Re Postie Plus Group Ltd - [2014] NZHC 1337

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2014-404-001392 [2014] NZHC 1337

IN THE MATTER of Part 15A of the Companies Act 1993

IN THE MATTER

of POSTIE PLUS GROUP LIMITED (ADMINISTRATORS APPOINTED)

BETWEEN

DAVID JOHN BRIDGMAN and COLIN THOMAS McCLOY

Applicants

Hearing: On the papers

Counsel:

LA O'Gorman for Applicants

Judgment:

13 June 2014

JUDGMENT OF ASHER J

This judgment was delivered by me on Friday, 13 June 2014 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Buddle Findlay, Auckland.

BRIDGMAN and McCLOY [2014] NZHC 1337 [13 June 2014]

Background to this application

[1] On 3 June 2014 David John Bridgman and Colin Thomas McCloy, insolvency practitioners and partners in the firm of PricewaterhouseCoopers, were appointed as administrators of Postie Plus Group Ltd (Postie Plus). They apply for an extension of the time periods under ss 239AT and 239Y of the Companies Act
1993 on a without notice basis. The extensions are 61 days (to 1 September 2014) and 82 days (to 1 September 2014) respectively. Mr McCloy has filed an affidavit in support of the application.

[2] Postie Plus is a retail business specialising in men’s, women’s and children’s apparel and health and beauty products. It has over 100 years of history and is one of the country’s largest retail chains. It operates over 80 stores throughout New Zealand and employs approximately 650 staff nationwide. It is listed in the New Zealand Stock Exchange. Trading in the shares of Postie Plus is currently suspended.

[3] On 4 June 2014 the administrators entered into a heads of agreement with potential purchasers of Postie Plus. A statement was released to the media announcing the intended purchase. The parties will endeavour to complete on or about 2 July 2014.

[4] As administrators of Postie Plus, Messrs Bridgman and McCloy (“the administrators”) must convene a watershed meeting within the “convening period” for Postie Plus.1 The convening period is stated in s 239AT(3) to be the period of 20 working days after the date on which administrators are appointed.

[5] Given the large number of employees and sites, and the fact that there are 20 secured creditors and about 230 unsecured creditors, the administration of Postie Plus is complex. The administrators are concerned that the requirements to provide notices and reports for the watershed meeting by 1 July 2014 would significantly distract them from their immediate goal of completing a sale of the business.
Mr McCloy asserts that the sale of the business will be the best outcome for creditors

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

and employees of Postie Plus, and that the next four weeks will be critical if they are to complete such a sale. For example, there is the potential for some creditor liability to be assumed by the potential purchaser given that the business has been sold as a going concern. Further, there is the possibility that the estimated timeframe for completion of the sale will be delayed.

[6] If…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Postie Plus Group Ltd

Details

AGLC: Re Postie Plus Group Ltd [2014] NZHC 1337
Case: [2014] NZHC 1337
Decision Date: 13 June 2014

CaseChat Overview and Summary

The applicants, David John Bridgman and Colin Thomas McCloy, insolvency practitioners appointed as administrators of Postie Plus Group Ltd, sought an extension of certain statutory deadlines under the Companies Act 1993. Specifically, they requested an extension of the convening period for the watershed meeting and the notice period for terminating employee contracts. The application was heard on the papers without notice to creditors and employees, which the court deemed appropriate given the complexity of the administration and the lack of likely prejudice to creditors or employees.

The court examined whether the extensions were justified under the principles governing such applications. It noted that the administration of Postie Plus was complex, involving numerous employees, multiple sites, and both secured and unsecured creditors. The administrators argued that the extensions were necessary to focus on the potential sale of the business, which they believed would be the best outcome for creditors and employees. The court balanced the need for expediency in administration against the requirement for administrators to conduct their duties properly and for creditors to make informed decisions at the watershed meeting. It concluded that the extension would facilitate a constructive outcome and allow for a more effective sale process.

The court also considered the extension of the notice period for terminating employee contracts, acknowledging the practical difficulties of completing such tasks within the statutory timeframe and the potential for unnecessary disruption if the sale did not proceed. The court found that the lack of opposition from employees and the support from the primary secured creditor further justified the extension.

In light of these considerations, the court granted the requested extensions, with the condition that notice of the orders be widely advertised and that leave to apply for modification or discharge of the orders would be granted to any interested party. The court also ordered that the costs of the application be treated as an expense incurred by the administrators in performing their duties.

Orders