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In the matter of Vical NSW Pty Limited (Administrators Appointed) ACN 065 390 016 and Arsonello Pty Limited (Administrators Appointed) ACN 080 140 843 [2015] NSWSC 2022 (19 March 2015)

Last Updated: 18 February 2016



Supreme Court
New South Wales

Case Name:
In the matter of Vical NSW Pty Limited (Administrators Appointed) ACN 065 390 016 and Arsonello Pty Limited (Administrators Appointed) ACN 080 140 843
Medium Neutral Citation:
Hearing Date(s):
19 March 2015
Date of Orders:
19 March 2015
Decision Date:
19 March 2015
Jurisdiction:
Common Law
Before:
Brereton J
Decision:
Convening period extended. Leave reserved to affected persons to apply.
Catchwords:
CORPORATIONS – voluntary administration – meeting of creditors – further extension of convening period to permit sale of assets as going concern – whether assets could be sold as going concern upon conclusion of administration – position of employees and creditors under administration.
Legislation Cited:
Category:
Consequential orders (other than Costs)
Parties:
Philip Campbell-Wilson & Simon John Cathro as Administrators of Vical NSW Pty Ltd (ACN 065 390 016) and Arsonello Pty Ltd (Administrators Appointed) (ACN 080 140 843) (plaintiffs)
Representation:
Counsel:
J Hynes (plaintiff)

Solicitors:
William James (plaintiffs)
File Number(s):
2014/281944

JUDGMENT (EX TEMPORE)

  1. HIS HONOUR: On 25 September 2014, for reasons given that day in In the matter of Vical NSW Pty Limited and Arsonello Pty Limited (Administrators Appointed) [2014] NSWSC 1325, I made the following orders:
  2. By interlocutory process, leave to file which is sought today, the administrators apply for a further extension of the convening period, for a period of approximately four months to 27 July 2015. The purpose of the extension is to enable their endeavours to sell the pharmacy businesses described in the previous judgment as a going concern, in circumstances where those endeavours appear promising but will require further time in order to obtain the requisite approvals, to undertake the requisite due diligence, and to obtain the approvals and consents that are necessary in connection with the sale of a pharmacy business.
  3. As indicated in the previous judgment, this does not appear to be a case in which the extension of a convening period is warranted on the basis of the prospect that a deed of company arrangement might enhance the return to creditors, but rather on the basis that the interests of the creditors appear to lie in achieving a sale of the businesses as a going concern, which in turn is dependent upon maintaining the statutory moratorium associated with administration – a moratorium which would not persist in the event of the only apparent alternative, which would be liquidation.
  4. The evidence indicates that the lessor of the premises, Scentre Group Limited (formerly Westfield) the supplier of the stock to the pharmacies Symbion Pty Limited, and the secured creditor who appointed the administrator, Bankwest Limited, are supportive of the continuation of the administration for that purpose.
  5. Following the orders made on the last occasion, notice of those orders, which included liberty to any party effected to apply to set aside or vary them, was provided by the administrators to all known creditors, and no such application has been forthcoming.
  6. The employees of the companies have remained in employment, save to the extent that some have voluntarily resigned. They will continue to be employed if the administration continues, with the potential of then securing continuing employment in the business if it is sold as a going concern. If the administration is not continued, their employment will have to be terminated.
  7. The administrators are continuing to trade the business and, as I understand it, in respect of debts incurred during the administration from ongoing trade, the administrators will be personally liable, and there is no suggestion that the trade creditors are not being paid in accordance with their terms.
  8. So far as the pre-administration debts are concerned, it appears the prospects of any return to trade creditors are slim, whether on the basis of administration or liquidation; but they are no better under liquidation than under administration.
  9. So far as the secured creditors are concerned, as I have indicated they appear to support the continuation of the administration, and the prospects of their recovering are significantly better if a going concern sale can be achieved than otherwise. As the statutory moratorium would come to an end if the company were to go into liquidation or the administration were to otherwise cease, the ability to achieve a going concern sale in that context would not exist.
  10. For those reasons, it seems to me that it is in the interests of the administration generally that the convening period be further extended but, for the reasons given on the last occasion, notice of that extension and liberty to apply to set aside or vary it should be reserved to any person affected.
  11. The Court orders that:

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