FEDERAL COURT OF AUSTRALIA

In the matter of Pan Pharmaceuticals Limited [2003] FCA 598

CORPORATIONS – application by administrators of companies in voluntary administration for 75-day extension of time under s 439A of Corporations Act 2001 (Cth) for convening of meeting of creditors required by that section – director/contributory, pursuant to leave to appear, makes submissions in opposition to the grant of extension – exercise of discretion – whether it should be left to creditors at meeting held in accordance with timetable laid down in s 439A whether to give administrators more time and to adjourn meeting accordingly.

Corporations Act 2001 (Cth) s 439A

Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 cited

Re Echuca Insured Housing Loans Pty Ltd (Administrator Appointed) v Lumsden, unreported, Supreme Court of Victoria, Harper J, 4 February 1994 cited

Re Tracker Software (Australia) Pty Ltd (Administrator Appointed) (1997) 24 ACSR 92 cited

IN THE MATTER OF PAN PHARMACEUTICALS LIMITED

N 3033 OF 2003

LINDGREN J

6 JUNE 2003

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 3033 OF 2003

IN THE MATTER OF PAN PHARMACEUTICALS LIMITED (ADMINISTRATORS APPOINTED) (ACN 091 032 914)

AND

PAN PHARMACEUTICALS EXPORT PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 100 897 514)

AND

PAN LABORATORIES (AUSTRALIA) PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 003 763 308)

AND

PAN PHARMACEUTICALS SERVICES PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 095 628 943)

AND

PAN PHARMACEUTICALS TECHNOLOGIES PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 104 129 188)

ANTHONY GREGORY McGRATH AND CHRISTOPHER JOHN HONEY IN THEIR CAPACITY AS THE JOINT ADMINISTRATORS OF PAN PHARMACEUTICALS LIMITED (ADMINISTRATORS APPOINTED) (ACN 091 032 914)

AND

PAN PHARMACEUTICALS EXPORT PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 100 897 514)

AND

PAN LABORATORIES (AUSTRALIA) PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 003 763 308)

AND

PAN PHARMACEUTICALS SERVICES PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 095 628 943)

AND

PAN PHARMACEUTICALS TECHNOLOGIES PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 104 129 188)

PLAINTIFFS


JUDGE:	LINDGREN J
DATE OF ORDER:	6 JUNE 2003
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. An order extending the convening periods for the meetings of creditors required to be held under s 439A of the Corporations Act 2001 (Cth) of:

(a) Pan Pharmaceuticals Limited (Administrators Appointed) ACN 091 032 914;

(b) Pan Pharmaceuticals Export Pty Limited (Administrators Appointed) ACN 100 897 514;

(d) Pan Pharmaceuticals Services Pty Limited (Administrators Appointed) ACN 095 628 943; and

(e) Pan Pharmaceuticals Technologies Pty Limited (Administrators Appointed) ACN 104 129 188

for a period of 75 days.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 3033 OF 2003

IN THE MATTER OF PAN PHARMACEUTICALS LIMITED (ADMINISTRATORS APPOINTED) (ACN 091 032 914)

AND

PAN PHARMACEUTICALS EXPORT PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 100 897 514)

AND

PAN LABORATORIES (AUSTRALIA) PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 003 763 308)

AND

PAN PHARMACEUTICALS SERVICES PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 095 628 943)

AND

PAN PHARMACEUTICALS TECHNOLOGIES PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 104 129 188)

ANTHONY GREGORY McGRATH AND CHRISTOPHER JOHN HONEY IN THEIR CAPACITY AS THE JOINT ADMINISTRATORS OF PAN PHARMACEUTICALS LIMITED (ADMINISTRATORS APPOINTED) (ACN 091 032 914)

AND

PAN PHARMACEUTICALS EXPORT PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 100 897 514)

AND

PAN LABORATORIES (AUSTRALIA) PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 003 763 308)

AND

PAN PHARMACEUTICALS SERVICES PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 095 628 943)

AND

PAN PHARMACEUTICALS TECHNOLOGIES PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 104 129 188)

PLAINTIFFS

JUDGE:	LINDGREN J
DATE:	6 JUNE 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

1 The plaintiffs, Anthony Gregory McGrath and Christopher John Honey (“the Administrators”) are the administrators of five companies. They apply ex parte under subss 439A(1) and (6) of the Corporations Act 2001 (“the Act”) for an extension of the convening period within which they are required to convene meetings of the creditors of the respective companies.

