Federal Court of Australia

ACN 698 960 137 Pty Ltd, in the matter of Venturecrowd Holdings Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2026] FCA 900

ORDERS

THE COURT ORDERS THAT:

1.    The originating process be dismissed.

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

REASONS FOR JUDGMENT

DOWNES J:

1    This was an application brought on an urgent basis on the duty list. The order which was sought by the plaintiff (described as NewCo in the originating process) was that, pursuant to s 442C(2)(c) of the Corporations Act 2001 (Cth), if the creditors of VentureCrowd Holdings Pty Ltd (VCH) resolve that VCH should enter into a deed of company arrangement (DOCA) substantially in the form set out at Annexure “SM-1” to the Affidavit of Steven Maarbani affirmed on 7 July 2026, the Deed Administrators under that DOCA have leave to dispose of the Trust Property and Transferring Property of the Company (as defined in the DOCA).

2    The application for leave was opposed by the secured creditor, CBP Centre Pty Ltd as trustee for the Vidatyaronine Trust (CBP Centre). CBP Centre commenced and was successful in a proceeding in the Supreme Court of Queensland against VCH. VCH appealed but then compromised its appeal by entry into a Deed of Settlement with CBP Centre for instalment payments of a settlement sum. VCH also entered into a General Security Deed with CBP Centre to secure its obligations under the Deed of Settlement.

3    On 16 July 2026, I refused to grant leave and dismissed the originating process. These are my reasons for doing so.

4    VCH entered into administration on 9 April 2026 pursuant to s 436C of the Act. The second meeting of creditors was scheduled to occur at 9am today, 17 July 2026, which was the posited reason for the urgency. That meeting has now been adjourned to 24 July 2026 following an order being made in chambers at the request of the administrators.

5    CBP Centre has also appointed receivers and managers to the property of VCH.

6    The Receivers’ Report on Company Affairs and Property lodged with ASIC on 25 June 2026 records an amount of $2.9 million owed by VCH to CBP Centre. CBP Centre contends for a higher amount in excess of $3 million. Without accepting CBP Centre’s calculation, VCH accepts that the total amount for which CBP Centre is able to prove is likely to exceed $3 million.

7    VCH is the parent company of nine wholly owned subsidiaries (Group). The Group’s businesses variously provide services for companies and property projects including capital raising and development. The only company in the Group which is in administration is VCH.

8    NewCo proposed a DOCA in respect of the Group, with a revised version being provided to the Court on 15 July 2026.

9    NewCo submits that, if the proposed DOCA is approved by creditors and effectuates, then:

(a)    VCH and three of its subsidiaries (together, the DOCA Companies) would go into liquidation (although this was probably intended to refer to administration), with assets placed into a trust fund for distribution to creditors; and

(b)    the shares in six other subsidiaries would transfer to NewCo, together with the Group’s employees (and their accrued entitlements), so that the businesses operated by the Group could continue.

10    In order for the proposed DOCA to be capable of effectuation, s 442C of the Act provides that the DOCA Companies’ Administrators require either:

(a)    consent of the secured creditor CBP Centre (which has not been provided); or

(c)    leave of the Court,

to dispose of the property of VCH that is secured under the General Security Deed.

11    Section 442C(3) of the Act provides that:

The Court may only give leave under paragraph (2)(c) if satisfied that arrangements have been made to protect adequately the interests of the secured party….

12    The first iteration of the proposed DOCA provided for payments out of the trust fund to CBP Centre of $3 million in priority to all payments other than appointment costs and the employee entitlements of employees who do not transfer to NewCo. The balance of the amount for which CBP Centre is admitted to prove would then be paid pari passu with the unsecured creditors.

13    The evidence which was relied upon by NewCo to demonstrate that there would likely be assets of value placed into the trust fund was not the subject of expert evidence, but was based upon the opinion evidence of its directors, without many facts on which they relied to express their opinions being in evidence. Those opinions as to the ultimate value of assets to be placed into the trust fund were also subject to various contingencies, such as capital being obtained to enable a particular property development to be finished (with no assessment based on proper evidence as to the likelihood of both of these events occurring), and the success of litigation against a builder (but with no details as to how that litigation would be funded). The evidence also showed that the value of the trust property was unlikely to be realised for some years.

