Silvia, in the matter of FEA Plantations Ltd (Administrators Appointed)

The case involves the deed administrators of FEA Plantations Ltd (FEAP) and Forest Enterprises Australia Ltd (FEA), who are the plaintiffs. They sought to vary the Deeds of Company Arrangement (DOCA) under section 447A of the Corporations Act 2001 (Cth). The application was made to extend the duration of the Deeds of Company Arrangement beyond the original termination date, in order to allow time for the negotiations between the deed administrators, Commonwealth Bank of Australia (CBA) and Australia and New Zealand Banking Group Limited (ANZ) to be finalised and for the new deeds of company arrangement to be put to a vote at creditors' meetings.

The key legal issue before the court was whether it had the power to vary the Deeds of Company Arrangement under section 447A of the Corporations Act 2001 (Cth). The court had to consider whether the variation would cause confusion or inconvenience to the Growers, and whether it would adversely affect the interests of creditors. The court also had to consider the anticipated costs of convening creditors' meetings and the potential benefit of the variation to creditors.

The court found that it had the power to vary the Deeds of Company Arrangement under section 447A of the Corporations Act 2001 (Cth). The court noted that the variation was simple and involved extending the operation of the Deeds of Company Arrangement by changing the termination date in clause 3.1.5 of the Deeds of Company Arrangement. The court found that the variation did not adversely affect the interests of creditors and was in their best interests as it would allow time for the negotiations to be finalised and for the new deeds of company arrangement to be put to a vote at creditors' meetings. The court also found that the variation would not cause confusion or inconvenience to the Growers and that the costs of convening creditors' meetings would adversely affect unsecured creditors by reducing the available pool of funds for distribution.

ORDERS:
1. Pursuant to s 447A(1) of the Corporations Act 2001 (Cth) (‘Act’), Part 5.3A of the Act is to operate in relation to the second plaintiff, FEA Plantations Ltd (ACN 055 969 429) (subject to deed of company arrangement) (receivers appointed) (‘FEAP’), in such a way as to empower the Court to vary the deed of company arrangement dated 14 December 2010 between FEAP and the deed administrators, Brian Raymond Silvia and Peter Paul Krejci (‘FEAP DOCA’).
2. Clause 3.1.5 of the FEAP DOCA is varied by deleting clause 3.1.5 and substituting therefor the following:
“3.1.5 On 22 June 2013 unless prior to that time the deed is further extended by court order or the Creditors have resolved to extend the Deed pursuant to a meeting of creditors convened pursuant to s 445F of the Act.”
3. Pursuant to s 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to the third plaintiff, Forest Enterprises Australia Ltd (ACN 009 553 548) (subject to deed of company arrangement) (receivers and managers appointed) (‘FEA’), in such a way as to empower the Court to vary the deed of company arrangement dated 14 December 2010 between FEA and the deed administrators, Brian Raymond Silvia and Peter Paul Krejci (‘FEA DOCA’).
4. Clause 3.1.5 of the FEA DOCA is varied by deleting clause 3.1.5 and substituting therefor the following:
“3.1.5 On 22 June 2013 unless prior to that time the deed is further extended by court order or the Creditors have resolved to extend the Deed pursuant to a meeting of creditors convened pursuant to s 445F of the Act.”
5. An order pursuant to s 477A(1) of the Act that Part 5.3A of the Act is to operate in relation to the second plaintiff, FEAP, and the third plaintiff, FEA, as if its provisions permitting notice of any future meeting of creditors (‘Notice’) and any other documents (‘Documents’) is to be given to creditors of the company by:
5.1 not less than 5 business days before the meeting, sending the Notice to the personal electronic address of each creditor of the company who has requested that the deed administrators communicate with her, him or it by electronic means;
5.2 not less than 5 business days before the meeting, sending the Notice to the personal electronic address of each creditor of the company, for whom or which the deed administrators have a personal electronic address, by electronic means;
5.3 not less than 5 business days before the meeting, sending a paper copy of the Notice to all known creditors of the company to whom or which no notification is sent pursuant to sub-paragraphs 5.1 or 5.2 of this Order, along with a statement that the Documents are available on the deed administrators’ website, www.briferrier.com.au, and on the third plaintiff’s website, www.fealtd.com; and
5.4 causing a notice to be published in a national newspaper (at least 5 business days before the meeting of creditors) providing:
5.4.1 notice of the date, time and location of the meeting of creditors;
5.4.2 notice that the Documents are available on the deed administrators’ website, www.briferrier.com.au, and on the third plaintiff’s website, www.fealtd.com; and
5.4.3 details of a telephone hotline number by which any creditor may contact the deed administrators to request a paper or electronic copy of the Documents.
6. An order that the costs and expenses of this application be costs and expenses in the deed administration of FEAP and FEA.