2 On 22 May 2003 the Administrators were appointed under s 436A of the Act as joint and several administrators of Pan Pharmaceuticals Limited (ACN 091 032 914) (“Pan”). On 23 May 2003 they were appointed under the same section as joint and several administrators of Pan Pharmaceuticals Export Pty Limited (ACN 100 897 514), Pan Laboratories (Australia) Pty Limited (ACN 003 763 308), Pan Pharmaceuticals Services Pty Limited (ACN 095 628 943) and Pan Pharmaceuticals Technologies Pty Limited (ACN 104 129 188). Those four companies are wholly owned subsidiaries of Pan. I will refer to all five companies as “the VA companies” because all five are in voluntary administration.

LEGISLATION

3 Section 436E of the Act provides that the administrator of a company under administration must convene a meeting of the company’s creditors in order to determine whether to appoint a committee of creditors, and, if so, who are to be its members. That meeting must be held within five business days after the administration begins. It is not that meeting, but the second meeting of creditors (required by s 439A of the Act) with which the present application is concerned. (In fact the first meeting of creditors was held and the creditors did appoint a committee of inspection.)

4 Subs 439A(1) provides that the administrator of a company under administration must convene a meeting of its creditors within the convening period as fixed by subs (5) or extended under subs (6) of s 439A. Subs 439A(2) provides that the meeting must be held within five business days after the end of the convening period. Accordingly, the meeting may not be held prior to the expiry of the convening period as fixed by subs (5) or as extended under subs (6), even if it would be convenient for it to be held earlier.

5 Subs 439A(5) provides that the convening period is, relevantly, the period of 21 days beginning on the day when the administration begins. Since the administrations in the present case began on 22 May 2003 in the case of Pan, and on 23 May 2003 in the case of the other VA companies, the convening periods end on 11 June 2003 in the case of Pan and on 12 June 2003 in the case of the other VA companies. By reason of subs 439A(2) noted above, the second meetings of creditors are therefore required to be held no later than 18 June 2003 in the case of Pan, and 19 June 2003 in the case of the other VA companies.

6 Subs 439A(6) of the Act provides that the Court may extend the convening period on an application made within the original period of 21 days. The present application is made within that period. The Administrators ask that the convening period be extended from 11 and 12 June 2003 respectively for a period of 75 days.

7 Pursuant to r 2.13 of the Corporation Rules 2000,I gave leave to James Selim, a director of all five VA companies and a contributory of Pan, to be heard in the proceeding without becoming a party to the proceeding.

FACTS

8 Pan is a publicly listed company. It has been manufacturing pharmaceutical products for various “sponsors” for approximately 29 years. Generally, the products were manufactured by Pan pursuant to written contracts with the sponsors, which supplied the products to distributors or retailers who offered them for sale to the public.

9 Pan is the primary trading vehicle of the group. The fate of each of the four subsidiaries is inextricably linked to the fate of Pan.

10 On 30—31 January 2003 the Therapeutic Goods Administration (“TGA”) conducted an unannounced Good Manufacturing Practices (“GMP”) audit on Pan to investigate possible causes of recalls of “Travacalm”, a travel sickness product manufactured by Pan, due to allegations of a series of adverse consumer reactions to the product. The purpose of the audit was to assess Pan’s compliance with manufacturing standards and with the conditions set out in its manufacturing licence.

11 Further audits were carried out by the TGA in February and April 2003, and an audit report was issued on 27 April 2003. The TGA concluded that the issues identified during the January audit were not restricted to the one product; that corrective actions taken by Pan in response to previous TGA audits had been unsatisfactory; and that there were “critical GMP deficiencies” and instances of non-compliance with the conditions of Pan’s licence to manufacture therapeutic goods.

