Dean-Willcocks, in the matter of Brand New Media Pty Ltd (Administrators Appointed)
[2016] FCA 586
•24 May 2016
FEDERAL COURT OF AUSTRALIA
Dean-Willcocks, in the matter of Brand New Media Pty Ltd (Administrators Appointed) [2016] FCA 586
File number: NSD 769 of 2016 Judge: YATES J Date of judgment: 24 May 2016 Catchwords: CORPORATIONS – voluntary administration – application to extend the convening period for the second meeting of creditors Legislation: Corporations Act 2001 (Cth) s 439A Cases cited: Gothard (as recs and mgrs of each of AFG Pty Ltd) (ACN 051 982 560) (in liq) v Davey (2010) 80 ACSR 56; [2010] FCA 1163
Re Riviera Group Pty Ltd (admins apptd) (recs and mgrs apptd) (ACN 102 298 279) (2009) 72 ACSR 352; [2009] NSWSC 585
Date of hearing: 24 May 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 12 Counsel for the Plaintiffs: Mr N Mirzai Solicitor for the Plaintiffs: Bridges Lawyers ORDERS
NSD 769 of 2016 IN THE MATTER OF BRAND NEW MEDIA PTY LTD (ADMINISTRATORS APPOINTED) ACN 112 216 136
RONALD JOHN DEAN-WILLCOCKS AND ANTHONY WAYNE ELKERTON IN THEIR CAPACITY AS JOINT AND SEVERAL VOLUNTARY ADMINISTRATORS OF BRAND NEW MEDIA PTY LTD (ADMINISTRATORS APPOINTED) ACN 112 216 136
Plaintiffs
JUDGE:
YATES J
DATE OF ORDER:
24 MAY 2016
THE COURT ORDERS THAT:
1.The originating process filed on 24 May 2016 be returnable instanter.
2.Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), and until further order of the Court, the publication and disclosure of the contents of the affidavit of Ronald John Dean-Willcocks sworn on 24 May 2016, which is described in its title as the “Confidential Affidavit of Ronald John Dean-Willcocks” (the confidential affidavit) and the contents of the documents which are exhibited to the confidential affidavit, identified as Exhibit RDW-2 (the confidential exhibit) be prohibited and restricted as follows:
(a)No person other than the plaintiffs, or their legal representatives, or their servants, agents or employees, may search the Court file for, inspect, uplift or copy the confidential affidavit and/or the confidential exhibit; and
(b)No person, other than the plaintiffs, or their legal representatives, or their servants, agents or employees, may publish or disclose any part of the confidential affidavit and/or the confidential exhibit, unless and/or until that information enters the public domain.
This order is made on the basis that it is necessary to prevent prejudice to the proper administration of justice.
3.Pursuant to s 439A(6) of the Corporations Act 2001 (Cth) (the Act), the date of the convening period as defined by s 439A(5) of the Act for the second meeting of creditors of Brand New Media Pty Ltd (administrators appointed) (the company) be extended from 26 May 2016 to up to and including 24 August 2016.
4.Pursuant to s 447A of the Act, Pt 5.3A of the Act is to operate in relation to the company as if the second meeting of creditors of the company required by s 439A of the Act may be held at any time up to, or within, five business days before or five business days after the period as extended by order 3 above, notwithstanding the provisions of s 439A(2) of the Act.
5.The costs of and incidental to this application be costs of the administration of the company.
6.The plaintiffs, in their capacity as administrators of the company, be entitled to an indemnity pursuant to s 443D of the Act for their remuneration, costs, charges and expenses of and incidental to this application.
7.By 27 May 2016, the plaintiffs give notice of these orders to the creditors of the company and may do so by way of electronic means to those creditors who have nominated an electronic address for the purpose of receiving notifications from the plaintiffs or their solicitors.
8.Liberty be granted to any creditor of the company, or any other person with a sufficient interest in the company, to apply to vary or discharge these orders on three days written notice being given to the plaintiffs and the Court.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)YATES J:
This is an application made pursuant to s 439A(6) of the Corporations Act2001 (Cth) to extend the convening period for the second meeting of creditors of Brand New Media Pty Ltd (administrators appointed) (the company). The plaintiffs are the joint and several voluntary administrators of the company. They were appointed on 27 April 2016. Unless extended, the convening period will end on 25 May 2016. The extension that is sought is to 24 August 2016, a period of approximately three months. The application is supported by two affidavits made on 24 May 2016 by the first-named plaintiff,
Ronald John Dean-Willcocks.
BACKGROUND
Mr Dean-Willcocks has described the company as a global media content development company. It owns, creates and operates digital channels and has a technology platform that delivers the opportunity for clients to create, manage and distribute content. It has offices and studios operating across Australia and in Singapore. It has technology platforms in South East Asia and Europe. It conducts this business via a number of subsidiary companies. The corporate structure is complex.
