Park, in the matter of Collection House Limited (Administrators Appointed)

The case involves a court application by Mr John Park, Mr Benjamin Campbell and Ms Kelly-Anne Trenfield, who are the joint and several voluntary administrators of Collection House Limited (Administrators Appointed) (the Company). They have applied for a further extension of the convening period for the calling of a second meeting of creditors of the Company. The application is made pursuant to s 447A(1) of the Corporations Act 2001 (Cth) (Corporations Act) for a further extension of the convening period to 30 September 2022. The administrators were appointed to the Company on 29 June 2022, with the consequence that the second meeting of creditors was required to be convened under s 439A on or before 27 July 2022. The convening period was then extended to 26 August 2022 by Downes J.

The legal issues in this case revolve around the power of the court to extend the convening period for the calling of a second meeting of creditors under s 447A(1) of the Corporations Act and the circumstances in which such an extension should be granted. The administrators argue that the extension is necessary to allow sufficient time to sell the business of the Company as a going concern by adopting one of two processes, being either a competitive sale of the business or a recapitalisation process.

The court found that the administrators had engaged in a substantial amount of work in the performance of their statutory duties, including the assumption of managerial control of the Company, and the explanation of the process to employees, suppliers, customers and creditors. The court also found that the administrators had commenced an urgent process to restructure or recapitalise the business of the Company, and they had taken several steps to achieve those ends. The court further found that the administrators had also negotiated with, and entered into a financing agreement with the major secured creditor, Westpac Banking Corporation, to fund the operations pending the completion of the recapitalisation process.

The court granted the application and extended the convening period to 30 September 2022, with orders permitting the meeting to be convened at any time before that date, provided that the administrators gave notice of it in accordance with r 75-225 of the Insolvency Practice Rules (Corporations) 2016 (Cth) not less than five business days prior to the meeting. The court also made orders that the administrators could convene the meeting earlier if necessary.