Hayes, in the matter of Henry Walker Eltin Group Limited (subject to deed of company arrangement) (No 2)

This case involves an application for directions concerning the remuneration of deed administrators in relation to Henry Walker Eltin Group Limited (HWE) and its subsidiaries. The administrators sought directions to serve a Form 16 notice and a copy of the affidavit intended to be relied on by them, on each of the five largest shareholders of HWE and on the directors of HWE. The application was brought before the court following the voluntary administration of HWE in 2005, which led to the appointment of deed administrators. The administration has been complex, with substantial business assets and operations realised across multiple jurisdictions. The deed administrators have paid out to creditors and hold funds in relation to the Mining Pool deed and the Non-Core deed.

The court was required to determine the appropriate course of action regarding the service of a Form 16 notice and any affidavit to be relied on by the deed administrators. The administrators argued that, given the circumstances, there was no utility in serving notice to former creditors and that no useful purpose would be served by giving notice to any person other than a shareholder of HWE and its directors. However, the administrators suggested serving a Form 16 notice on the five largest shareholders of HWE and the directors of HWE. The court considered whether serving notice on a smaller group of shareholders would still provide a sufficient pool from which any likely objector could be found.

The court found that, in the circumstances, there was no utility in serving notice to former creditors. The court also determined that serving notice on any person other than a shareholder of HWE and its directors would not serve any useful purpose. However, the court was of the view that, in respect of shareholders, a Form 16 notice and any affidavit to be relied on should be served on the 10 largest shareholders, representing 23.23% of HWE's issued capital. The court was satisfied that this spread of shareholders, representing nearly one-quarter in value of HWE's issued capital, would provide a sufficient pool from which any likely objector could be found.

Directions will be made accordingly, requiring the first, second and third plaintiffs to serve a Form 16 notice and a copy of the affidavit intended to be relied on by them, on each of the 10 largest shareholders of HWE and on the directors of HWE.