Mr Dean-Willcocks has given an account of the administration to the present time. It is not necessary for me to go into the details of this account other than to note that a very large number of issues have arisen in the administration which will require further investigation and, in a number of cases, resolution. Many of the issues that have arisen will require the provision of legal advice. The issues concern, but are not limited to, agreements and assignments into which the company entered in the weeks immediately preceding the appointment of the plaintiffs. A number of these agreements and assignments are covered by confidentiality arrangements entered into with third parties. Based on Mr Dean-Willcocks’ affidavits, I have no reason to doubt that considerable time will be necessary to unravel the complexities and intricacies of the business conducted by the company and its subsidiaries, including in relation to these agreements and assignments.
The company’s principal assets, other than debtors and cash, are its intellectual property and shareholdings in subsidiary companies. One aspect of the company’s business is called channelPlay. The channelPlay business operates principally in Singapore, and involves the company providing a platform through the company’s own intellectual property and third party intellectual property for the delivery of online video and other digital content to subscribers. The channelPlay business continues to operate through a company known as Brand New Media Singapore Pte Ltd (BN Singapore). Branded Media Pty Ltd (BM) owns 65.31% of the shares in BN Singapore. The company owns 100% of the shares in BM.
REASONS ADVANCED FOR AN EXTENSION
Apart from providing an overview of the financial position of the company,
Mr Dean-Willcocks has given an account of the tasks undertaken by the plaintiffs to date. Those tasks are significant. However, Mr Dean-Willcocks has said that, due to the time constraints of the administration, the plaintiffs have not completed all investigations into potential insolvent trading claims or breach of duty claims against the directors, completed a review of related-party claims against the company and the commerciality of those transactions, or finalised their view on other antecedent transactions undertaken by the company or by its directors. Part of the difficulty has been the illness of one of the company’s directors. That illness is, apparently, ongoing.
To date, the plaintiffs have not received any proposal for a deed of company arrangement (DOCA) in respect of the company. Nevertheless, Mr Dean-Willcocks has deposed that, subject to the outcome of the plaintiffs’ further investigations, it may be that a DOCA will be proposed by one or more of the directors. Mr Dean-Willcocks has expressed the view that it would be in the interests of the creditors of the company to allow more time to finalise the plaintiffs’ investigations and inquiries into the recoverability of assets, debtors and intellectual property and to determine what such a proposal might involve and whether a greater outcome can be achieved for the creditors by such a proposal.
Mr Dean-Willcocks has identified a number of particular matters which he says would justify an extension of the convening period. He says that the administration is complex, with a number of difficult issues arising due to the disputes that have arisen and the investigations that are now required. I have briefly alluded to that aspect of the administration. I have no doubt that it is a complex administration in light of the particular difficulties set out in the two affidavits. Some of those issues include the need to determine the assertion of a registered security interest by one of the directors, Steven Bradley Furman. There is also a domain name dispute, and the possibility of selling a business referred to in the affidavits as the Ido Business as well as the channelPlay business. The plaintiffs also need to deal with a particular employee claim referred to in the affidavits as the Bray Claims. The need to resolve this claim appears to be intimately connected with the plaintiffs’ ability to realise certain other assets of the company. There is also a joint employment issue (see Gothard (as recs and mgrs of each of AFG Pty Ltd) (ACN 051 982 560) (in liq) v Davey (2010) 80 ACSR 56; [2010] FCA 1163) to be considered and resolved between the company and one of its subsidiaries. Mr Dean-Willcocks has also referred to the need for the plaintiffs to identify all the company’s intellectual property, so that a decision can be made as to whether that property could be sold prior to any liquidation, and if so, engage in negotiations and potentially enter into sale agreements.
OTHER MATTERS
At the first meeting of creditors on 9 May 2016, the creditors were informed of the possibility that an application would be made to extend the convening period of the second meeting. The creditors present at the first meeting who were entitled to vote, voted in favour of an application to extend the convening period, if such an application was deemed necessary by the plaintiffs.
Mr Dean-Willcocks has deposed that he is not aware of any prejudice that creditors would suffer as a result of an extension of the convening period being granted. He says that the costs incurred by the plaintiffs in completing the tasks identified in his affidavits would be incurred by a liquidator in any event.
CONSIDERATION AND DISPOSITION
It has been put in the course of submissions this afternoon, and supported by
Mr Dean-Willcocks’s affidavits, that it is in the interest of creditors as a whole that the convening period be extended, particularly when compared with the alternative of having to recommend an immediate liquidation of the company. Mr Dean-Willcocks has deposed to the view that it is beneficial to the creditors of the company that the convening period be extended, as it may ultimately allow potentially greater benefits for them.
I have been taken to the general statements of principle by Austin J in Re Riviera Group Pty Ltd (admins apptd) (recs and mgrs apptd)(ACN 102 298 279) (2009) 72 ACSR 352; [2009] NSWSC 585. Those principles are both well-known and generally accepted as providing guidance on how the discretion in cases such as the present should be exercised.
I am satisfied that, on balance, it is appropriate to extend the convening period. I am satisfied that the period of three months that is sought is not excessive in the circumstances, having regard to the complexities and intricacies of the company’s business as detailed in the affidavit evidence. I also take into account the matters to which I have referred at [8]-[9] above. Orders will be made accordingly.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate:
Dated: 31 May 2016
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