Billingsley (Administrator), in the matter of B K Chemists Pty Ltd (Administrators Appointed) (No 2)

The case before the Court involved an application by Michael James Billingsley, the Administrator of B K Chemists Pty Ltd and B K Chemists No. 2 Pty Ltd, seeking an extension of the convening period for the second meetings of creditors. The administrators had been appointed on 10 February 2020, and the initial meetings of creditors were held on 20 February 2020. An extension had already been granted on 5 March 2020 to facilitate the sale of the companies’ businesses as going concerns. However, Mr Billingsley sought a further extension to allow additional time to complete the sales and attend to ancillary matters such as assigning or novating contracts or leases. The Court was required to determine whether the convening period should be extended further, and if so, to what extent.

The Court considered several factors in deciding the matter. These included the administrators' successful negotiation and exchange of business sale agreements, the potential for maximizing the value of the businesses through the completion of the sales, the lack of objection from secured creditors, the payment or consignment arrangements with trade creditors, and the administrators' belief that the sales could be completed within two months. The Court also noted that if the extension was not granted, the companies would likely enter liquidation, resulting in a loss of value and potential job losses. The Court was satisfied that the extension would be in the best interests of the companies' creditors.

The Court granted the application for an extension of the convening period for each company up to and including 9 September 2020. The Court also made orders to ensure that the Second Meeting could be held within five days after the end of the extended convening period, to prevent the disclosure of certain confidential information, and to require notification of the companies' creditors of the orders. The applicants' costs were to be paid out of the property of the companies.

The orders made by the Court reflect a balanced consideration of the interests of all stakeholders, ensuring that the administrators have sufficient time to complete the sales while also protecting the interests of creditors and employees. The Court's decision demonstrates a pragmatic approach to the administration process, recognising the complexities involved in managing the sale of businesses as going concerns.