pro tunc basis, where the borrowings are in the interests of creditors and the lenders have agreed to the administrators having no personal liability.