12 By letters dated 28 April 2003 from the TGA, Pan was informed that the products listed in schedules to the letters would be removed from the Australian Register of Therapeutic Goods and that Pan was required to take immediate steps to recover all such products manufactured and supplied since 1 May 2002. This product recall was to be conducted to consumer level and extended to all products manufactured by Pan.

13 By a further letter from the TGA dated 28 April 2003 Pan was advised that its licence to manufacturer therapeutic goods had been suspended for six months.

14 Mr McGrath, one of the Administrators, states that he understands the product recall to be the largest product recall ever to be conducted in Australia.

15 Pan has received over 30 letters to date from or on behalf of sponsors for which Pan has manufactured products, stating that they will be seeking compensation from Pan in relation to losses incurred as a result of the actions of the TGA. Pan has also received more than 20 letters from members of the public or their legal representatives claiming compensation for losses alleged to have been suffered as a result of the ill effects of Pan products (principally Travacalm).

16 According to Mr McGrath’s affidavit, since their appointment on 22 and 23 May 2003, the Administrators have:

“(a) convened meetings of creditors of each of the VA companies under section 436A of the Corporations Act which were held on 29 May 2003;

(b) convened a meeting of the committee of creditors which is to be held on Thursday 12 June 2003;

(c) requested the directors of each of the VA companies to provide a report as to affairs pursuant to section 438A of the Corporations Act, and allowed the directors an extension to provide that report until 13 June 2003;

(d) met with various major creditors to discuss the nature and implications of the appointment of the Administrators;

(e) managed the product recall;

(f) reviewed the contingent claims made or threatened to be made against the company with a view to forming an opinion about the value of those claims, and developed a protocol for dealing with them;

(g) met with representatives of the Therapeutic Goods Administration to discuss the reinstatement of Pan’s manufacturing licence;

(h) overseen a major review of the company processes and in particular its computer systems to address deficiencies identified;

(i) gathered various documents and information in relation to the businesses;

(j) reviewed financial reports prepared by the management of the VA companies as at 30 December 2002;

(k) reviewed financial forecasts and estimates prepared by management with the assistance of Deloitte Touche Tohmatsu during May 2003 relating to the solvency issues of the VA companies;

(l) held discussions and issued instructions to legal advisors relating to various matters relevant to the administration of each of the VA companies including proceedings recently issued against the VA companies;

(m) liaised with the Australian Workers Union who represent a proportion of the workforce concerning the efforts to obtain reinstatement of the manufacturing licence, offering the business for sale and securing employee entitlements;

(n) reviewed financial models prepared by the company management detailing the costs associated with the recall, the necessary work required to satisfy the TGA to reinstate the licence and ascertained the costs involved with maintaining an appropriate level of workforce to enable manufacture to begin if the licence suspension is lifted;

(o) dealt with numerous retention of title claims;

(p) dealt with forensic accountants (Deloitte Touche Tohmatsu) and lawyers to establish guidelines for the assessment of claims by sponsors for reimbursement of legal costs and for loss of profits; and

(q) dealt with numerous telephone queries from creditors.”

17 Mr McGrath has practised in insolvency for 19 years and has been a registered liquidator since 1993, an official liquidator of the Supreme Court of the Australian Capital Territory since 1996 and an official liquidator of the Supreme Court of New South Wales since 1999. His co-plaintiff, Mr Honey, has practised in insolvency for 13 years, was a licensed insolvency practitioner in the United Kingdom from 1992 to 1999, and has been a registered liquidator in Australia since 2002.

18 Mr McGrath states that in the Administrators’ experience it is of primary importance that the Administrators’ reports contain sufficient information to enable creditors to be as fully informed as possible about matters relevant to their decision whether or not to vote in favour of a resolution that:

(a) a deed of company arrangement be executed, if there is a proposal for one; or

(b) the voluntary administration end; or

Mr McGrath states that the Administrators will not be in a position prior to 11 June 2003 (in the case of Pan) or 12 June 2003 (in the case of the other VA companies) to prepare an Administrators’ report which is adequate for the purpose of enabling them or the creditors to form a considered opinion about whether it would be in the interests of creditors to vote for one of the three courses mentioned.

