Federal Court of Australia

Park, In the matter of IG Power (Callide) Pty Ltd (Administrators Appointed) (No 7) [2025] FCA 808

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 198G(3)(b) of the Corporations Act 2001 (Cth) (Corporations Act), approval be granted to the directors of the Third to Fifth Plaintiffs to cause the Third to Fifth Plaintiffs to execute and enter into the following documents:

(a)    “Facility Agreement” on substantially the same terms as that document contained in Confidential Exhibit JRP-24 to the affidavit of John Richard Park affirmed 23 April 2025 (Park Affidavit);

(b)    “General Security Deed” on substantially the same terms as that document contained in Confidential Exhibit JRP-24 to the Park Affidavit;

(c)    “Parent Company Guarantee” on substantially the same terms as that document contained in Confidential Exhibit JRP-24 to the Park Affidavit;

(d)    “Payment Directions Deed” on substantially the same terms as that document contained in Confidential Exhibit JRP-24 to the Park Affidavit; and

(e)    a Utilisation Request (under and as defined in the Facility Agreement) in respect of the First Utilisation (under and as defined in the Facility Agreement) (as referred to in Order 4(b)(i)) and any necessary direction under clause 2.18 of the Facility Agreement;

(f)    a Utilisation Request (under and as defined in the Facility Agreement) in respect of the Refinance Utilisation (under and as defined in the Facility Agreement) (as referred to in Order 4(b)(ii));

(g)    Deeds of Access, Indemnity and Insurance between Sev.en Global Investments a.s., IG Power Holdings Limited, IG Power (Callide) Ltd, IG Power Marketing Pty Ltd on the one hand, and each of Mark Sykes, Petr Slechta, John Fitzgerald and Richard Grant Wrightson on the other, in the form tendered as Confidential Exhibit 4,

together, the Recapitalisation Transaction Documents.

Extension of the Convening Period

2.    Pursuant to s 447A of the Corporations Act, Pt 5.3A of the Corporations Act is to operate in relation to the Third to Fifth Plaintiffs as if, notwithstanding the provisions in s 439A of the Corporations Act, the convening period of the Third to Fifth Plaintiffs was the period up to and including 22 May 2025.

3.    Pursuant to s 447A of the Corporations Act, Pt 5.3A of the Corporations Act is to operate in relation to the Third to Fifth Plaintiffs as if, notwithstanding the provisions in s 439A of the Corporations Act, the second meeting of the creditors of the Third to Fifth Plaintiffs required under s 439A of the Corporations Act may be convened and held at any time during, or within 5 business days after, the convening period as extended under Order 2 above, provided that the Administrators give notice of the meeting to creditors of the Third to Fifth Plaintiffs at least 5 business days before the meeting.

End of Administrations of the Third to Fifth Plaintiffs

4.    Pursuant to s 447A of the Corporations Act, the administrations of each of the Third to Fifth Plaintiffs is to end immediately upon all of the following having occurred (with the intent that the administrations of the Third to Fifth Plaintiffs will come to an end once the last of the following has occurred):

(a)    the Recapitalisation Transaction Documents referred to in Orders 1(a) to 1(d) and 1(g) above are executed and exchanged by the parties to those documents and become effective in accordance with their terms;

(b)    the issuance of signed Utilisation Requests referred to in Orders 1(e) and 1(f) above in respect of the following Utilisations (each under and as defined in the Facility Agreement):

(i)    the First Utilisation; and

(ii)    the Refinance Utilisation.

(c)    delivery to the First Plaintiffs of evidence that the Defendant has paid or caused to be paid the Creditor Claims (under and as defined in the Facility Agreement) to the bank accounts nominated by the relevant creditors; and

(d)     the Defendant provides an undertaking to the Court in the form outlined in Orders 11 to 13 below,

provided that all of the steps in Orders 4(a) to 4(d) above occur before 5:00 pm AEST on the day that is 14 days from the date of the Court’s orders, otherwise this Order 4 will be automatically vacated.

5.    Pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) (IPSC), being Schedule 2 to the Corporations Act, the First Plaintiffs are justified in:

(a)    taking steps to implement the recapitalisation recorded in the Recapitalisation Transaction Documents;

(b)    removing the directors of each of the Third to Fifth Plaintiffs pursuant to s 442A(a) of the Act and causing the New Directors (as defined in paragraph 65 of the Park Affidavit) to be appointed as directors to each of the Third to Fifth Plaintiffs pursuant to s 442A(b) of the Act as a step in connection with the recapitalisation recorded in the Recapitalisation Transaction Documents; and

(c)    seeking the orders contemplated in Order 4 to bring an end to the Administrations of each of the Third to Fifth Plaintiffs on the basis that each of the Third to Fifth Plaintiffs are solvent in the circumstances.

Administrators’ Remuneration

6.    Pursuant to s 60-10(1)(c) of the IPSC, that the First Plaintiffs’ remuneration be fixed in the amounts indicated below:

(a)    The remuneration of the First Plaintiffs as administrators of the Third Plaintiff be fixed in the amount of $83,519.15 (inclusive of GST);

(b)    The remuneration of the First Plaintiffs as administrators of the Fourth Plaintiff be fixed in the amount of $115,240.40 (inclusive of GST); and

(c)    The remuneration and disbursements of the First Plaintiffs as administrators of the Fifth Plaintiff be fixed in the amount of $6,229,322.88 (inclusive of GST).

7.    Compliance with r 9.2 of the Federal Court (Corporations) Rules 2000 (Cth) be dispensed with.

Confidentiality Orders

8.    Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (FCA Act), on the ground stated in s 37AG(1)(a), being that the order is necessary to prevent prejudice to the proper administration of justice:

(a)    Confidential Exhibit JRP-24 to the Park Affidavit;

(b)    Confidential Exhibit JRP-25 to the Park Affidavit;

(c)    Confidential Exhibit PS-2 to the affidavit of Petr Šlechta affirmed on 22 April 2025 (Šlechta Affidavit);

(d)    confidential Exhibit PS-3 to the Šlechta Affidavit (only insofar as it refers to the Parent Company Guarantee at pages 6 to 12);

(e)    Confidential Exhibit 4;

(f)    those parts of the Park Affidavit and the Šlechta Affidavit, and the Genuity submissions dated 28 April 2025, that are shaded in grey; and

(g)    the written submissions relied upon by the Plaintiffs and, if applicable, the Defendant on this application to the extent they refer to the content of Confidential Exhibit JRP-24, Confidential Exhibit JRP-25, Confidential Exhibit PS-2 to the Šlechta Affidavit and Confidential Exhibit PS-3 (only insofar as it refers to the Parent Company Guarantee) to the Šlechta Affidavit or those parts of the Park Affidavit and the Šlechta Affidavit that are shaded in grey,

be kept confidential and not be provided or disclosed to any person other than:

(h)    any Judge of this Court, and that Judge’s staff and assistants;

(i)    the Plaintiffs and their legal representatives;

(j)    the Defendant and its legal representatives; and

(k)    except in relation to confidential Exhibit PS-2 to the Slechta Affidavit and the redacted material in the Park Affidavit and Slechta Affidavits served on the legal representatives for Genuity Pty Ltd (Genuity) on 24 April 2025, the legal representatives of Genuity.

9.    Subject to further order, pursuant to s 37AJ(1) of the FCA Act, Order 8 is to operate for two years from the date of the order.

THE COURT NOTES That:

10.    The transaction the subject of the Recapitalisation Transaction Documents referred to in Order 1 above is a transaction entered into under an order of the Court for the purpose of s 437D(2)(c) of the Corporations Act.

11.    The Defendant undertakes to the Court and to the First Plaintiffs that it will pay or cause to pay the “Creditor Claims” (as defined in the Facility Agreement, being the document substantially in the form contained in Confidential Exhibit JRP-24 to the Park Affidavit (Facility Agreement)) to the creditors of the Third to Fifth Plaintiffs in accordance with Schedule 1 of the Facility Agreement within 14 days after receipt of a Utilisation Request in respect of the First Utilisation (under and as defined in the Facility Agreement).

12.    The Defendant undertakes to the Court and to the First Plaintiffs that it will:

(a)    within 14 days from entry of the orders made in this proceeding, cause the Fifth Plaintiff, or its legal advisers, to write to Genuity, or its legal advisers, outlining the particulars of its dispute as to the amount of the “Disputed Claim” (as defined in the Facility Agreement);

(b)    during the 3 months from the “Commencement Date” (as defined in the Facility Agreement), or such longer period as agreed between Genuity and the Fifth Plaintiff, cause the Fifth Plaintiff to use reasonable endeavours to agree with Genuity the amount to be paid to Genuity in satisfaction of the “Disputed Claim” (as defined in the Facility Agreement);

(c)    if no mutual agreement can be reached with Genuity, cause the Fifth Plaintiff to commence proceedings seeking a declaration (or other appropriate relief) as to the amount of the “Disputed Claim” (as defined in the Facility Agreement) before the date that is 3 months after the “Commencement Date” (as defined in the Facility Agreement), or such longer period as is agreed between the Fifth Plaintiff and Genuity (Specified Date); and

(d)    within 28 days of reaching agreement with Genuity or the entry of a final binding order (including any appeal) in respect of the “Disputed Claim”, pay or cause the Fifth Plaintiff to pay the determined amount to Genuity; and

(e)    if no agreement can be reached with Genuity and no proceedings are commenced before the Specified Date, pay or cause the Fifth Plaintiff to pay the amount of the “Disputed Claim” as claimed by Genuity to Genuity within 28 days of the Specified Date.

13.    The Defendant undertakes to the Court and to Genuity that it will not cause nor take any steps to cause IGPC to enforce IGPC’s entitlement to the TFA Receivable (as defined in the letter from Quinn Emanuel to Johnson Winter Slattery dated 19 April 2025):

(a)    for a period of three (3) months from the date of any orders made by the Court terminating the administration of IGPC as a result of the Recapitalisation Proposal; or

(b)    before the date that proceedings are commenced in relation to the Disputed Claim in accordance with the Disputed Claim mechanism,

whichever is the earlier.

Other orders

14.    Any person who can demonstrate a sufficient interest to discharge or modify these orders has liberty to apply on 3 business days’ written notice to the Plaintiffs, the Defendant and the Court.

15.    The Administrators and the Defendant have liberty to apply on 1 business days’ notice, specifying the relief sought.

16.    The Plaintiffs’ costs of and incidental to this application are to be treated as costs in the administration of the Third to Fifth Plaintiffs and be paid out of the assets of the Third to Fifth Plaintiffs.

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

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    By an interlocutory process filed on 23 April 2025, Messrs Park and Campbell, being the joint and several administrators (the Administrators) of the IG Power Group (comprising IG Power (Callide) Ltd (administrators appointed) (IGPC), IG Power Holdings Limited (administrators appointed) (IGPH), IG Energy Holdings (Australia) Pty Ltd (IGEH) and IG Power Marketing Pty Ltd (IGPM)), seek orders pursuant to:

(1)    section 447A of the Corporations Act 2001 (Cth) (the Corporations Act) that the administrations of IGPC, IGPH and IGPM (the Recapitalisation Companies) be brought to an end (on the basis that those companies will be “solvent” upon the implementation of a recapitalisation transaction proposed by Sev.en Global Investments a.s. (Sev.en));

(2)    section 90-15 of the Insolvency Practice Schedule (Corporations) (the IPSC) that the Administrators are justified in their decision to replace the existing board of directors of the Recapitalisation Companies (being appointees of IGPC’s former indirect holding company, Genuity Pty Ltd (Genuity)) with a board of directors appointed by Sev.en;

(3)    section 198G of the Corporations Act that such “new” directors of the Recapitalisation Companies are approved to execute and enter the necessary recapitalisation documents;

(4)    section 447A of the Corporations Act that the convening period of the Recapitalisation Companies be extended up to, and including, 22 May 2025 (in order to permit the steps required to effect the relevant recapitalisation to be completed); and

(5)    section 90-15 of the IPSC that the Administrators are justified in implementing the recapitalisation transaction on its terms and, ultimately, seeking orders to bring the administrations of the Recapitalisation Companies to an end;

(together, the Recapitalisation Proposal Orders),

(6)    section 60-10 of the IPSC that the Administrators’ remuneration in respect of the Recapitalisation Companies be fixed (the Remuneration Orders); and

(7)    section 37AF of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act) that certain documents be kept confidential (the Confidentiality Orders).

2    The panoply of orders sought by the Administrators endeavour to bring an end to the long running and complex administrations of the IG Power Group: see, most recently, Park, In the matter of IG Power (Callide) Pty Ltd (Administrators Appointed) (No 6) [2025] FCA 556 (Park No 6): by returning the Recapitalisation Companies to the control of new directors in a position of solvency. While IGEH is not one of the Recapitalisation Companies, Mr Park, in an affidavit filed 23 April 2025 (the Park Affidavit), deposes to intending to convene a second meeting of creditors of that entity with the recommendation that it be returned to its directors.

3    It may be briefly noted that all creditors of the IG Power Group have been notified of the current application. Only Genuity sought to appear at the hearing in April 2025 and leave was granted for that purpose. Otherwise, no other creditor has indicated any intention to appear or be heard.

The Recapitalisation Proposal Orders

Short context: The Recapitalisation Proposal and the Transaction Documents

4    The Administrators received a recapitalisation proposal from Sev.en on 28 March 2025 (the Recapitalisation Proposal): see generally Park No 6 [5] – [6]. In broad and general terms, it contemplates Sev.en providing a finance facility to the Recapitalisation Companies. Its terms are recorded within a suite of interrelated transaction documents (the Transaction Documents) including, relevantly, a facility agreement between (a) Sev.en, Sev.en Global Investments Pty Ltd, Sev.en Gamma a.s., Sev.en US Met Coal, Inc. and Sev.en Global Investments U.K. Ltd (as lenders); and (b) the Recapitalisation Companies (as borrowers) (the Facility Agreement). The following observations may be made vis-à-vis the content and form of that agreement.

5    First, it is, in the words of Mr Keane KC for the plaintiffs, “[t]he key transaction document”. Under it, the lenders agree to make available, to the borrowers, a facility that is to be used for purposes related to, inter alia, (a) refinancing the administration funding provided by Sev.en to date; (b) financing the payment of specific creditors’ claims defined in the agreement; (c) financing the payment of a disputed creditor claim (with Genuity); (d) financing the payment of the Administrators’ liabilities and remuneration; and (e) working capital and operating costs.

6    Second, shortly after the execution of the Facility Agreement, the Recapitalisation Companies must, amongst other things, (a) request a loan from the lenders in an amount equal to, in effect, the total value of the claims of unsecured creditors of IGPC and IGPM (excluding any related party and disputed claims); and (b) issue a utilisation (the Refinance Utilisation) in respect of an amount equal to those amounts owing to Sev.en under existing administration funding deeds between it and IGPC.

7    Third, the Recapitalisation Companies may only request a loan under the Facility Agreement for the purposes of paying a claim by Genuity against IGPC (in respect of some $71m advanced by the former to the latter) (the Disputed Claim) in circumstances where (a) an agreement is reached between IGPC and Genuity as to the value of the Disputed Claim; (b) final orders are made by a court vis-à-vis the Disputed Claim; or (c) IGPC determines otherwise. The Disputed Claim is of some moment in the present application and should not be quickly forgotten.

8    The Transaction Documents also comprise a deed poll (the Deed Poll Guarantee). It is granted by Sev.en, in favour of Genuity, and is, to adopt the language of the plaintiff’s written outline, aimed at ensuring that Genuity has a basis to claim directly against Sev.en (cf IGPC) in relation to the Disputed Claim (up to a maximum amount of some $47.5m). More specifically, by the Deed Poll Guarantee, Sev.en guarantees the performance, by IGPC, of its obligation to pay to Genuity any amount which is, in substance, (a) agreed between Genuity and IGPC; (b) claimed by Genuity if no legal proceedings have been commenced within three months of the date of the Deed Poll Guarantee; or (c) determined by the Court in any proceeding commenced within three months of the date of the Deed Poll Guarantee (up to a maximum of some $47.5m).

9    Other relevant documents include:

(1)    a security deed (by which IGPH and IGPM grant security to secure performance of the obligations of the Recapitalisation Companies under the Facility Agreement); and

(2)    the Payment Directions Deed (under which the Recapitalisation Companies and Sev.en agree that the amount of the Refinance Utilisation will be immediately applied to, and set off against, amounts owing to Sev.en under funding deeds previously entered into).

The Administrators’ views (and the Disputed Claim)

10    In a solvency report dated 23 April 2025 (the Solvency Report), Mr Park outlines the view that:

In my opinion, the Recapitalisation Proposal put forward by [Sev.en] will result in the [Recapitalisation] Companies becoming solvent. That is, it appears the Companies will be able to pay all of their debts as and when they become due and payable.

Several “key reasons” undergird that conclusion, including, as per Mr Keane KC, the fact that:

(a)    the effect of the Facility Agreement is to provide sufficient funds for the Recapitalisation Companies to immediately pay all of their due and payable debts and the costs of the administrations …;

(b)    IGPC is able to borrow funds to pay the Disputed Claim prior to any agreement between Genuity and IGPC, or any court determination of that claim, if it determines to do so, and for working capital purposes …;

(c)    based on a projected surplus of funds available following the repayment of immediate liabilities, IGPC would be able to discharge the Disputed Claim, and still have sufficient liquidity in the following 12 months …;

(d)    based upon the administrators’ cash flow forecast, IGPC will generate sufficient cash flows to meet ongoing trading liabilities as and when they are due for at least the next 12 months …; and

(e)    Sev.en is the sole shareholder of IGPH, which in turn is the sole shareholder of IGPC. The administrators understand that Sev.en is an entity of substance, and that it has an ongoing interest to support IGPC and IGPH to preserve any equity value. It therefore seems plausible to the administrators that IGPC and IGPH could rely on additional financial support being provided by Sev.en as required to support their solvency …

11    Self-evidently, the views of Mr Park rest, in part, upon the indebtedness of the Recapitalisation Companies to Genuity, and the circumstances in which the Disputed Claim might be paid. The total value of that claim is some $71m; however, it appears to be agreed inter partes, that a tax offset of some $41m applies. Once contractual interest is added to the post-set off amount, the Disputed Claim is worth, at least on the Administrators’ estimation, approximately $47.7m.

12    The extent to which the value of the Disputed Claim incorporates any such interest is disputed. It is understood “Sev.en disputes the Disputed Claim on the basis that the amount was advanced by Genuity by way of an equity contribution rather than as a debt, and that interest may not be payable on the claim”. Against that, it is said “Genuity does not contend that interest is due on the amounts loaned, rather the further accruing amounts are “reasonable fees, costs, charges and expenses” incurred by Genuity … and are recoverable under [relevant loan agreements]”. It is not possible to resolve the extent to which the Recapitalisation Companies are indebted to Genuity at the present juncture. However, it is to be noted that the Administrators have, very properly, assessed the solvency of the Recapitalisation Companies under the assumption that it owes Genuity the full value of the Disputed Claim (that is, inclusive of “interest” ($47.7m)).

13    It may also be noted that the full value of the Disputed Claim ($47.7m) is somewhat congruous with the amount guaranteed under the Deed Poll Guarantee ($47.5m). That is neither here nor there in circumstances where there is a sufficient surplus in the Recapitalisation Companies to pay that difference (should the Deed Poll Guarantee be called upon in full).

Commercial effect of the Recapitalisation Proposal

14    The commercial effect of the Recapitalisation Proposal will, undoubtedly, be rather substantial. Examples given by the plaintiff in its written outline of submissions include that:

(a)    the claims of all creditors of the Recapitalisation Companies, except for the Disputed Claim, will be paid directly by the lenders under the Facility Agreement;

(b)    in relation to the Disputed Claim …, IGPC will have available to it a facility from the lenders upon which IGPC can, in its discretion, draw down to pay the Disputed Claim with Genuity …, as well as a structured regime to resolve that Disputed Claim by agreement within 3 months (or such longer period as agreed between IGPC and Genuity) or else commence proceedings to resolve it …;

(c)    Genuity will also have the benefit of the Deed Poll Guarantee, directly enforceable against Sev.en in respect of the Disputed Claim …;

(d)    the pre-existing administration funding which Sev.en has extended to IGPC will be refinanced under the Facility Agreement and repaid pursuant to that agreement and the Payment Directions Deed;

(e)    the Recapitalisation Companies will be able to access the facility under the Facility Agreement to pay the administrators’ liabilities and remuneration (as determined by the Court); and

(f)    the Recapitalisation Companies will have available to them the ability to draw down on the facility under the Facility Agreement to pay working capital, operating costs and expenditure reasonably incurred in the ordinary course of their business.

General propositions as to the cessation of an administration and solvency

15    The Court may, pursuant to s 447A(1) of the Corporations Act, order that the administration of a company be brought to an end if it is satisfied that the company is “solvent”: s 447A(2)(a) of the Corporations Act; see In the matter of Keybridge Capital Limited (No 2) [2025] NSWSC 354 [17] (Keybridge). A company is solvent if, and only if, it is able to pay all its debts, as and when they become due and payable: s 95A(1) of the Corporations Act. It is not controversial that that definition enshrines a “cash flow” test of insolvency, which is directed to the income sources available to the relevant company and the expenditure obligations that it has to meet, rather than a “balance sheet” test, which focuses upon the value of the Company’s assets and liabilities reflected in the company’s books (though the latter test can very well provide context for the application of the former): In the Matter of Ashington Bayswater Pty Ltd (In Liq) [2013] NSWSC 1008 [3], citing Southern Cross Interiors Pty Ltd (in liq) v Deputy Commissioner of Taxation (2001) 53 NSWLR 213. That is, the focus of the test of insolvency prescribed by s 95A(1) is the liquidity and viability of the business of the company: see Crema (Vic) Pty Ltd v Land Mark Property Developments (Vic) Pty Ltd (2006) 58 ACSR 631, 652 [141].

16    Whether a company is able to pay its debts “as and when they become due and payable” is a question of fact to be ascertained objectively and from consideration of the company’s position taken as a whole, including the nature of its assets and business, having regard to “commercial realities” and common sense: see, eg, Smith (in his capacity as liquidator of ACN 002 864 002 Pty Ltd (in liq) (formerly known as Petrolink Pty Ltd)) v Boné (2015) 104 ACSR 528, 533 – 534 [25]. In Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88 (Anchorage Capital Masters), the New South Wales Court of Appeal framed the test as follows (at [244]):

The test is concerned with present inability to pay all debts, as and when they become due and payable. A company is insolvent only when it is unable to pay its debts as and when they fall due. His Honour rightly recorded that it was uncontroversial that the test of insolvency is prospective, so the question is not simply whether the company can pay debts falling due at or around the date the question arises, but whether, as at that date, it can pay debts falling due in the future; that how far into the future the Court should look is a question to be answered having regard to the particular facts of the case; and that normally, a court will not look far into the future because there are so many unknowns and contingencies, though sometimes it may be appropriate to do so.

(Emphasis in original).

17    That analysis invites, where appropriate, the consideration of loans from related parties where the evidence discloses that, as a matter of commercial reality, such parties are likely to continue to provide finance: see Canstruct Pty Ltd v Project Sea Dragon Pty Ltd (Subject to a Deed of Company Arrangement) (No 4) (2024) 172 ACSR 73, 106 [145]. In that assessment, the most important consideration is the degree of commitment to the continuation of financial support: see Williams (as liquidator of Scholz Motor Group P/L (in liq)) v Scholz [2008] QCA 94 [110]. Indeed, if the provision of funds cannot be compelled by legal arrangement, there must be a degree of assuredness that the financial support will be forthcoming and at such a level that one could say that the company was able to pay its debts (rather than possibly being able to do so): see Chan v First Strategic Development Corporation Limited (in liq) [2015] QCA 28 [43] – [44]. Of course, the emphasis is upon the commercial reality of the situation, not “belief in a fairy godmother”: Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 1042 [43].

The appropriateness of the Recapitalisation Proposal Orders

Will the Recapitalisation Companies be solvent upon implementation of the Recapitalisation Proposal, such that it is appropriate for their administrations to be brought to an end?

18    It is said that the Recapitalisation Companies will be “solvent” upon the implementation of the Recapitalisation Proposal. That is, on and from the execution and entry into the Transaction Documents, the Recapitalisation Companies will be able to pay their due and payable debts, including the Disputed Claim. The logic that undergirds such conclusion is detailed within the Solvency Report and has been excerpted above. To that, several observations might be added.

19    First, the Solvency Report deals carefully with the payment of creditors and affords attention to the Disputed Claim. Second, that report undertakes an analysis of the monthly closing cash position of the Recapitalisation Companies between May 2025 and June 2026. That analysis seemingly assumes that the Disputed Claim is not paid, and identifies a “base case” (reflective of business as usual) and “downside case” (which, in effect, assumes a 10% decline in revenue). Third, the Solvency Report concludes, even accounting for such a “downside case”, that IGPC (being the Recapitalisation Companies’ main operating entity) will have sufficient liquidity to meet all claims (including the Disputed Claim) for the next 12 months. In circumstances such as the present, it is appropriate to give a not insubstantial degree of weight to such opinion.

20    On behalf of Genuity, it was suggested that, on the current state of the Solvency Report, there was insufficient certainty that the Disputed Claim would be paid by IGPC at the time it became due and payable. Such concern was said to flow from the fact the Administrators, in assessing the monthly closing cash position of the Recapitalisation Companies, had “adopted the amount of the [Disputed Claim] as it stands today as a fixed amount over the following 13 months” without accounting for further amounts that would accrue upon the valuation of the claim: “Put simply, on the downside case and allowing for further amounts payable to Genuity after today, there is doubt as to IGPC’s solvency”. This concern was said to be buttressed by the fact that (a) the Solvency Report did not go beyond June 2026; (b) the Facility Agreement obliged the Recapitalisation Companies to repay the facility after that date (albeit, prima facie, shortly after that date); and (c) it was uncertain when the Disputed Claim would be agreed or determined.

21    Although there is legitimate force in that concern, it does not dispel the conclusion that it is sufficiently likely that the Recapitalisation Proposal will imbue the Recapitalisation Companies with sufficient funding to pay those debts that are then due and payable (including the Disputed Claim). The position of Genuity is, to adopt the language of the Court in Anchorage Capital Masters, couched in too many “unknowns and contingencies” (e.g., Will the “downside case” come to pass? What is the true valuation of the Disputed Claim? Will the parties to the Facility Agreement agree to extend the date for repayment of the relevant facility (as contemplated by that agreement)? etc). Solace may be taken in the fact that Sev.en is a substantial entity with a substantial portfolio of investments in operating resources and energy assets globally. It is part of the group of companies behind the Recapitalisation Proposal and, therefore, has a significant interest in the success of the Recapitalisation Companies. That is, having invested hundreds of millions of dollars under the Facility Agreement, it is unlikely, on any objective view, to allow those companies to fail in relation to any shortfall that might arise in the current financing process. Au contraire, it is likely to step in to preserve its current investment if that be required.

22    Therefore, and not without some slight hesitation, I am satisfied, having regard to the reasoned opinions of the Administrators and the Solvency Report, that the Recapitalisation Companies will, upon entry into the Transaction Documents, be able to pay their due and payable debts.

23    It is noted that the Administrators seek to ensure that the administrations of the Recapitalisation Companies only come to an end when they are solvent. For that reason, the orders terminating the administrations of the Recapitalisation Companies have been drafted to be conditional upon the occurrence of pre-defined events, namely the (a) execution and exchange of the Transaction Documents (and their entry into force); (b) issuance of signed utilisation requests (e.g., vis-à-vis the Refinance Utilisation); (c) making available of funds to pay, and provision of evidence Sev.en has paid, or caused to be paid, all relevant creditors; and (d) provision of undertakings by Sev.en to the Court in relation to its primary obligations under the relevant documents, including in relation to the Disputed Claim. If those steps are not observed, then, necessarily and absent further order, the administrations of the Recapitalisation Companies will continue.

24    Given that I am satisfied that the Recapitalisation Proposal will likely place the Recapitalisation Companies in a position of solvency, there is no need to address, in any real detail, whether the deferral of payment of the Disputed Claim founds a reason to refrain from making orders that bring the administrations to an end. The evidence sufficiently establishes the Recapitalisation Companies will have immediate and unconditional access to funds to pay the Disputed Claim, in full, if it is due and payable. Whether that claim is paid in the near future, or litigation is required to resolve it, is a matter for the new directors of the Recapitalisation Companies (after the administration ends): see Keybridge [85]. To that, it may be observed that Sev.en has also agreed to provide the Deed Poll Guarantee in favour of Genuity vis-à-vis the Disputed Claim.

25    The foregoing findings almost ineluctably mean that the Recapitalisation Companies should be removed from administration pursuant to s 447A of the Corporations Act. That is particularly so where such course would lead to the satisfaction of the claims of nearly all creditors and the Recapitalisation Companies would be returned to operation. On any view, including, it may be added, that of Genuity, such a circumstance is to be preferred to the convening of the second meeting of creditors of the Recapitalisation Companies (and the very real possibility that such companies would ultimately be wound up). Therefore, it is appropriate that the administrations of the Recapitalisation Companies be brought to an end (if, and only if, the conditions referred to at supra [23] (those conditions being more precisely articulated in Order 4) are observed).

Approval of the execution of, and entry into, the Transaction Documents

26    The Recapitalisation Proposal seeks to replace the directors of the Recapitalisation Companies – having been appointed by Genuity (i.e., the former indirect holding company of IGPC) – with appointees of Sev.en (the sole shareholder of IGPH and IGPC) (the New Directors). It is noted that the Administrators hold consents to act from the New Directors and have prepared ordinary resolutions to effect their appointment should the Recapitalisation Proposal Orders be granted.

27    In this context, the Administrators seek an order under s 198G(3)(b) of the Corporations Act approving the New Directors to cause the Recapitalisation Companies to execute and enter into the Transaction Documents. That section is drafted in the following terms:

Exercise of powers while company under external administration

Powers of officers while company under external administration

(1)    While a company is under external administration, an officer of the company must not perform or exercise a function or power of that office.

…

(2)    Subsections (1) and (2) do not apply to the extent that the officer of the company is acting:

(a)    as the external administrator of the company; or

(b)    with the written approval of the external administrator of the company or the Court; or

(c)    in circumstances in which, despite the fact that the company is under external administration, the officer is permitted by this Act to act. …

28    Although the jurisprudence concerning the operation of s 198G(3) is founded upon applications by an officer to bring proceedings in the name of some company in external administration, the scope of the provision is not so limited. For example, in Re IOUpay Limited ACN 091 192 871 (Administrators Appointed) [2023] NSWSC 568, an order was made pursuant to s 198G(3) to approve the relevant directors entering into a finance facility in connection with an application to bring an administration to an end under s 447A of the Corporations Act. It was not suggested that the power under s 198G(3) was not broad enough to cover the present circumstances and, noting the conclusions above, the third of the Recapitalisation Proposal Orders should be made.

29    It is noted that this transaction – being the subject of the Transaction Documents – may be said to have been “entered into under an order of the Court” for the purposes of s 437D(2)(c) of the Corporations Act. This conclusion flows from (a) orders having been made that approve the New Directors executing the Transaction Documents; and (b) the Court having considered and reviewed the transaction. Again, no objection was mounted to the drawing of such conclusion, and it is appropriate to ensure the transaction is not inadvertently rendered void by s 437D(2).

Ancillary elements of the Recapitalisation Proposal Orders

30    The administrations of the Recapitalisation Companies will cease on the satisfaction of defined conditions (see supra [23]). To allow for those conditions to be met (and the Recapitalisation Proposal to be implemented more broadly), it is necessary for such administrations to continue (albeit, for a short time). It follows that it is appropriate to extend the convening periods of the of the Recapitalisation Companies in order to permit that to occur: see, eg, the principles in Park, In the matter of IG Power (Callide) Pty Ltd (Administrators Appointed) (No 5) [2025] FCA 135 [29]. As such, the fourth of the Recapitalisation Proposal Orders should be made.

31    The Administrators also seek directions under s 90-15 of the IPSC that they are justified in:

(1)    taking steps to implement the recapitalisation recorded in the Transaction Documents;

(2)    removing the Recapitalisation Companies’ directors, and causing the New Directors to be appointed as a step in the recapitalisation set out in the Transaction Documents; and

(3)    seeking orders to bring the administrations of the Recapitalisation Companies to an end.

32    It is well accepted that the Court may give direction to an external administrator under s 90-15 where, inter alia, the administrator seeks guidance upon the law and whether a contemplated exercise of discretion is reasonable (cf reassurance vis-à-vis the making and implementation of a commercial decision, or where there is no legal issue raised, or no attack upon the propriety or reasonableness of the decision): see In the matter of IG Power (Callide) Ltd (administrators appointed) (No 4) [2024] FCA 1316 [124] – [131]; Lewis (liquidator), in the matter of Concrete Supply Pty Ltd (in liq) [2020] FCA 841 [31]; Marsden, in the matter of Brindabella Christian Education Limited (Administrators Appointed) [2025] FCA 456 [20] – [22].

33    It is appropriate to afford the Administrators the protection of a direction under s 90-15 of the IPSC in circumstances where (a) the Recapitalisation Proposal involves a series of complex and interrelated steps, many of which involve the exercise of discretion by the Administrators and the application of statutory provisions to the attendant factual circumstances; and (b) there is a real and appreciable risk, having regard to the many disputes that have reared their head in this proceeding, that the propriety and reasonableness of the Administrators’ decision to bring the administrations of the Recapitalisation Companies to an end will subsequently be attacked.

34    In the result, it is appropriate that the Recapitalisation Proposal Orders be made.

The Remuneration Orders

35    By the Remuneration Orders, the Administrators seek, pursuant to the operation of s 60-10 of the IPSC, the fixation of their remuneration as administrators of:

(1)    IGPH, in the amount of $83,519.15 inc GST;

(2)    IGPM, in the amount of $115,240.40 inc GST; and

(3)    IGPC in the amount of $6,229,322.88 inc GST (and relevant disbursements).

36    Two preliminary observations should be made. First, the above amounts include estimates of $55,000 (inc GST) in respect of each of IGPH and IGPM, and $1.1m (inc GST) in respect of IGPC, for work to be conducted between 14 April 2025 and finalisation of the administrations. Second, there is a host of evidence before the Court – including that set out in the Park Affidavit and remuneration reports vis-à-vis IGPH, IGPM and IGPC – that details the (complex) history of the administrations of the relevant companies since the appointment of the Administrators.

37    The principles that bear upon the exercise of power under division 60 of the IPSC are neatly summarised in the careful written submissions of Mr Keane KC, Mr Jameson and Ms Sargent:

48.    An external administrator is entitled to receive remuneration for work that is “necessary work properly performed”: IPSC, s 60-5. The court may make a determination specifying remuneration that an external administrator of a company is entitled to receive for “necessary work properly performed” if a determination is not made by creditors or a committee of inspection: IPSC, s 60-10. The court must have regard to whether the remuneration is reasonable taking in account any or all of the factors in IPSC s 60-12, including the complexity of the work, the value and nature of the property dealt with, and the quality of the work performed.

49.    Future remuneration may be ordered where, in order to avoid the additional costs of a further application for approval of a relatively small amount of remuneration, the Court can be satisfied that future work is proportionate and likely to be required to bring the administration to an end.

