Park (Administrator), in the matter of Surfstitch Group Limited

In the matter of Surfstitch Group Limited, the administrators applied to the Federal Court for an extension of the convening period for the second meeting of creditors. The companies were in voluntary administration due to shareholder class action lawsuits and other issues. The administrators sought an extension to 21 December 2017 to allow time to formulate proposals for the sale of operating subsidiaries and to seek recapitalisation proposals. The primary legal issue was whether the extension was in the interests of creditors. The court considered the potential benefits of the extension against any prejudice to creditors. It found that there was no evidence of any prejudice to creditors and that the extension would allow the administrators to optimise the outcome for creditors.

The court reasoned that the extension was in the interests of creditors, as it would provide more time for the administrators to investigate the companies' affairs, formulate sale processes for the subsidiaries, and seek recapitalisation proposals. The court noted that the administrators had already made significant progress in these areas and that extending the convening period would not prejudice any creditor, given that the sole secured creditor, Westpac, had sufficient cash cover. The court also considered the need for continuity in the administration process and the potential benefits of a more extended period for the administrators to work with the subsidiaries' boards and management. The court granted the application, extending the convening period and allowing the meetings to be held within five business days after the end of the extended period. The court also ordered that notice of the meetings be given to creditors and that the administrators' costs be paid from the companies' assets.