Freeman, in the matter of Regional Express Holdings Limited (administrators appointed) (No 3)

The case involved Regional Express Holdings Limited and its subsidiaries (the Rex Companies) which were in external administration. The Administrators of the Rex Companies sought several orders from the court, including an extension of the convening period for the second meeting of creditors, judicial advice that they were justified in entering into certain finance and security agreements, and a limitation of their personal liability in relation to these agreements. The Commonwealth of Australia was granted leave to appear as an interested party.

The court had to determine whether the Administrators were justified in entering into the Commonwealth Finance and Security Agreements, whether they should be granted immunity from personal liability in relation to these agreements, and whether the convening period for the second meeting of creditors should be extended. The court considered the objectives of Part 5.3A of the Corporations Act 2001, which is to provide for the administration of companies in a way that maximises the chance of a better return for creditors than would likely be obtained if the company were wound up.

The court concluded that the orders sought by the Administrators were justified. The extension of the convening period and the entry into the Commonwealth Finance and Security Agreements would advance the objectives of Part 5.3A of the Corporations Act by preserving and achieving a sale of the Regional Business while the Rex Companies continued to trade. The limitation of the Administrators' personal liability was also justified as it was in the best interests of creditors and other stakeholders, and the Commonwealth, which agreed to the limitation, had no prejudice from it.

The court made orders extending the convening period for the second meeting of creditors, granting the Administrators immunity from personal liability in relation to the Commonwealth Finance and Security Agreements, and permitting creditors to apply to vary or discharge any of these orders. The Administrators were also directed to take reasonable steps to notify creditors and the Australian Securities and Investments Commission of the orders. The plaintiffs' costs were to be treated as costs in the administrations of the Rex Companies.