Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed)

The matter was heard by Middleton J of the Federal Court of Australia. The case involved Virgin Australia Holdings Ltd and its subsidiaries, which were under administration due to the severe impact of the COVID-19 pandemic on their business operations. The administrators sought various orders to adapt the administration process to the constraints posed by the pandemic, including changes to the methods of holding creditors' meetings and providing notice, as well as adjustments to time limits for certain administrative actions. The legal issues centred on whether the existing legislative and regulatory frameworks could be adapted to accommodate these changes while still complying with the spirit of the law, particularly in light of the exigencies caused by the pandemic.

The court considered the necessity for flexibility in the application of existing laws to ensure the efficient administration of the companies amidst the pandemic. It noted that while strict adherence to existing laws was imperative, the unprecedented circumstances warranted a pragmatic approach. The court examined the provisions of the Corporations Act 2001 (Cth) and the Insolvency Practice Schedule (Corporations) 2016, along with the Insolvency Practice Rules (Corporations) 2016, to determine if and how they could be adapted to allow for electronic meetings and communications. The court also considered the principles governing the extension of time limits under the Corporations Act.

The court concluded that the proposed adaptations were reasonable and necessary under the circumstances. It granted the administrators' requests to hold creditors' meetings by video-link or telephone, to send notices by email, and to extend certain time limits for administrative actions. The court emphasised that these measures were aimed at ensuring the best interests of the creditors and the efficient administration of the companies during the pandemic.

The final orders included provisions for notice of meetings to be given by email and published on relevant websites, allowed for meetings to be held by video-link or telephone, modified the process for forming a committee of inspection, extended the time for responding to creditor requests for information, and granted an extension for the administrators to decide on giving notice to lessors. The court also specified the manner in which these orders were to be communicated to creditors and the Australian Securities and Investments Commission (ASIC).