FEDERAL COURT OF AUSTRALIA

ABC Learning Centres Limited, in the matter of; application by Walker (No 4) [2008] FCA 1946

PETER WALKER & GREGORY MOLONEY (IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF ABC LEARNING CENTRES LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS & MANAGERS APPOINTED) & ORS, IN THE MATTER OF ABC LEARNING CENTRES LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS & MANAGERS APPOINTED)  and ORS

NSD 1780 of 2008

EMMETT J

27 NOVEMBER 2008

SYDNEY

IN THE MATTER OF ABC LEARNING CENTRES LIMITED & ORS,

ACN 079 736 664

THE COURT ORDERS THAT:

1.                  Order 1(a) made on 13 November 2008 be varied to read as follows:

(a)        as if section 436E of the Act read, in respect of each of the Second Plaintiffs, as if each of the following new subsections were inserted:

(5)        At any meeting of creditors of one of the ABC Group Companies convened under sub-section (1), the meeting may by resolution determine:

(a)        whether to appoint a committee of creditors for the ABC Group Companies; and

(b)        if so, who, up to a maximum of 15  persons, are to be the members of such committee.

(6)        In this Part 5.3A (and in section 9 of this Act insofaras definitions are relevant to Part 5.3A):

ABC Group Companies means each of the Second Plaintiffs in proceeding No NSD 1780 of 2008 in the Federal Court of Australia;

ABC Group Committee means the Committee appointed under a resolution referred to in sub-section (5)

committee of creditors means, in respect of each of the ABC Group Companies, the ABC Group Committee

2.                  The resolution of creditors of the Second Plaintiffs passed at the meeting of creditors convened pursuant to section 436E of the Act, and held on 18 November 2008, appointing 15 persons to the ABC Group Committee (as defined in Order 1(a) above) is a valid resolution which takes effect pursuant to the orders made on 13 November 2008 as varied by order 1 above.

3.                  The costs and expenses of this application be costs and expenses of the administration of the Second Plaintiffs.

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

Schedule 1

All in Administration and with Receivers and Managers Appointed

IN THE MATTER OF ABC LEARNING CENTRES LIMITED & ORS,

ACN 079 736 664

REASONS FOR JUDGMENT

1                     On 13 November 2008, the Court made orders, pursuant to s 447A(1) of the Corporations Act 2001 (Cth) (the Act), concerning the operation of s 436E of the Act, in relation to the second plaintiffs (see ABC Learning Centres Limited, in the matter of; application by Walker (No 3) [2008] FCA 1945).  At the meeting of creditors held on 18 November 2008, pursuant to s 436E, the Chairman sought nominations to the proposed ABC Group Committee, which, as contemplated by the orders made on 13 November 2008, was to be comprised of 10 creditors. 

2                     However, after the Chairman had received more than 10 nominations for the ABC Group Committee, a resolution was proposed that the creditors wish the ABC Group Committee to be comprised of 15 members.  The resolution also directed that the first plaintiffs (the Administrators) approach the Court seeking to vary the orders made on 13 November 2008, so as to permit the ABC Group Committee to consist of 15 members.  The resolution was proposed and seconded and was carried on the voices. 

3                     The Chairman then proposed a resolution that, upon the Court’s varying the orders of 13 November 2008 to permit the ABC Group Committee to be comprised of 15 creditors, the 15 nominated creditors be the members of the ABC Group Committee.  The resolution also proposed that, until such time as the Court made such an order, the first ten names comprise the Committee.  There has been no meeting of the ABC Group Committee since the meeting on 18 November 2008, and therefore it is not necessary to take account of the second aspect of the resolution.

4                     The Administrators previously suggested to the Court a limit of 10 members of the ABC Group Committee in order to permit efficient working of the ABC Group Committee.  However, the Administrators are of the opinion that a Committee of 15 is also workable.  The Administrators have applied to the Court for a variation of the order made on 13 November 2008, to permit the ABC Group Committee to be comprised of 15 members and for an order confirming the validity of the resolution that was passed.  In the circumstances, I consider it is appropriate to make the orders sought.

Associate:

Dated:         13 January 2009