LBC Holdings New Zealand Ltd (Administrators Appointed)

[2018] NZHC 1019

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000361

[2018] NZHC 1019

UNDER

sections 239Y, 239AT and 239ADO of the Companies Act 1993

IN THE MATTER OF

CBL CORPORATION LTD (ADMINISTRATORS APPOINTED)

BETWEEN

LBC HOLDINGS NEW ZEALAND LTD (ADMINISTRATORS APPOINTED)

LBC HOLDINGS AMERICAS LTD (ADMINISTRATORS APPOINTED)

LBC HOLDINGS UK LTD (ADMINISTRATORS APPOINTED)

LBC HOLDINGS EUROPE LTD (ADMINISTRATORS APPOINTED)

Continued over page /

Hearing:	On the papers
Judgment:	10 May 2018

RESULTS JUDGMENT OF HINTON J

LBC HOLDINGS NEW ZEALAND LTD (ADMINISTRATORS APPOINTED) & ORS [2018] NZHC 1019 [10 May 2018]

LBC HOLDINGS AUSTRALASIA LTD (ADMINISTRATORS APPOINTED)

LBC TREASURY COMPANY LTD (ADMINISTRATORS APPOINTED)

DEPOSIT POWER LTD (ADMINISTRATORS APPOINTED)

SOUTH BRITISH FUNDING LTD (ADMINISTRATORS APPOINTED)

CBL CORPORATE SERVICES LTD (ADMINISTRATORS APPOINTED)

NEALE JACKSON AND BRENDON JAMES GIBSON

Applicants

This judgment was delivered by me on 10 May 2018 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Solicitors:

Russell McVeagh, Auckland

[1]                 On 23 February 2018, Neale Jackson and Brendon James Gibson, insolvency practitioners and partners in the firm of KordaMentha in Auckland were appointed as administrators of the New Zealand registered companies within the CBL Group.

[2]                 On 8 March 2018, responding to an application dated 7 March 2018, I made orders under s 239Y(4) of the Companies Act 1993 (the Act), extending the period for notice of termination of employees until 22 March 2018, and under s 239ADO of the Act, that the administrators’ personal liability in respect of proposed funding arrangements with ANZ Bank not extend beyond the value of the companies’ available assets, except to the extent agreed with ANZ Bank, plus ancillary orders.

[3]                 On 19 March 2018, the administrators filed  a further application and on     21 March 2018, I made an order extending the convening period for the watershed meeting under s 239AT of the Act until 11 May 2018, and further extending the period in which notice of termination of employees must be given by CBL Corporation under s 239Y until 11 May 2018, plus ancillary orders.

[4]                 On 23 March 2018, a further application was filed and on 27 March 2018, further orders were made under s 239ADH(1) that the administrators’ personal liability in respect of engagement of Goldman Sachs not extend beyond the value of the companies’ available assets, except to the extent agreed with Goldman Sachs, plus ancillary orders. I declined at that time to make an order also sought regarding a bank interest rate agreement, as any agreement was still subject to “internal processes”.

Application for further extension of watershed meeting

[5]                 On 9 May 2018, by interlocutory without notice application for orders under  s 239AT of the Act, the applicants seek a further extension of the convening period for the watershed meeting in relation to the voluntary administration of the relevant companies, from 11 May 2018 to 10 August 2018, together with related orders.

[6]                 These orders need to be made urgently, as the relevant time periods otherwise expire tomorrow, Friday, 11 May 2018.

[7]                 I am satisfied for the reasons set out in the memorandum of counsel for the applicants dated 9 May 2018, and the third affidavit of Neale Jackson in support affirmed 9 May 2018, and previous memoranda and affidavits filed in this matter that the orders sought are appropriate.

[8]                 I therefore make orders in terms of paragraph 1(a)-(e) inclusive of the interlocutory without notice application dated 9 May 2018.

[9]A reasons judgment will follow.

Application for order that no personal liability to ANZ Bank

[10]             In addition, as noted above, when I made the 27 March 2018 orders, I declined to make an order in respect of the administrators’ liability to ANZ Bank New Zealand Limited, Bank of China (New Zealand) Limited or Industrial and Commercial Bank of China (New Zealand) Limited (the lenders) as it was not clear that the relevant interest rate agreement would be entered into between the administrators and the lenders.

[11]             I indicated that the matter should be referred back, if the interest agreement was in fact entered into.

[12]             It has been drawn to my attention, somewhat belatedly, that on 10 April 2018, a further memorandum and updating affidavit of Neale Jackson were filed advising that the lenders and the administrators had entered into the relevant interest agreement which provides that the administrators have no personal liability. The administrators sought an order in accordance with the earlier application.

[13]             I have slightly reworded the order as sought in the 23 March 2018 application following a telephone conference this afternoon with new counsel for the administrators, Mr Stewart QC, Mr Kersey and Mr MacDuff and a memorandum received shortly afterwards.

[14]             For the reasons set out in counsel’s memoranda and Mr Jackson’s affidavits, including his affidavit of 10 April 2018, I now make an order pursuant to s 239ADO of the Act, as follows:

The administrators will have no personal liability to ANZ Bank New Zealand Limited, Bank of China (New Zealand) Limited, or Industrial and Commercial Bank of China (New Zealand) Limited (the Lenders) under a written agreement between the administrators and the Lenders which has been entered into and held in escrow, whereby the administrators will agree to the Lenders increasing the interest rate on two of CBL Corporation’s facilities (the Interest Agreement).

[15]             The costs order already made on 27 Machine 2018 will similarly cover costs relating to the order now made.

[16]Again, reasons will follow.

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Hinton J