Cathro, in the matter of Riverina Solar Pty Ltd (administrators appointed) [2024] FCA 1047

Introduction 1 The plaintiffs, Simon John Cathro and David Mark Mutton, are the joint and several administrators (the administrators) of Riverina Solar Pty Ltd (administrators appointed) (the company). They were appointed on 8 August 2024 pursuant to s 436C of the Corporations Act 2001 (Cth) (the Act) by the company's secured creditor, Tellhow International Engineering & Contracting Co Ltd (Tellhow). 2 The plaintiffs seek orders pursuant to ss 439A(6) and 447A(1) of the Act extending the convening period for the second meeting of creditors of the company to 11.59 pm on 30 October 2024 and to permit the convening and holding of that meeting at any time during the extended period. Unless the convening period is extended, it will end on 5 September 2024. As matters presently stand, the administrators are required to issue a second report to creditors no later than that date, pursuant to s 75-225 of the Insolvency Practice Rules (Corporations) 2016 (Cth). 3 The application is supported by an affidavit made by Mr Cathro on 3 September 2024.

Background 4 The company is a wholly-owned subsidiary of Suntech Power Japan Corporation (Suntech). It was incorporated as a special purpose vehicle for the development of a 30 MW solar farm at Yoogali in New South Wales (the Riverina Solar Farm). The Riverina Solar Farm will occupy a 110 ha site. It will include approximately 120,000 solar panels supported by approximately 30,000 piles. The project is "shovel ready", meaning that it has the requisite development consent and associated contracts to enable it to commence. Suntech is the financial guarantor for the project. 5 The company holds various contractual rights in relation to the project. At the time of the administrators' appointment, it had no employees. This remains the position. 6 On present information, Tellhow is the company's only secured creditor. It has claims totalling $26,163,791. It has a judgment debt against the company for US$17,048,015.27 plus filing fees of $202.00. Tellhow also has a costs order in its favour against the company for the fixed sum of $250,000. The company has unsecured creditors with potential claims totalling approximately $23,832,781. However, most of these claims, in terms of value, are claims made by related entities of the company. 7 On 12 August 2024, the administrators issued their first report to creditors. On 20 August 2024, they convened a first meeting of creditors. A committee of inspection has not been appointed. 8 The administrators have been provided with reports on company activities and property from two directors, Craig Nalder and Bo Hu. Based on the information available to them, the administrators believe that the reports are incomplete. For example, there is no disclosure of the judgment debt or the costs order in Tellhow's favour. 9 So far, the administrators have not identified that the company has any tangible assets. However, it has contracts and leases which may be realisable. 10 Mr Cathro's affidavit deals with a number of topics, including the work undertaken by the administrators since their appointment. It is not necessary for me to summarise or discuss all the matters he has detailed. It is only necessary for me to refer to one matter. 11 On 30 August 2024, the administrators invited urgent expressions of interest in a sale of the company's business or assets, or the recapitalisation of the company by a deed of company arrangement (DOCA). They imposed a truncated time period for the receipt of expressions of interest in light of the present application to the Court. A number of expressions of interest have been received. Four interested parties have signed confidentiality agreements and three have paid the required $1,000 refundable deposit in order to access due diligence material. One interested party has provided an indicative DOCA proposal.

The reason for an extension 12 The administrators, through Mr Cathro, have expressed the opinion that it is in the interests of creditors that the administration continue and that the convening period be extended for the period sought, for a number of reasons. Essentially, the administrators are of the opinion that the extension they seek will enable sufficient time for a DOCA proposal to be submitted, which may result in a better return to creditors than placing the company in liquidation. In addition, time will be required to consider any such proposal and to prepare an appropriate report to creditors that deals with the outcome of this process. Mr Cathro has stated that the extended period the administrators seek may be shortened if they are able to obtain a DOCA proposal earlier than anticipated. If that were to occur, the administrators would likely convene the second meeting of creditors immediately. 13 Mr Cathro has said that preparation of the second report to creditors will be quite complex and costly. He has expressed the understandable desire that the report be prepared after pursuing all reasonable attempts to obtain a better outcome for creditors than liquidation of the company. 14 Mr Cathro has said that, if the convening period is not extended, and unless a DOCA proposal is received prior to 5 September 2024, it is likely that the administrators will recommend that the company be wound up. He has said that the likely recoveries in a liquidation are uncertain.

Consideration 15 The principles on which the Court proceeds in applications for the extension of the convening period for the second meeting of creditors of a company in administration are well-known. I do not need to recite them in these reasons. The written submissions that have been filed in support of the present application refer to a number of the relevant authorities. In oral submissions, I was referred to the statement of principles noted in Dickerson, in the matter of Disability Services Australia Limited (administrators appointed) (No 2) [2021] FCA 1133 at [22] and quoted in Tracy, in the matter of In2Food Australia Pty Ltd [2021] FCA 1104 at [4]. 16 I am persuaded that it is appropriate to grant the extension that the administrators seek, for the reasons advanced in Mr Cathro's affidavit. 17 I note that Tellhow supports the present application. The administrators have given notice of the application to other creditors, but that notice was only given at 11.33 am today. However, as I have said, most of those creditors, in value, are related entities of the company. 18 The administrators also seek an order under s 37AF(1) of the Federal Court of Australia Act 1976 (Cth) in respect of certain parts of Mr Cathro's affidavit and the documents described as Confidential Exhibit SC-2 thereto. The order is sought on the ground that it is necessary to prevent prejudice to the proper administration of justice. 19 The order is for a limited period (until 11.59 pm on 30 October 2024). It provides for earlier disclosure with the administrators' consent or by an order of the Court in an application of which the administrators have at least three business days' written notice. 20 In broad terms, information that is sought to be protected relates to the expressions of interest that have been made and received by the administrators, including aspects of the indicative proposal, and to views the administrators have reached regarding the enforceability of certain of the company's apparent rights. I am satisfied that, at the present time, the information is commercially sensitive and that its disclosure may prejudice the administrators' efforts to secure the best possible outcome for the creditors. My satisfaction on these matters provides an appropriate basis for granting an order to the effect of the order that the administrators seek. An order, in appropriate terms, should therefore be made.

Disposition 21 Orders, substantially in the form sought by the administrators, will be made. A further order will be made to the effect that any person demonstrating a sufficient interest can apply to the Court to vary or discharge the orders that provide for the extension of the convening period and the holding of the convened meeting. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates.