Federal Court of Australia

Byrnes (Administrator), in the matter of Salads of Australia Pty Limited (Receivers and Managers Appointed) (Administrators Appointed) [2025] FCA 1686

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to section 439A(6) of the Corporations Act 2001 (Cth) (Act), the period within which the First Plaintiffs (Administrators) must convene the meetings required by section 439A of the Act in respect of the Second and Third Plaintiffs (the second meetings) be extended to 11.59 pm on 22 October 2026.

2.    Pursuant to section 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to the Second and Third Plaintiffs such that, notwithstanding section 439A(2) of the Act, the second meetings may be convened and held at any time during, or within, the period beginning on the date of the making of this order and ending five (5) business days after the convening periods as extended by order 1 above, provided that the Administrators give notice of the meeting to creditors of each of the Second and Third Plaintiffs (including the persons or entities claiming to be creditors of the Second and Third Plaintiffs) at least five (5) business days before the meetings are to take place.

Notice to creditors or persons claiming to be creditors

3.    The Administrators must take all reasonable steps to cause notice of these orders to be given, within two (2) business days after the making of this order, to the creditors (including persons or entities claiming to be creditors) of the Second and Third Plaintiffs by providing a copy of the orders and the originating process to them.

Confidentiality

4.    Pursuant to sections 37AF and 37AG of the Federal Court of Australia Act 1976 (Cth), until any sale by the receivers and managers of the Second and Third Plaintiffs (in their capacities as receivers and managers of those companies) is completed or the receivers inform the Administrators that the process of sale has been abandoned, the following parts of documents be suppressed from publication on the grounds that this order is necessary to prevent prejudice to the proper administration of justice:

(a)    the whole of paragraph 4(c) of the letter dated 9 December 2025 (Boratto Dispute Notice) that is at pages 95 - 98 of annexure MJB-1 to the affidavit of Mathew James Byrnes affirmed on 19 December 2025;

(b)    the words in paragraph 12(c)(iv) of the Boratto Dispute Notice after “engagement with”; and

(c)    the words in paragraph 14 of the Boratto Dispute Notice after “debt facilities”.

General

5.    Liberty be granted to any person who can demonstrate a sufficient interest to discharge or vary these orders to apply upon three (3) business days’ written notice to the Plaintiffs and to the Court.

6.    The Administrators’ costs of and incidental to this application be costs in the administrations of the Second and Third Plaintiffs.

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

REASONS FOR JUDGMENT

HESPE J:

1    On 8 December 2025, the First Plaintiffs (Administrators) were appointed joint and several voluntary administrators of the Second and Third Plaintiffs (together the Companies), pursuant to s 436C of the Corporations Act 2001 (Cth), on instructions of the secured creditors of the Companies.

1    On that same day, Messrs Hardy and Dampney and Ms Dickerson were appointed as receivers and managers of the Companies (Receivers).

2    The first meeting of creditors was convened by the Administrators, pursuant to s 436E of the Corporations Act, on 17 December 2025.

3    Under s 439A(1)-(5) of the Corporations Act, the Administrators are required to convene the second meeting of creditors of the Companies by 15 January 2026 and hold that meeting by 22 January 2026.

4    By originating application dated 19 December 2025, the Administrators applied for orders pursuant to ss 439A(6) and 447A(1) of the Corporations Act and s 90-15 of Schedule 2 to the Corporations Act for an extension of the period within which the Administrators must convene and hold the second meeting of creditors to 22 October 2026, a period of some nine months.

5    The application is heard by me in my capacity as duty judge.

6    For the reasons that follow, I made the orders sought to extend the convening period until 22 October 2026.

Background

7    The Second Plaintiff is the ultimate holding company of the Salads of Australia group of companies. That group includes:

(a)    the Third Plaintiff;

(b)    SPM Fresh Holdings Pty Ltd (ACN 161 701 337);

(c)    PMFresh Pty Ltd (ACN 122 180 929);

(d)    SPM Fresh 2013 Pty Ltd (ACN 161 700 269); and

(e)    PMF 2024 Pty Ltd (ACN 678 802 492).

8    The Second Plaintiff is the sole shareholder of the Third Plaintiff. The sole asset of the Second Plaintiff is its shares in the Third Plaintiff. The Third Plaintiff is the sole shareholder of SPM Fresh Holdings. The sole asset of the Third Plaintiff is its shares in SPM Fresh Holdings. SPM Fresh Holdings is the sole shareholder of each of PMFresh, SPM Fresh 2013 and PMF 2024.

9    PMFresh is a significant food manufacturer and operates a national network of production facilities. Its products include wet (deli) salads, salad kits, salad bowls, salad leaf, value added vegetables and fresh snacks. PMFresh is a major supplier of these products in Australia, including to domestic supermarkets.

10    PMFresh is the only employing entity in the group. It employs over 1,000 staff.

11    PMFresh is solvent and is operating its business as usual. The director and management team of PMFresh have day to day control of the operations of the business. None of PMFresh, SPM Fresh 2013 or PMF 2024 are in receivership or administration.

