Wirecard NZ Limited - [2020] NZHC 1804

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001187

[2020] NZHC 1804

UNDER Part 19 of the High Court Rules and Part 15A of the Companies Act 1993

IN THE MATTER OF

WIRECARD NZ LIMITED

AND

CONOR JOHN McELHINNEY and ANDREW JOHN GRENFELL

Applicants

Hearing: On the papers

Counsel:

K E Cornegé and S M Jass for Applicants

Judgment:

24 July 2020

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 24 July 2020 at 10.30 am.
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date………………………

RE WIRECARD NZ LTD [2020] NZHC 1804 [24 July 2020]

Introduction

[1] The applicants, who are insolvency practitioners, have been appointed as administrators of Wirecard NZ Ltd (Wirecard NZ) under Part 15A of the Companies Act 1993 (the Act).

[2]The applicants seek orders and directions under Part 15A of the Act as follows:

(a)That the convening period in the administration of Wirecard NZ as defined in s 239AT(2) of the Act, be extended to 5 October 2020 (extension of 40 working days) under s 239AT(3); and

(b)that the statutory termination period for employees be extended under s 239Y(4) of the Act to an end date of 12 October 2020, instead of 27 July 2020.

[3] The applicants say that the extension of time is necessary to allow them to investigate the options for disposal of the company’s business and to put those into effect. Further, they say if they can achieve a sale of the company’s business, then this would offer a real prospect of continuation of employment for employees, and ongoing trade for creditors.

Factual background

[4] Wirecard NZ is a developer and licensor of proprietary software products utilised in the financial services industry.

[5] Wirecard NZ is wholly owned by Wirecard Technologies GmbH, which has filed for insolvency proceedings. Wirecard NZ’s business is largely independent from the wider group. Wirecard Australia Pty Ltd is a wholly owned subsidiary of Wirecard NZ and is also in administration.

[6]On their appointment as administrators, on 13 July 2020, Wirecard NZ had:

(a)Three branches, respectively located in Auckland, Santa Domingo (Dominican Republic), and Athens (Greece), with leased premises in each of those locations;

(b)121 employees (29 in Auckland, 18 in the Dominican Republic, and 74 in Greece);

(c)168 known unsecured creditors (including employees); and

(d)Two secured creditors of registered purchase money security interests.

[7] The administrators are in the process of investigating options for a sale of some or all of Wirecard NZ’s business. Currently, the administrators are proposing that indicative offers are made by 31 July 2020 and final offers by 21 August 2020. If a buyer is found, it is estimated that approximately one month will be required for due diligence and then a further month to complete settlement. There will also be a period of transition to the new purchasers.

[8] The administrators’ objective for the company is to continue trading…

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 Wirecard NZ Limited

Details

AGLC: Wirecard NZ Limited [2020] NZHC 1804
Case: [2020] NZHC 1804
Decision Date: 24 July 2020

CaseChat Overview and Summary

The applicants, insolvency practitioners appointed as administrators of Wirecard NZ Ltd, sought orders to extend the convening period and the statutory termination period under Part 15A of the Companies Act 1993. The applicants argued that the extension was necessary to allow time to investigate and implement options for the disposal of the company’s business, which would offer a real prospect of continuation of employment for employees and ongoing trade for creditors. The primary legal issues were whether an extension of the convening period and the statutory termination period was appropriate in the circumstances. The Court considered the factors relevant to determining the appropriateness of an extension, including the size and scope of the business, the complexity of the administration, and the potential for a sale of the business as a going concern. The Court found that a 40-day extension was appropriate, as it would allow the administrators to investigate and implement options for the disposal of the company’s business and complete investigations and finalise their report to creditors. The Court also found that it was appropriate to extend the statutory termination period, as it would avoid the disruption of terminating and rehiring employees and preserve the key assets of the business. The Court granted the application for extensions and ordered that the convening period be extended to 5 October 2020, and the statutory termination period be extended to 12 October 2020 in respect of all of the company’s employees. The Court also ordered that the administrators advertise the orders, make a copy of the orders available on their website, and provide a copy of the orders to the employees of the company through ordinary communication channels. The costs of the application were to be paid out of the assets of Wirecard NZ, subject to the approval of the Court.

Orders