CBL Corporation Limtied v Jackson

[2018] NZHC 2800

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000361

[2018] NZHC 2800

UNDER

Sections 239AT and 239AZ of the Companies Act 1993

IN THE MATTER OF

CBL CORPORATION LIMITED, LBC HOLDINGS NEW ZEALAND LIMITED, LBC HOLDINGS AMERICAS LIMITED, LBC HOLDINGS UK LIMITED, LBC HOLDINGS EUROPE LIMITED, LBC HOLDINGS AUSTRALASIA LIMITED, LBC TREASURY COMPANY LIMITED, DEPOSIT POWER LIMITED, SOUTH BRITISH FUNDING LIMITED, CBL CORPORATE SERVICES LIMITED (ALL ADMINISTRATORS APPOINTED)

AND

NEALE JACKSON and BRENDON JAMES GIBSON

Applicants

Hearing:	On the papers
Judgment:	30 October 2018

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 30 October 2018 at 3.00 pm

pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar

Date………………………

RE CBL CORPORATION LTD & ORS (ADMINISTRATORS APPOINTED) [2018] NZHC 2800 [30 October 2018]

[1]    Neale Jackson and Brendon James Gibson are the Administrators appointed to CBL Corporation Ltd (administrators appointed) and nine subsidiaries. The watershed meeting required by s 239AT of the Companies Act 1993 has been adjourned three times; it was initially scheduled for 18 May 2018 and adjourned by the Administrators to a date no later than 2 July 2018.1 Subsequently, I made orders adjourning the watershed meeting to 17 August 20182 and again to 17 November 2018.3 The Administrators now apply without notice for orders (1) adjourning the watershed meeting to 18 December 2018 and (2) extending the convening period in relation to the subsidiaries to 11 December 2018.4

[2]    The application is brought without notice under r 7.46 of the High Court Rules because the Administrators consider that service would be time-consuming and onerous, likely to cause undue delay and prejudice and adequate notice to those affected can be achieved through other means. The previous applications were made without notice on the same grounds. I accept that because of the size of the CBL Group and the number of creditors located overseas and the nature of the application, it is appropriate to deal with it on a without notice basis.

[3]    The grounds for the application are the same as those previously advanced. In essence, the Administrators are of the view that the sale of businesses and assets of the CBL Group (as a going concern if possible) will produce the best outcome for the creditors of the companies in administration. Some assets have already been realised but the Administrators regard an overall restructuring as the most desirable course. Efforts towards developing a viable restructuring plan have been underway for some months. The Administrators consider that a successful restrucring would ideally involve CBL Insurance Ltd (in interim liquidation) (CBLI). The substantive liquidation application in relation to CBLI is for hearing on 12 November 2018. The Administrators anticipate that their efforts towards restructuring of the wider group will be significantly affected by the outcome of that application.

1      Companies Act 1993, s 239AZ(1).

2      CBL Corporation Ltd (Administrators Appointed) [2018] NZHC 1400.

3      CBL Corporation Ltd (Administrators Appointed) [2018] NZHC 1998.

4      Companies Act 1993, s 239AT(3).

[4]    I have already considered the applicable legal principles in my previous decisions. It is unnecessary to do so again. It is sufficient to say that in respect of both an extension of the convening period and adjournment of the watershed meeting a balance is to be struck between the expectation that the Administrators will proceed as quickly as reasonably possible towards reaching a decision regarding the best way forward and ensuring that positive steps towards the best outcome for creditors are not undermined by undue haste.

[5]    Given that the watershed meeting has already been adjourned for a total of six months, the prospect of further delay would usually be regarded with some caution. But in the context of this very large and complex administration, in which the ultimate fate of CBLI has always loomed as a significant factor, I do not see anything objectionable in an adjournment of the watershed meeting for a further month.

[6]    The applications are granted and orders made as sought in the interlocutory application dated 23 October 2018.

P Courtney J