12    The Third Plaintiff borrowed significant sums from the IFM group:

(a)    $32.5 million from a special limited partnership in Luxembourg (Senior Lender); and

(b)    $22.5 million from a credit fund (Junior Lender).

13    The Second Plaintiff and PMFresh were amongst the guarantors of the Third Plaintiff’s obligations to the Senior Lender and Junior Lender.

14    The Senior Lender and Junior Lender hold a first ranking security interest over the assets of the Second and Third Plaintiffs and a subsequent ranking security interest over the assets of SPM Fresh Holdings, PMFresh, SPM Fresh 2013 and PMF 2024.

15    Following the occurrence of events of default as defined under the loan agreements, on the instructions of the Senior Lender and Junior Lender, the Receivers were appointed as joint and several receivers and managers of the assets of the Second and Third Plaintiffs and the First Plaintiffs were appointed as joint and several voluntary administrators of the Second and Third Plaintiffs.

Reasons the extension is sought

16    In support of the application is an affidavit of Mr Dampney, one of the Receivers, sworn on 19 December 2025. Mr Dampney is an experienced insolvency practitioner, with over 25 years’ experience in advising in liquidation, corporate recovery and restructuring assignments.

17    The Receivers are preparing to commence a sale campaign to realise the Companies’ indirect shareholdings in PMFresh. The Receivers propose to run a multi-stage sale process, requiring submissions of indicative offers and binding offers. The Receivers anticipate that a period of 7 to 8 months will be required for the sale.

18    The proposed sale process timeframe is expected to extend beyond the current deadline by which the Administrators are required to report and convene the second meeting of creditors.

19    Although preparations for the sale process have commenced, the Receivers do not consider it appropriate to formally commence the sale process in December 2025, having regard to:

(a)    the complexity and scale of the business of the Salads of Australia group of companies;

(b)    the fact that the Receivers are still reviewing the books and records currently held by the Receivers in respect of the Companies;

(c)    the necessity to communicate the appointment to a diverse set of stakeholders, including financiers, customers, suppliers, growers and employees;

(d)    the upcoming Christmas and New Year period which, from discussions between the Receivers and the director and the management team of the Third Plaintiff, is the busiest period from an operational perspective for the Salads of Australia group of companies and potential bidders are unlikely to be receptive to commencing analysis on a complex transaction before or during the Christmas and New Year period.

20    Part of the reason for the length of the extension sought is that that the sale process needs to take account of the new mandatory merger control regime which will take effect from 1 January 2026 which will likely require ACCC approval (or a waiver) before the parties can put a sale transaction into effect. The Receivers understand that:

(a)    the ACCC expects at least two weeks of pre-engagement prior to accepting a notification in the case of a non-competitor bidder, and a longer pre-engagement period may be required for a more complex transaction such as one in concentrated markets or involving the merger of close competitors;

(b)    the ACCC will only commence the formal review process once the parties have signed a contract or otherwise demonstrated their mutual intention to enter into the transaction. The Receivers understand that the ACCC has indicated that, at a minimum, a signed heads of agreement would be needed. Bidders will not be able to be granted approval by the ACCC before being selected by the vendor;

(c)    the ACCC is statutorily prohibited from providing a determination on a notification before 15 business days have elapsed;

(d)    once an ACCC determination has been made, there will be a 14-day standstill period to allow for any appeals to the ACCC's decision; and

(e)    while there is an option to seek a waiver from the ACCC instead of a notification, there is a risk that the transaction would not be a candidate for a waiver application based on the ACCC's guidance to date, and the waiver process is untested.

21    Based on his experience, Mr Dampney considers an extension of 9 months would allow a thorough sale process to be run in respect of the Companies’ shares in their subsidiaries, during which period the business of the Salads of Australia group of companies would continue to trade as a going concern, which it is anticipated will yield the best return to stakeholders.

22    The Receivers consider that there is a prospect of a better return to creditors if a sale of the shares occurs while the Companies are in administration rather than if the Companies were to enter liquidation.

23    The Receivers consider that the interests of creditors and other stakeholders (including employees, customers and suppliers of PMFresh) would be prejudiced if an extension were not granted. In their view, and based on their experience, it would be close to impossible to run an appropriate sale process in the statutory timeframe.

24    In addition to taking account of the new mandatory merger control regime, the length of the extension sought allows for some slippage to take account of delays in the sale process without a need to return to Court to request a further extension. The Receivers and First Plaintiff intend to co-operate so that the Administrators may promptly convene the second meeting of creditors if the sale campaign is completed in a shorter period of time.

25    By an affidavit of Mr Byrnes, one of the First Plaintiffs, sworn on 19 December 2025, Mr Byrnes deposes that:

(1)    Due to the Receivers having access to the books and records of the Companies, the Administrators do not have direct access to those books and records.

(2)    At the first meeting of creditors, the creditors were invited to form a committee of inspection if they considered it appropriate to do so. The creditors did not move or propose a resolution to form a committee of inspection for either of the Companies.