50.    On an application of this kind, the Court’s function is to bring an independent mind to bear on the relevant issues, having regard to whether the work done is proportionate to the difficulty and importance of the relevant task. Although it is not necessary for the work to lead to increased funds available for distribution and if work is undertaken unsuccessfully in an attempt to recover assets, provided it was reasonable to perform the work and the amount charged is reasonable, there is no reason the administrators should not be remunerated. Jackson J observed in Park & Muller (liquidators of LM Investment Management Ltd) v Whyte (No 2) (2018) 2 Qd R 413 at [163] that:

[i]t is not the function of the court to hypercritically assess the day by day activities or tasks carried out in the course of a complex administration over a lengthy period of time with the benefit of hindsight. In this context, it is sometimes remarked that the remuneration available to insolvency practitioners should be sufficient to encourage them to carry out the important public function of the administration of insolvent entities for the benefit of the creditors, investors (whether company members or fund members) and the public administration of the insolvency laws in general.

38    In light of the aforementioned propositions, and following considerations, it is appropriate for the Court to fix the Administrators’ remuneration in the manner sought.

39    First, it is undoubted that the administrations of the Recapitalisation Companies have proven complex and lengthy. They have involved multifaceted streams of work including, inter alia, investigation into the underlying causes of the failure of the power units at the Callide Power Station (and public examinations between May and October 2024). The Administrators were simultaneously involved in the undertaking of a transparent and highly involved sales process in respect of the sale or recapitalisation of the IG Power Group or IGPC’s joint venture interest. That process has not been brief. It has occurred over an extended period of time and involved contested judicial direction applications and other urgent proceedings before the Court. In addition, the Administrators have been involved in the continued operation of the companies in administration which, itself, would necessarily have been time consuming and complex.

40    Second, the value of the IG Power Group is substantial. As a general proposition, the amount of work involved in the administration of such a company will, necessarily, be extensive. In that vein, I accept the submission that the amount of remuneration sought by the Administrators is proportionate to the value of the assets which they have had to control.

41    Third, the work of the Administrators has resulted in an objectively positive outcome for both the companies of the IG Power Group and the creditors. They have sought and obtained various proposals to purchase the assets of the companies (including, for example, proposed deeds of company arrangement: see, eg, Park No 6): and now, the Recapitalisation Proposal (which will ultimately return the Recapitalisation Companies to a position of solvency and operation).

42    Fourth, the work performed by the Administrators has been performed at the standard hourly rates on which they were engaged and by implementing efficiency methods (delegating simpler tasks to more junior staff members, regularly reviewing WIP recorded etc). The Administrators have also, very appropriately, followed the ARITA Code of Professional Practice: Insolvency Series, Practice Statement Insolvency 5: Remuneration reporting in their method of charging.

43    Fifth, the Administrators’ remuneration has been solely funded by Sev.en (such entity being supportive of the present remuneration application). That is, in my view, of some moment, as is the fact that no other interested party objects to the fixing of the remuneration by the Court.

44    Sixth, although approval of the Administrators’ remuneration is sought prior to the completion of the administrations, it is appropriate to avoid the additional costs of any further application (particularly where it is intended that the administrations end promptly after this application is determined). Relatedly, I note the remuneration estimate for future work (from 14 April 2025 to the end of the administrations) is, whilst rather high on first blush, nevertheless appropriate as a consequence of the complexity of the circumstances which the Administrators face.

45    In those circumstances, the Remuneration Orders should be granted.

The Confidentiality Orders

46    Section 37AF(1)(b)(i) of the Federal Court Act provides that the Court may prohibit or restrict the publication or other disclosure of information that relates to a proceeding before the Court and is information that comprises evidence or information about evidence. Section 37AG(1)(a) provides one such ground, being that the order is “necessary to prevent prejudice to the proper administration of justice”. I note that it is accepted that there is a recognised public interest in the due and beneficial administration of the estate of companies in external administration for the benefit of creditors and, to that end, commercially confidential information should be protected for that purpose: see, eg, Killer, in the matter of Scooter Group Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2023] FCA 320 [50] – [54].

47    The Confidentiality Orders are sought, first, with respect to information that pertains to both the Recapitalisation Proposal and the Solvency Report. That information includes, inter alia, information in the Transaction Documents relating to the funding provided and the payments to be made, as well as information in the Solvency Report relating to cash flow considerations of the Recapitalisation Companies, and market sensitive information related to electricity pricing, coal costs, operating costs and debt repayments. The release of such information may prejudice the Recapitalisation Companies’ position in the electricity market. That information is not ordinarily available in the public domain and it is appropriate that it not be disclosed.

48    Second, the Confidentiality Orders are sought vis-à-vis information previously determined to be confidential.

49    In those circumstances, the Confidentiality Orders should be made. However, and necessarily, it is appropriate that they be limited to the greatest extent possible. Here, having regard to the fact that the administrations of the Recapitalisation Companies are expected to come to an end in the near future, the orders should be limited to a period of two years from the date on which they are made (noting that they must operate for a duration reasonably necessary to achieve the purpose for which they are made: see, eg, Porter v Dyer (2022) 402 ALR 659, 679 [145]).

Note

50    These are the amended and revised reasons for judgment given on 28 April 2025. Whilst the reasons given above refine and develop those that were delivered ex tempore, the substance of what was said on 28 April has not been changed nor has any other material change been made.

Associate:    

Dated:    15 July 2025

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