19 Mr McGrath states that if the application for extension of the convening period is not granted, the Administrators will, at the meetings of creditors, recommend that the meetings be adjourned for 60 days to enable the Administrators to prepare an adequate report. If the creditors resolve in favour of an adjournment there would have been a wastage of time and money. Although Mr McGrath’s affidavit did not estimate the amount of money wasted, senior counsel for the Administrators informed me on the hearing, without objection from counsel for Mr Selim, that the “hard costs” (the cost of preparing the report, addressing the envelopes, postage and other similar expenditures) would be of the order of $5,000, and that the cost of the professional services involved would be of the order of $80,000–$100,000.

20 Mr McGrath’s affidavit describes the complexity of the businesses operated by the VA companies. He states that at the time of the appointment of the Administrators the VA companies:

“(a) employed approximately 250 staff, including casuals, and continue to employ 125 staff;

(b) prior to the suspension of their manufacturing licence on 28 April 2003, had over 4,500 formulations;

(d) exported thirty-seven per cent of total manufacturing to sponsors in thirty-nine foreign countries;

(e) other than related party creditors, on the advice of the management of the VA companies, have trade creditors with claims estimated by the directors of the VA companies, to total approximately A$27,000,000.00 in value; and

(f) were parties to approximately 1,000 contracts concerning the operation of the businesses.”

21 Mr McGrath states that in his view the value to creditors will be maximised if Pan is able to secure full or partial reinstatement of its suspended manufacturing licence. There is really no dispute about this: whether there is to be a sale of Pan’s business or, as Mr Selim wishes, the business is to be carried on under the terms of a deed of company arrangement, renewal of the manufacturing licence is essential.

22 To this end, the Administrators have been having discussions with the TGA, the purpose of which is to procure the licence to be partially or fully reinstated.

23 Mr McGrath’s preliminary view is that it will be found to be in the best interests of creditors to offer Pan or its business for sale “as licensed”, by public tender as soon as practicable. As noted below, Mr Selim disagrees with this view.

24 Mr McGrath states that realisation by way of sale would require the Administrators to address a number of complex issues, including:

“(a) the identification of all assets as well as, a determination of their utility and potential realisation value. This task is made more difficult because Pan has an incomplete asset register;

(b) the identification of all relevant intellectual property and a determination of its potential value;

(c) a detailed valuation of the potential market for Pan products, both domestic and international

(d) an evaluation of Pan’s future personnel requirements;

(e) the identification and evaluation of material supplier and customer contracts;

(g) a determination of the working capital required to achieve partial or total licence reinstatement; and

(h) consideration of the best and most efficient available sale structure and processes.”

25 Mr McGrath states that it will take approximately two months for these issues to be properly addressed and resolved and for an effective tender process, open to all interested parties, to be conducted, after which a further two weeks will be required to prepare the report to creditors in accordance with statutory requirements. Mr McGrath’s affidavit states as follows:

“31. Any proposal for the sale of the business or the entry into a deed of company arrangement will be conditional upon acceptance by creditors at the second meeting of creditors to be held in accordance with the Corporations Act.

32. I anticipate that potential purchasers may seek to purchase the business of Pan by means of a deed of company arrangement, as they are in my view likely to desire to obtain the company shell (including its public status and its manufacturing licence). I therefore consider that the ultimate result of the sales process being considered at present might well be a deed of company arrangement proposal(s) by the successful tender party (or tender parties, if there are a number with viable proposals).

33. In addition, any recommencement of manufacturing will require approval from the TGA. Whilst my discussions with representatives from the TGA have been positive in relation to this issue to date, I do not have a firm commitment from the TGA as to whether Pan may be permitted to recommence manufacturing products at some time in the near future.

34. If the TGA refuses to allow Pan to manufacture goods before the expiry of the suspension of its manufacturing licence, liquidation may be the only option for the VA Companies.

35. I anticipate that it will be a number of weeks before a decision from the TGA as to the reinstatement of the manufacturing licence, will be made. That time will be after the period in which the administrators are presented required to convene the second meetings of creditors of the VA Companies.”