(3)    The creditors were informed at that first meeting of creditors, that at the request of the Receivers, the Administrators would be making an application to the Court for an extension of the period for the convening of the second creditors meeting. No objection was raised by any of the creditors to that extension being sought.

(4)    Based on the information available to the First Plaintiffs, there are two potential unsecured creditors of the Companies, the most significant of which is PMFresh and the other is an insurer. The directors of the Companies were considering whether they had any potential claims against the Companies but no proof of debt has yet been filed. The Australian Taxation Office has confirmed that as at the date of the appointment of the First Plaintiffs as administrators of the Companies, the Companies did not have any outstanding taxation debts to the Commissioner of Taxation.

(5)    A shareholder of the Second Plaintiff Salads of Australia has issued dispute notices pursuant to a shareholders’ agreement between the Second Plaintiff and its two shareholders.

(6)    The First Plaintiffs are of the view that the successful conduct of the sale process proposed by the Receivers is the course of action that is most likely to maximise the potential return to creditors.

26    The Senior Lender and Junior Lender are supportive of the proposal. No objection has been received from other creditors.

Consideration

27    The principles that apply when considering an extension of the convening period are well established: see Crawford, in the matter of North Queensland Heavy Haulage Services Pty Ltd (Administrators Appointed) [2017] FCA 635 at [18]-[20] (Markovic J); Frisken, in the matter of Xpress Transport Solutions Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) [2023] FCA 448 at [32]-[38] (Cheeseman J) and Tucker (Administrator) v Bolten (Trustee), in the matter of Quintis Leasing Pty Ltd (Administrators Appointed) (No 2) [2024] FCA 46 at [54]-[59] (Banks-Smith J).

28    The power to extend the time for convening the second meeting should not be exercised as of course: Crawford at [19] (Markovic J) and Albarran, in the matter of Chala Metals Limited [2025] FCA 984 at [1] and [4] (Owens J). As Barrett J observed Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10], the task for the Court in considering whether to exercise the power is:

… to strike an appropriate balance between, on the one hand, the expectation that administration will be a relatively speedy and summary matter and, on the other, the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return for shareholders.

See further Silvia, in the matter of Austcorp Group Ltd (Administrators Appointed) [2009] FCA 636 at [18] (Lindgren J).

29    The categories of cases in which an extension of time has been granted were identified by Nettle and Gordon JJ in Mighty River International Limited v Hughes (2018) 265 CLR 480; [2018] HCA 38 at [73] (in dissent but on a point not relevant to the present proceedings) and reiterated by Thawley J in Farnsworth v About Life Pty Limited (Administrator Appointed), in the matter of About Life Pty Limited (Administrator Appointed) [2019] FCA 11 at [8].

30    I am satisfied that the prospects of a better outcome for creditors through a longer period of administration outweigh the general expectation of a prompt resolution of the administration in the circumstances of this case for the following reasons:

(1)    Although the only assets of the Companies in administration are shares, those shares are indirect interests in a business of some size and complexity.

(2)    Additional time is needed to execute a sale process.

(3)    Placing the Companies into liquidation would be more likely to prejudice creditors whereas additional time is likely to enhance the return for unsecured creditors.

(4)    There is no opposition from creditors including the secured creditors.

(5)    The Administrators and the Receivers are of the opinion that an extension is needed. Given their specialised and extensive experience, their opinion is to be given weight: Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) (2020) 144 ACSR 347; [2020] FCA 717 at [68] (Middleton J).

(6)    Although the extension sought is somewhat lengthy, the reasons for the length have been explained, particularly, the anticipated sale schedule, the potential for further slippage, the impact of the new merger regime and the need to enter into any agreement before the ACCC will consider approval under the new merger control regime. A material part of the length of the extension is due to uncertainty concerning how the new merger regime will operate in practice.

Confidentiality order

31    The Administrators seek a confidentiality order over certain discrete parts of one of the shareholder notices of dispute on the ground that the order is necessary to prevent prejudice to the proper administration of justice, pursuant to ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth).

32    I am satisfied that the disclosure of that information is commercially sensitive and likely to adversely affect the ability of the Receivers to conduct a confidential sales process that promotes the objects of Pt 5.3A of the Corporations Act. The information to be suppressed is of no relevance to understanding the working of the Court or the reasons for the decision. I am satisfied that the order in its very limited scope is therefore necessary to prevent prejudice to the administration of justice.

33    However, I am not satisfied that it is necessary for that information to be suppressed indefinitely. The suppression order sought will be made but only until any sale by the Receivers is completed or the sale process is abandoned.

Conclusion

34    For the reasons set out above, I am satisfied that allowing further time to progress the sale process is appropriate to achieve the objects of Pt 5.3A of the Corporations Act and strike the balance identified in the authorities, and I was satisfied that it was appropriate to grant the extension of the convening period sought by the Administrators.

Associate:

Dated:    24 December 2025