2. May 2011 08:51
The case concerned an application by the Administrators of Aqa Oysters Limited (“the Company”) for a second extension of the convening period and an order dispensing with the requirement of s 439A(2) of the Corporations Act 2001. The Company owned and operated a complex oyster growing business through oyster farms the subject of aquaculture leases and licences granted by the State governments: . NAB and Elders both held fixed and floating charges over the company and its assets, including the leases: . Elders indicated that it may put forward a Deed of Company Arrangement proposal, but that could not be finalised until asset sales had been completed.
The receiver appointed by NAB was successful in selling pieces of the Company’s assets separately but indicated that the convening period would end prior to the completion of the majority of contracts for sale. This may, in the receivers view, potentially disrupt settlement of the sales. The receiver, in affidavit evidence, set out reasoning as to why a second extension of the convening period should be made: . The committee of creditors agree that the convening period ought to be extended: .
The administrator noted that he proposed to adjourn the meeting if no extension of the convening period was granted and in doing so would incur further costs: . The administrator expressed the view that creditors of the Company will not be disadvantaged by any extension: .
The court noted that it requires good or sound reasoning for exercising its power to extend the convening period and will do so having regard to Part 5.3A: .
On the basis that there is a prospect of a DOCA proposal being put forward, the court found that the convening period should be extended. There was no unreasonable delay in the course of the receivership and further, there are no parties which appear to be prejudiced by the moratorium associated with the administration: .
Relevant paragraphs of Ford