Cathro, in the matter of Australian Hotel Acquisition Pty Ltd (Receivers and Managers Appointed) (In Liquidation) ACN 113 961 194 (No 2)
[2010] FCA 613
FEDERAL COURT OF AUSTRALIA
Cathro, in the matter of Australian Hotel Acquisition Pty Ltd (Receivers and Managers Appointed) (In Liquidation) ACN 113 961 194 (No 2) [2010] FCA 613
Citation: Cathro, in the matter of Australian Hotel Acquisition Pty Ltd (Receivers and Managers Appointed) (In Liquidation) ACN 113 961 194 (No 2) [2010] FCA 613 Parties: SIMON JOHN CATHRO AND DAVID JOHN FRANK LOMBE AS JOINT AND SEVERAL LIQUIDATORS OF AUSTRALIAN HOTEL ACQUISITION PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 113 961 194; SURFERS PARADISE ACQUISITION CORPORATION (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 116 341 149; HPI AUSTRALIA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 007 709 668; HPI PARRAMATTA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 003 628 340; AND CE’NEDRA PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 003 970 885 File number: NSD 313 of 2010 Judge: EMMETT J Date of judgment: 4 June 2010 Date of hearing: 4 June 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 9 Counsel for the Plaintiffs: J Baird Solicitor for the Plaintiffs: Sparke Helmore
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 313 of 2010
IN THE MATTER OF AUSTRALIAN HOTEL ACQUISITION PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 113 961 194
SIMON JOHN CATHRO AND DAVID JOHN FRANK LOMBE AS JOINT AND SEVERAL LIQUIDATORS OF AUSTRALIAN HOTEL ACQUISITION PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 113 961 194;
SURFERS PARADISE ACQUISITION CORPORATION (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 116 341 149;
HPI AUSTRALIA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 007 709 668;
HPI PARRAMATTA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 003 628 340; AND
CE’NEDRA PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 003 970 885
Plaintiffs
JUDGE:
EMMETT J
DATE OF ORDER:
4 JUNE 2010
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The documents comprising Confidential Exhibit A and the affidavit of Simon John Cathro sworn 3 June 2010 are to remain confidential.
2.Pursuant to s 477(2B) of the Corporations Act 2001 (Cth), the following be approved, namely entry by Simon John Cathro and David John Frank Lombe in their capacity as joint and several liquidators of:
(a)Ce’Nedra Pty Limited (receivers and managers appointed) (in liquidation) ACN 003 970 885 (Ce’Nedra); and
(b)HPI Parramatta Pty Limited (receivers and managers appointed) (in liquidation) ACN 003 628 340 (HPIP)
for themselves as liquidators and for the above companies, into a deed entitled “Deed of Intent”, which is in substantially the same form as the Deed of Intent behind Tab 1 of the exhibit to the affidavit of Simon John Cathro sworn on 3 June 2010 (being Confidential Exhibit A), to which the other proposed parties are Marriott International Management Company BV (ARBN 094 976 039) and Global Hospitality Licensing SARL (a Luxembourg company).
3.The plaintiffs’ costs in seeking these orders be costs in the winding up of HPIP and Ce’Nedra.
4.The originating process filed on 26 March 2010 be stood over to 2 July 2010.
5.The plaintiffs be granted liberty to apply.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 313 of 2010
IN THE MATTER OF AUSTRALIAN HOTEL ACQUISITION PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 113 961 194
SIMON JOHN CATHRO AND DAVID JOHN FRANK LOMBE AS JOINT AND SEVERAL LIQUIDATORS OF AUSTRALIAN HOTEL ACQUISITION PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 113 961 194;
SURFERS PARADISE ACQUISITION CORPORATION (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 116 341 149;
HPI AUSTRALIA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 007 709 668;
HPI PARRAMATTA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 003 628 340; AND
CE’NEDRA PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 003 970 885
Plaintiffs
JUDGE:
EMMETT J
DATE:
4 JUNE 2010
PLACE:
SYDNEY
REASONS FOR JUDGMENT
On 26 March 2010, the Court made orders under s 477(2)(b) of the Corporations Act 2001 (Cth) (the Corporations Act) approving the entering into of a deed entitled “Asset Handover Deed” (the Asset Handover Deed). I gave reasons on that occasion for making those orders and those reasons set out the background relationship between various parties in relation to hotel premises situated at Parramatta known as the Courtyard Hotel. Since that time the liquidators of the various companies involved in the operation of the Courtyard Hotel have taken steps to realise their assets.