14    The administrators of VCH issued a Supplementary Report to Creditors dated 10 July 2026. In that report, the administrators identified a number of “key deficiencies” in the DOCA. Relevantly to the interests of creditors, including CBP Centre, the Report states (with my numbering):

(1)    The DOCA proposal and associated Creditors Trust negates the ability for:

•    creditor positions and rights to be restored across the DOCA companies

•    a liquidator to be appointed to VCH

•    any recourse against the DOCA Companies’ transferring assets or the Deed Proponent.

Should the terms of the DOCA not be met.

(2)    The DOCA Proposal, on execution/commencement, provides for an immediate extinguishment of creditor claims against the DOCA Companies while separately providing for transfers and contributions to the creditors’ trust (save for $100,000 which is contemplated to be paid before execution of the DOCA but the source of which has not been evidenced). Participating creditor claims against the DOCA Companies will permanently cease to exist upon commencement of the DOCA irrespective of whether assets transfer to the creditors’ trust including the proposed payments into the creditors trust.

(3)    Participating creditors will not have any recourse against the DOCA Companies or the Deed Proponent if assets do not become available in the creditors’ trust to provide a distribution to creditors. There is a real risk that the rights of creditors could be forgone for no real benefit.

(4)    Reason for Creditors Trust. Any reason offered to us for the creation of the creditors’ trust and immediate extinguishment of creditor claims against the DOCA Companies appears to primarily benefit the Deed Proponent and its related parties over creditors of VCH. As noted above, if a creditors’ trust is utilised it should either not come into effect until the relevant payments are made or otherwise offer some security or other form of recourse in favour of the creditors’ trust to protect the rights of creditors. …

(5)    Debt Ceiling. The DOCA Proposal seeks to impose an upper limit of $3m to the debt of the first registered security interest holder, VCCPL without the consent of that security holder or leave of the Court. The DOCA Proposal then seeks to subrogate any amount owed to VCCPL above $3m from first ranking security holder to that of an ordinary unsecured creditor to participate on a pari passu basis. The DOCA Proposal appears to prejudice the first registered security interest holder. …

(6)    Purpose and Effect of Creditors’ Trust. It has not been clearly articulated by the DOCA Proponent why a creditors trust is required as part of the DOCA Proposal. The case as to why a creditors trust is required has not been made. Our concern with the creditors’ trust is that it takes the claims of Participating creditors away from VCH and places them into a trust. There is no security offered to the trust to secure the payments proposed to be made to the trust under the terms of the DOCA. There is nothing in the DOCA proposal that compels the DOCA proponent or puts the DOCA proponent at risk if any of the payments under the DOCA aren’t made or funds realised in the trust from the assets proposed to be transferred into the trust.

(Emphasis original).

15    Although NewCo adduced further evidence of its directors to seek to address these concerns, that evidence was argumentative in some respects, and was inadequate to overcome the concerns expressed by the administrators in their Supplementary Report. This is so even though there had been amendments made to the DOCA following issues raised by me at the first hearing as well as by the administrators, and leave was then sought based upon what became a second iteration of the proposed DOCA.

16    A critical amendment to the DOCA which reduced the protection of the interests of CBP Centre was the removal of the priority payment of $3 million to it in exchange for the payment of the amount “for which CBP Centre is admitted to prove” under the DOCA. As Mr Bird, who appeared for NewCo, properly accepted, that amount could prove to be less than $3 million. Of course, that amount could even be nil. It is simply unknown.

17    The amendments also reduced the obligation upon NewCo to pay money into the trust fund by $780,000, which increased the reliance upon the profitable completion of property developments before CBP Centre would be paid any of its debt.

18    For these reasons, I was not satisfied that arrangements have been made to protect adequately the interests of the secured party such that I was unable to grant the leave sought.

Associate:

Dated:    17 July 2026