Kijurina (as Administrator), in the matter of IGEA Life Sciences Pty Ltd (Administrators Appointed) v IGEA Life Sciences Pty Ltd (Administrators Appointed) (No 2)
[2014] FCA 764
•23 July 2014
FEDERAL COURT OF AUSTRALIA
Kijurina (as Administrator), in the matter of IGEA Life Sciences Pty Ltd (Administrators Appointed) v IGEA Life Sciences Pty Ltd (Administrators Appointed) (No 2) [2014] FCA 764
Citation: Kijurina (as Administrator), in the matter of IGEA Life Sciences Pty Ltd (Administrators Appointed) v IGEA Life Sciences Pty Ltd (Administrators Appointed) (No 2) [2014] FCA 764 Parties: BRENT TREVOR-ALEX KIJURINA & RICHARD ALBARRAN IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF IGEA LIFE SCIENCES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 125 930 878) and IGEA LIFE SCIENCES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 125 930 878) File number: NSD 477 of 2014 Judge: FARRELL J Date of judgment: 23 July 2014 Catchwords: CORPORATIONS – external administration – application pursuant to s 447A of the Corporations Act 2011 (Cth) – further extension of convening period – where initial extension brief – where extension might facilitate sale of business as going concern Legislation: Corporations Act 2001 (Cth) Cases cited: In the matter of IGEA Life Sciences Pty Ltd [2014] FCA 509
In the matter of Ply (ACT) Pty Ltd (No 2) [2013] FCA 503Date of hearing: 23 July 2014 Date of last submissions: 23 July 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 6 Counsel for the First Plaintiff: Mr MD Freeman Solicitor for the First Plaintiff: Nelson McKinnon Lawyers Counsel for the Second Plaintiff: The Second Plaintiff did not appear
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 477 of 2014
IN THE MATTER OF IGEA LIFE SCIENCES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 125 930 878)
BETWEEN: BRENT TREVOR-ALEX KIJURINA & RICHARD ALBARRAN IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF IGEA LIFE SCIENCES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 125 930 878)
First PlaintiffIGEA LIFE SCIENCES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 125 930 878)
Second PlaintiffJUDGE:
FARRELL J
DATE OF ORDER:
23 JULY 2014
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to section 447A(1) of the Corporations Act 2001 (Cth) ("the Act") that the period within which the Administrators of the second plaintiff must convene a meeting of creditors of the second plaintiff under section 439A of the Act be extended up to and including 29 August 2014.
2.Pursuant to section 447A(1) of the Act that Part 5.3A of the Act is to have effect in relation to the second plaintiff such that the meeting of creditors of the second plaintiff required by section 439A of the Act may be held at any time during, or within 5 business days after the end of, the convening period as extended by order 2 above, notwithstanding the provisions of section 439A(2) of the Act.
3.Liberty to the plaintiffs to apply to the Court for any further extensions of the convening period at any time prior to 29 August 2014.
4.Liberty to apply to any person who can demonstrate sufficient interest to modify or discharge these orders upon 3 days' notice being given to the plaintiffs.
5.An order that the costs and expenses of this application be costs and expenses of the Administration of the second plaintiff.
6.The date in order 4(b) of the Orders of the court made on 19 May 2014 be extended to 29 August 2014.
THE COURT NOTES THAT:
7.The First Plaintiffs or their solicitor will notify the Creditors' Committee, Tacca Industries Pty Ltd, Westpac Banking Corporation, Fife Capital Pty Ltd and the Australian Securities and Investments Commission of these orders by 24 July 2014.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 477 of 2014
IN THE MATTER OF IGEA LIFE SCIENCES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 125 930 878)
BETWEEN: BRENT TREVOR-ALEX KIJURINA & RICHARD ALBARRAN IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF IGEA LIFE SCIENCES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 125 930 878)
First PlaintiffIGEA LIFE SCIENCES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 125 930 878)
Second PlaintiffJUDGE:
FARRELL J
DATE:
23 JULY 2014
PLACE:
SYDNEY
REASONS FOR JUDGMENT
On 19 May 2014 I made orders pursuant to s 439A(6) of the Corporations Act 2001 (Cth) (Corporations Act) extending the period within which the administrators of the second plaintiff (Company) must convene a meeting of creditors under s 439A of the Corporations Act up to 25 July 2014. By interlocutory process filed on 23 July 2014, the first plaintiff (Administrators) seek a further extension of this period pursuant to s 447A(1) of the Corporations Act until 29 August 2014. The background to this matter is set out in In the matter of IGEA Life Sciences Pty Ltd [2014] FCA 509 (Re IGEA). Terms used in these reasons bear the same meaning as in that judgment.
