Freeman, in the matter of Regional Express Holdings Limited (administrators appointed) (No 2)

Regional Express Holdings Limited (Rex Holdings) and several of its subsidiaries, collectively referred to as the Rex Companies, were under insolvent administration, with Mr Freeman appointed as the administrator. The applicants sought various orders under the Corporations Act 2001 (Cth), including an extension of the convening period for second meetings of creditors, limitation of the administrators’ personal liability in respect of a confidential deed of guarantee, and modification of the requirements for conducting the second creditors' meetings. They also sought ancillary orders and suppression orders concerning the deed of guarantee and related confidentiality deed. The central legal issue before the court was whether the proposed extension of the convening period and the other reliefs sought were justified and in the best interests of the creditors, considering the objectives of Part 5.3A of the Corporations Act.

The court found that the proposed extension of the convening period was warranted to facilitate the sale of the business as a going concern, which would likely result in a greater return for creditors compared to an immediate winding up. The court was satisfied that the extension period was reasonable given the size and complexity of the business and the need to allow interested parties adequate time to consider the information provided. The court also considered that the ongoing sale process was likely to bring about the greatest return to creditors and would help preserve existing business relationships and contracts, while avoiding the potential negative consequences of a liquidation. The court further found that limiting the administrators’ personal liability under the deed of guarantee and imposing specific conditions for the conduct of the second creditors' meetings were appropriate to ensure the proper administration of justice and the protection of sensitive information. The court granted all the orders sought by the applicants, subject to the usual liberty to apply to vary or discharge the orders.