Hayes (as Administrator), in the matter of Ply (ACT) Pty Ltd (Administrator Appointed) v Ply

REASONS FOR JUDGMENT 1 This is an ex parte application for orders pursuant to ss 439A(6) and 447A(1) of the Corporations Act 2001 (Cth) (the Act) extending the convening period under s 439A to 31 May 2013. The convening period is due to end on 10 April 2013. 2 The defendant company is a building contractor. At the time the plaintiff was appointed as administrator of the defendant, the defendant had substantial operations and complex affairs. The defendant specialised in commercial and multi unit residential buildings including substantial projects in the ACT and New South Wales with an average value of approximately $30 million each. It had an average yearly revenue of approximately $120-160 million and creditors in every State and Territory of Australia other than Tasmania and the Northern Territory. It had 32 employees and roughly 400 sub-contractors. One hundred and twenty seven creditors participated in the first meeting of creditors either in person or by proxy, claiming debts totalling approximately $35,739,000. 3 The plaintiff's representative submitted that, should the company be placed into liquidation, it is expected that the employees will receive their entitlements in full and the secured creditor (PBS Property Group Pty Ltd) will receive the remaining money - leaving no dividend for the substantial number of unsecured creditors. The Court was informed by the administrator's representative that PBS Property Group Pty Ltd is not a related corporation of the defendant. PBS is a former owner of the business operated by the defendant and its security interest relates to bonds and other performance guarantees that have been issued and certain information technology arrangements. 4 The two largest projects - the Astin apartments in Braddon, ACT and the Nishi Residential Building in Acton, ACT have been the subject of negotiations between the liquidator and creditors. Heads of agreement have been negotiated and signed in relation to the Astin project with the effect that approximately $5.2 million of creditor's claims have been removed. Negotiations regarding the Nishi project are well advanced. The administrator's representative submitted that resolution of the claims in relation to the Nishi project was "quite realistic". The administrator deposed that it was his belief that it was in the best interests of the unsecured creditors that the Nishi project negotiations be finalised and a deed of company arrangement entered into. 5 Further, I note that: This application has the support of the convening committee of creditors. That committee is comprised of representatives of three creditors whose respective situations are representative of a substantial cross-section of creditors. They comprise a representative of the secured creditor, a subcontractor who has completed all work on the projects and a subcontractor who has yet to complete work on the projects. Employees were offered the possibility of representation on the committee but declined. The application for the extension has been made within time. It appears to me to that the proposed extension provides for a reasonable and not excessive time for the negotiation of the matters which the administrator has put forward. There is no prejudice to employees by reason of the extended period. 6 I am satisfied by the evidence and submissions before me that the administrator's actions have been diligent and the extension of time should be granted. I am satisfied that granting an extension of time would further the objects of Pt 5.3A of the Act. 7 Accordingly, I make the orders as amended which I have signed and dated today. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.