26 As noted earlier, there are more than 20 claims for compensation made by or on behalf of persons who allege that they have suffered personal injury as a result of consuming Pan products which were subsequently recalled. Most of these claims have not yet been quantified and the Administrators have referred them to their solicitors. In order to advise the creditors properly in relation to these claims, the Administrators have to ascertain the likelihood of their success, their estimated value, and the estimated total volume of consumer claims. The Administrators consider that there is insufficient time by 11 June 2003 (in the case of Pan) and 12 June 2003 (in the case of the other VA companies) to make these assessments.

27 Similarly, there is the question of the more than 30 claims made by or on behalf of sponsors. Mr McGrath is uncertain as to the number of sponsors with which Pan currently has manufacturing contracts. The amount of the claims made are generally unspecified, but F H Faulding & Co Ltd has filed a proof of debt claiming that it is owed in excess of $43 million. The Administrators think that further claims by sponsors will be notified. The more than 30 notified to date are from sponsors located in Australia, Singapore, Malaysia and New Zealand.

28 F H Faulding & Co Ltd has already commenced a proceeding in the Supreme Court of Victoria against Pan for unliquidated damages arising from the alleged breach by Pan of a supply agreement.

29 In order to advise creditors in relation to claims by sponsors, the Administrators need to ascertain:

“(a) each of the sponsor supply agreements and the terms of each;

(b) which contracts, if any, may give rise to a claim by the sponsor against Pan;

(d) the estimated total value of claims from sponsors against Pan; and

(e) the likelihood of success of the claims which have been received or

notified.”

30 Mr McGrath states that the claims by consumers and sponsors will have a substantial impact on the total quantum of creditors’ claims. Based on initial estimates, he states that the total amount of claims made is likely to be in the order of $100 million. If the Administrators are unable to provide in their report a reasonable estimate of the total amount of contingent creditors’ claims, and of the likely amounts for which those claims ought to be admitted for proof, the Administrators will not be able to determine whether the amount, if any, put forward to be paid to creditors in any proposed deed of company arrangement is sufficient to justify the Administrators’ recommendation that creditors support it. Similarly, creditors will not be able to assess whether the amount put forward to be paid to them in any proposal for a deed of company arrangement is reasonable.

31 On or around 27 May 2003 Mr Selim’s solicitors advised Mr McGrath that Mr Selim intends to put forward a proposal for a deed of company arrangement. There has been correspondence between Mr Selim’s solicitors and the Administrators in relation to Mr Selim’s proposal. But Mr McGrath opines that it would be premature to put this proposal to creditors for consideration at present. In addition, he observes that Mr Selim’s proposal would need to be refined before it could be measured against other options and is too generalised to attract the Administrators’ support at present.

32 Mr McGrath observes that pursuant to subs 438B(2) of the Act, the directors of the VA companies were required within seven days of the commencement of the administration, or such further period as the Administrators might allow, to give to the Administrators a administrators a report about each VA company’s business, property, affairs and financial circumstances. The directors requested an extension of time and the Administrators granted an extension until 13 June 2003 – a date which will itself be outside the period in which the Administrators are presently required to convene the second meetings of creditors.

33 The committee of creditors comprises 25 members. The Administrators or their staff have telephoned persons representing the creditors to whom the largest amounts are owed to advise them of the present application. Mr McGrath says that he is advised that the following creditors, which represent approximately 62 percent in value (by proofs of debt lodged) of creditors on, or represented on, the committee of creditors, do not object to the proposed extension of 75 days:

(a) F H Faulding & Co Ltd;

(b) Pathway International Pty Ltd;

(d) Australian Pharmaceuticals Industries Limited; and

(e) Roche Vitamins Australia Pty Limited.

SUBMISSIONS MADE BY MR SELIM

34 Mr Selim’s submissions proceeded along the following lines.

35 It should be left to the creditors to decide at a meeting convened within the statutory period whether the second meeting of creditors should be adjourned, and, if so, for how long. Delay causes prejudice to creditors. The prejudice is not simply that resolution of their entitlements is delayed or that they are deprived of the use of money over time. Rather, delay may cause the businesses of particular sponsors to collapse, since their source of product has dried up. Delay will, therefore, tend to increase the amounts of the claims of sponsors. They are in a better position than the Administrators, or, indeed, the Court, to know where their best interests lie and how those interests are best protected.

