Frisken, in the matter of Xpress Transport Solutions Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed)

In the case of Frisken, in the matter of Xpress Transport Solutions Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed), the applicant, Mr Frisken, sought an extension of the convening period for second creditors meetings for six related companies under section 439A(6) of the Corporations Act 2001 (Cth). This was to allow time for a potential deed of company arrangement proposal to be considered. The companies in question had been placed in voluntary administration, with receivers and managers appointed by the National Australia Bank, their largest creditor. The court had to determine whether the application for an extension should be granted, considering the potential benefits to creditors and the companies against the risks of undue delay and prejudice to creditors. The administrator argued that the extension was necessary to allow for the completion of the receivership and the potential for a deed of company arrangement, while the receivers opposed the extension, alleging interference by the sole director and shareholder, Mr Mark Bassal.

The court considered the evidence presented and the competing interests involved. It noted the speculative nature of the proposed deed of company arrangement and the potential for material prejudice to creditors, including former employees who might be delayed in accessing the Fair Entitlements Guarantee scheme. The court also weighed the necessity for a speedy and summary administration against the need to avoid undue speed that could prejudice efforts to maximize returns for creditors. Ultimately, the court dismissed the application for an extension, finding that the speculative benefits of the extension did not outweigh the potential prejudice to creditors. The court held that the evidence did not demonstrate that extending the convening period would realistically result in a better position for the administrator to present a meaningful choice to creditors.

The court ordered that the parties submit written submissions on costs by specified dates, with a limit on the number of pages and a requirement to send copies to the Associate to Cheeseman J. The final orders included granting leave to Car-Trek Australia Pty Ltd to file and serve written submissions on costs by 5:00pm on 16 May 2023 and to the plaintiffs to file and serve any response by 5:00pm on 18 May 2023. The entry of orders was governed by Rule 39.32 of the Federal Court Rules 2011.