The Administrators sought the further extension for the reasons set out in an affidavit of Mr Kijurina sworn on 22 July 2014.
I summarised the principles relevant to the exercise of the Court’s discretion to make orders under s 447A(1) to extend the convening period for a second time in In the matter of Ply (ACT) Pty Ltd (No 2) [2013] FCA 503 at [7]-[8].
I am satisfied that I should make the orders, taking into account the following considerations:
·The first extension was for 45 days. The further extension is for a little over a month ending on 29 August 2014. Having regard to the complexity of the issues the Administrators have to address, these extensions are reasonable and appear to be required to accommodate the steps necessary to sell two businesses conducted by the Company as trustee of a trading trust;
·The Administrators have negotiated and executed an agreement for sale of the “Body Trim” business. The agreement was executed on 21 July 2014 following extensive due diligence conducted by a number of prospective purchasers;
·The Administrators are in the process of negotiating the sale of the “Skin Physics” business. While the prospective purchaser has indicated an intention to take some employees, they are still being identified. The purchaser also wishes to secure a sub-lease of the premises currently occupied by the Company and negotiations are underway with the landlord. The Administrators expect the sale agreement of the “Skin Physics” business to be executed imminently and completed by 29 August 2014;
·It is necessary to complete negotiations with the owner of the intellectual property for the “Skin Physics” and “Body Trim” brands so that the purchasers may acquire rights to that property, and obtaining those rights is (or will be) a condition of the sale agreements;
·No one has proposed a deed of company arrangement and the Administrators do not think that likely. Accordingly, if a meeting of creditors were convened now, it is most likely that the Company would go into liquidation.
·Under the trust deed which governs the IGEA Life Sciences Trust, if the Company is placed in liquidation its office as trustee is automatically vacated, necessitating an approach to the Supreme Court of New South Wales to replace the Company as trustee;
·It is not clear that the purchasers of both businesses would proceed with the transactions if the Company enters into liquidation and it is possible that the arrangements with the intellectual property owners would not proceed;
·As a number of creditors are also suppliers, the sale agreements will allow the suppliers to continue to supply up to and after the completion of the sale agreements;
·It is in the best interest of the employees if the “Skin Physics” sale agreement is completed, as it appears a number of them will be transferred to the purchaser under the sale agreement;
·In the Administrators’ opinion, the sale of the business is in the best interests of the creditors as it will result in a higher price than would otherwise be achieved in liquidation; and
·The Administrators have substantially recouped the costs of the administration through revenue earned from the Company such that the benefit of the net proceeds of the sale of the businesses will be available for distribution as a dividend to unsecured creditors (there is currently no net debt to the secured creditor). Counsel for the Administrators indicated that this would see unsecured creditors receiving approximately 19 cents in the dollar, as opposed to 11 cents in the dollar in a liquidation scenario.
I note that on 21 July 2014 the Administrators contacted the Committee of Creditors, each of the secured creditors, the landlord and the Australian Securities & Investments Commission (ASIC) notifying them of the Administrators’ intention to make this application. No response has been received to any of these letters.
On 19 May 2014 I also made an order pursuant to s 37AF of the Federal Court of Australia Act 1976 that certain elements of the affidavit of Mr Kijurina be suppressed until 26 July 2014. In the circumstances, it is appropriate to extend that order until 29 August 2014.
I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell. Associate:
Dated: 23 July 2014
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