The Asset Handover Deed was entered into on 29 March 2010. Under to the Asset Handover Deed, the liquidators took possession of the Courtyard Hotel and other assets of the companies. Steps were then undertaken to market and sell the Courtyard Hotel.
On 14 May 2008, David Winterbottom and Robert Hudson, of KordaMentha (the Receivers), had been appointed as the receivers and managers of all the assets and undertakings of the companies. The Receivers set up a data room and the liquidators now control access to and the uploading of documents to, the data room.
Since 1 April 2010, the Courtyard Hotel has been marketed by Jones Lang LaSalle by various methods. Draft contracts for the sale of the business and real property on which the hotel is constructed have been prepared and are available for interested parties through the facility of the data room. The closing date for providing submissions relating to possible purchase is expected to be in the near future.
The liquidators expect that there are three possible bases upon which purchasers may be interested in buying the hotel and the hotel business. The first is that of continued operation of, or provision of services to, the business by parties other than the Marriott parties and free of various arrangements between the companies and the Marriott parties (Ongoing Operation). The second involves vacation of the site of the hotel by the companies and by the Marriott parties as at the date of handover to any prospective purchaser (Vacant Possession). The third involves continuation of the business and the conduct of, and provision of services to, the business by the Marriott parties in accordance with the existing arrangements (Unchanged Operation).
The liquidators consider that the price that is likely to be achieved will depend upon the basis upon which the sale occurs. A higher sale price is likely to be achieved by selling the hotel subject to vacant possession as compared with sale under which the hotel remains subject to the arrangements with the Marriott parties. The liquidators, in order to maintain flexibility of their proposed arrangements for sale, propose to enter into an instrument described as a Deed of Intent with the Marriott parties.
The Deed of Intent recognises that the Courtyard Hotel and the hotel business are being sold and that the purchaser may wish to acquire the assets on one or other of the three bases that I have briefly described. Under the proposed Deed of Intent, the hotel companies, under the control of the liquidators, must give the Marriott parties written notice of the entry into a legally binding contract with a purchaser, stating whether the purchaser has elected to acquire the assets on the basis of Ongoing Operation, Vacant Possession or Unchanged Operation. If the notice states that the sale is on the basis of Ongoing Operational or Vacant Possession, the arrangements with the Marriott parties will be terminated, and the parties to the Deed of Intent are to take all steps necessary to ensure the ongoing and smooth operation of, and provision of services for, the hotel business up to the handover date. In consideration of the Marriott parties terminating their arrangements, they are to be paid a termination fee. If the notice states that the sale of assets is on the basis of Unchanged Operation, nothing in the Deed of Intent is intended to affect, amend or displace the arrangements with the Marriott parties.
The proposed Deed of Intent provides that the Marriott parties will continue to manage the hotel up to handover date in the proposed sale. In the event that the assets are sold on the basis of Ongoing Operation, the companies under the control of the liquidators undertake to ensure that a new manager will honour any rates for guests staying at the hotel.
If the notice of sale is on the basis of Vacant Possession, the hotel companies agree to indemnify the Marriott parties against any liability of any nature whatsoever arising or resulting at any time during the period of 12 months from the handover date. On termination of the arrangements with the Marriott parties and the provision of vacant possession, the hotel companies indemnify the Marriott companies, for a period of 12 months, against any and all liability arising out of or resulting from claims from guests, returned deposits or credit card refunds and any advance deposits received. Thus, the proposed Deed of Intent would involve obligations that may be performed more than three months after it was entered into.
The liquidators have, therefore, applied once more to the Court for orders under s 477(2B) of the Corporations Act that the entry into the Deed of Intent be approved by the Court. The liquidators consider that entry into the Deed of Intent is likely to result in an increase in the sale price for the relevant assets. Thus, it is the creditors of the companies who will benefit from entry into the Deed of Intent. The liquidators consider that the existence of the arrangements with the Marriott parties, which impose onerous obligations on an owner of the hotel, may deter potential purchasers. For that reason, the liquidators consider that it is in the interests of the creditors of the companies that the flexibility contemplated by the Deed of Intent be available to enable the sale, if one is to occur, to be effected on any one of the three bases that I have described.
In all of the circumstances, I consider that it is appropriate to accede to the liquidators’ application and to give approval, pursuant to s 477(2B), for the liquidators to enter into the proposed Deed of Intent. The content of the proposed Deed of Intent and valuations that have been obtained by the liquidators and provided to the Court in support of this application are commercially sensitive. It is appropriate, therefore, that access to those documents not be permitted.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 16 June 2010
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