Park, in the matter of Collection House Limited (Subject to a Deed of Company Arrangement)

The case involves Collection House Limited, a debt collection provider, which entered into voluntary administration following significant financial losses due to COVID-19 related restrictions. The Deed Administrators, appointed as voluntary administrators of Collection House, sought leave to transfer existing shares in the company to Credit Corp Group Limited or its nominee as part of a Deed of Company Arrangement (DOCA). The application was made to the court under section 444GA(1)(b) of the Corporations Act 2001 (Cth). The legal issues centred on whether the share transfer would unfairly prejudice the interests of Collection House's members and whether it would benefit creditors by preserving the ongoing business of the company.

The court found that the share transfer would not unfairly prejudice the interests of Collection House's members, as the equity in the company had no residual economic value. The court reasoned that the transfer would benefit all classes of creditors by increasing their estimated returns and preserving the business, thereby advancing the objects of Part 5.3A of the Act. The court also noted that while some shareholders had expressed disappointment about not receiving consideration for their shares, this did not amount to unfair prejudice. Consequently, the court granted the relief sought, allowing the Deed Administrators to transfer the shares as per the terms of the DOCA, and made orders to permit the execution of share transfer documents and the entry of Credit Corp's name on the company's register of members.

The final orders included granting leave for the transfer of shares, permitting the Deed Administrators to execute necessary documents, and making the applicants' costs part of the deed administration. Additionally, the court ordered that personal information disclosed in communications between Collection House and its shareholders be treated as confidential.