36 The Administrators should present to the creditors at a meeting held in accordance with the régime stipulated in the Act, what the Administrators see as the options available at that time. Those options may well involve an “embryonic sale proposal” and an “embryonic deed of company arrangement proposal”. It would be a matter for the creditors to decide if they need more time to have the proposals fully fleshed out. Mr McGrath’s present favouring of a sale of Pan or the business does not stand well with the object of Part 5.3A which is, according to par 435A(a) of the Act, to “maximise the chances of the company, or as much as possible of its business, continuing in existence.”

37 Interest on the creditors’ claims and the likely increases in those claims would dwarf the costs thrown away of a meeting of creditors.

REASONING

38 Section 439A occurs within Part 5.3A of the Act, which is headed “Administration of the Company’s Affairs with a view to Executing a Deed of Company Arrangement”. The opening section in Part 5.3A is s 435A, which is as follows:

“The object of this Part is to provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b) if it is not possible for the company or its business to continue in existence – results in a better return for the company’s creditors and members than would result from an immediate winding up of the company.”

39 Section 439C states what the creditors may resolve at a meeting of creditors convened under s 439A. They may resolve:

“(a) that the company execute a deed of company arrangement specified in the resolution (even if it differs from the proposed deed (if any) details of which accompanied the notice of meeting); or

(b) that the administration should end; or

40 These three possibilities are reflected in the nature of the report and statements referred to in subs 439A(4) as documents which must accompany the notice of meeting to be given to creditors. That subsection requires that the notice of the meeting be accompanied by a copy of:

“(a) a report by the administrator about the company’s business, property, affairs and financial circumstances; and

(b) a statement setting out the administrator’s opinion about each of the following matters:

(i) whether it would be in the creditors’ interests for the company to execute a deed of company arrangement;

(ii) whether it would be in the creditors’ interests for the administration to end;

(iii)whether it would be in the creditors’ interests for the company to be wound up;

and his or her reasons for those opinions; and

41 Clearly, s 439C and subs 439A(4) show that an application by the administrators for an extension of time under subss 439A((1) and (6) is to be assessed by reference to whether an extension is necessary to enable the administrators to provide the report and statements and, in particular, to arrive at the opinion, referred to in subs 439A(4), in order to inform creditors adequately so that they will be in a position to choose one of the three courses identified in s 439C.

42 There is inevitably a tension between this objective and the broad aim of a speedy administration which underlies Pt 5.3A (senior counsel for the Administrators referred me to Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10]; Re Echuca Insured Housing Loans Pty Ltd (Administrator Appointed) v Lumsden, unreported, Supreme Court of Victoria, Harper J, 4 February 1994; and Re Tracker Software (Australia) Pty Ltd (Administrator Appointed) (1997) 24 ACSR 92 at 93, for judicial recognitions of that tension).

43 While I appreciate the force of the submissions put forward on behalf of Mr Selim, the lengthy and detailed evidence of Mr McGrath which I have summarised earlier persuades me that a further period of 75 days is needed if creditors are to have the benefit of the useful information and expressions of opinion from the Administrators which the Act intends that they have.

44 In the course of the hearing I raised with senior counsel for the Administrators the possibility that his clients may find that they are in a position to convene the meeting earlier than the five business day period referred to in subs 439A(2) of the Act. Whether this will transpire will depend principally on the result of the discussions with the TGA about renewal of Pan’s manufacturing licence. Senior counsel for the Administrators took instructions and informed the Court that if his clients are in a position to convene the meeting of creditors earlier, they will apply to the Court for an order under s 447A of the Act allowing the meeting to be advanced.

CONCLUSION

45 All the evidence being one way, the 75 day extension sought should be granted.

I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated: 16 June 2003

Counsel for Plaintiffs: Mr M B Oakes SC and Mr M Sloan

Solicitors for Plaintiffs: Blake Dawson Waldron

Counsel for Mr James Selim: Mr R Weber SC and Ms K Williams

Solicitors for Mr James Selim: Aitken McLachlan Thorpe

Date of Hearing: 6 June 2003

Date of Judgment: 6 June 2003

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