Federal Court of Australia

Park (Deed Administrator), in the matter of Ellume Limited (Subject to Deed of Company Arrangement) (No 2) [2023] FCA 593

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 1322(4)(d) or in the alternative s 447A of the Corporations Act 2001 (Cth) (the “Act”) and s 90-15 of the Insolvency Practice Schedule (Corporations) being in Schedule 2 of the Act that:

(a)    a meeting of creditors of the second applicant be convened on 9 June 2023 (the “Meeting”);

(b)    the time for giving notice of the Meeting to creditors of the second applicant required under r 75-20 of the Insolvency Practice Rules (Corporations) 2016 (Cth) be abridged so that it shall be sufficient to give notice by 6.00 pm on 6 June 2023;

(c)    notice of the Meeting is to be in the form annexed to the affidavit of Joanne Emily Dunn sworn on 6 June 2023 (“Notice”) and provided in accordance with Order 2 below.

2.    The Notice is to be given to creditors of the second applicant by taking the following steps as soon as practicable, but by no later than 6.00 pm on 6 June 2023:

(a)    where the first applicants have an email address for a creditor, by sending the Notice by email to each such creditor, irrespective of whether the creditor has nominated to receive electronic notifications of documents in accordance with s 600G of the Act;

(b)    where the first applicants do not have an email address for a creditor but do have a postal address for that creditor, by causing the Notice to be sent via express post;

(c)    by publishing the Notice on the website maintained by the applicants at https://www.fticonsulting.com/creditors/ellume-limited.

3.    The costs of and incidental to this application be costs and expenses in the deed administration of the second applicant.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Revised from Transcript)

DOWNES J:

1    This is an urgent application brought by the first applicants (the deed administrators) seeking an abridgment of time to give notice of a meeting of creditors of the second applicant (Company) to be held pursuant to s 445A of the Corporations Act 2001 (Cth) (the Act) to enable the creditors to vote on a resolution to amend cl 1.1 of a Deed of Company Arrangement (the DOCA).

2    Some background to the administration is contained in the earlier decision of Park (Administrator), in the matter of Ellume Limited (Administrators Appointed) v Evangayle Pty Ltd (Trustee) [2022] FCA 1102. Further background is contained in the decision of Park (Deed Administrator), in the matter of Ellume Limited (Subject to Deed of Company Arrangement) [2023] FCA 374 (first DOCA decision).

3    I refer in particular to [3], [4], [5], [6], [7] and [9] of the first DOCA decision. In these reasons, I will adopt the definitions from that decision.

4    On the last occasion that this matter came before the Court on 21 April 2023, orders were made in a similar form to those which are sought today. As a result of those orders, a meeting was held on 28 April 2023 at which creditors of the Company approved the further amendment of the Long Stop Date in the DOCA to 9 June 2023.

5    Hough and the deed administrators agreed to a further extension to the “End Date” and a partial and conditional waiver of certain obligations under the proposal to vary the DOCA. I interpolate that End Date is a defined term in the DOCA, which does not arise until after the satisfaction or waiver of conditions precedent.

6    On 17 May 2023, Hough and the deed administrators agreed to a further extension to the End Date and a partial and conditional waiver of certain obligations under the proposal to vary the DOCA.

7    On 31 May 2023, Hough and the deed administrators agreed to a further extension to the End Date and a partial and conditional waiver of certain obligations such that the End Date is due to expire at 4:00 pm on Wednesday, 7 June 2023, which is tomorrow.

8    On 2 June 2023, the deed administrators were put on notice of Hough’s intention to request an extension on the Long Stop Date.

9    On 5 June 2023, the deed administrators received a request from Hough to vary the terms of the DOCA, namely, the definition of the Long Stop Date to 14 July 2023 on the basis that Hough had entered into binding financial agreements to fund the Contribution Amount in order to attend to completion.

10    Later on 5 June 2023, the deed administrators received a revised request from Hough to vary the terms of the DOCA, by varying the definition of the Long Stop Date to 14 July 2023 and by varying the definition of “Short Term Funders”.

11    Further detail of the proposed variations is contained in the proposed notice convening a meeting of creditors to consider these variations, which is annexure JED-3 to the affidavit of Ms Joanne Emily Dunn sworn on 6 June 2023.

12    Pursuant to clause 15.1 of the DOCA, the definitions can only be varied by a resolution passed at a meeting of creditors of the Company, convened in accordance with Div 75 of the Insolvency Practice Schedule (being Schedule 2 to the Act).

13    It remains the opinion of the deed administrators that the effectuation of the DOCA is in the best interests of creditors for the reasons explained in [10] of the first DOCA decision.

14    Based on these reasons, I am satisfied that the opinion of the deed administrators, being that the effectuation of the DOCA is in the best interests of creditors, is a justified one and supports the orders which are sought today. In particular, it is appropriate to abridge the time for service of a notice of meeting of creditors under r 75-20 of the Insolvency Practice Rules (Corporations) 2016 (Cth) to allow for a meeting of creditors to be convened on 9 June 2023, with service of the notice to occur as soon as practicable, but no later than 6:00 pm today (6 June 2023) in order for a vote to take place as required by the DOCA.

15    This is so notwithstanding that r 75-20 of the Insolvency Practice Rules would otherwise require that 10 business days be given for the meeting to be held. I am satisfied that if such notice was given in this case, then the meeting would be futile, as the DOCA would have automatically terminated.

16    I am therefore satisfied that it is appropriate to make the order in paragraph 1 of the draft order provided by the applicants, with certain modifications.

17    Applying the same reasoning as contained in the first DOCA decision, I am also satisfied that it is appropriate to make an order in accordance with paragraph 2 of the draft order including with a modification that I canvassed with Ms Conway of counsel and which was accepted by the applicants.

18    The final order sought was that the costs of and incidental to this application be costs and expenses in the deed administration of the Company. Again, that is an appropriate order in the circumstances.

Associate:

Dated:    6 June 2023