Australia, June 9 -- New South Wales Land and Environment Court issued text of the following judgement:
1. By Originating Process filed on 6 May 2025, Mr Albarran and others in their capacity as joint and several administrators of Markenzo Pty Ltd (admins apptd) ("Markenzo") and Thorley Sand and Gravel Pty Ltd (admins apptd) ("Thorley") (together, "Companies") apply, under s 447A of the Corporations Act 2001 (Cth) for, in effect, an extension of the time in which a second meeting of creditors can be adjourned, from the 45 business day period specified in r 75.140 of the Insolvency Practice Rules (Corporations) 2016 (Cth) ("Insolvency Practice Rules"), to permit that meeting to be held no later than 18 August 2025, about three months in the future. The application reflects commercial issues that commonly arise in applications to extend the convening period for a voluntary administration under s 447A of the Act. However, Mr Tao, who appears for the voluntary administrators, rightly points out that it is no longer possible to extend the convening period here, so that this application is properly brought in this manner.
Affidavit evidence
2. I will first address the evidence before turning to the applicable principles. The administrators read the affidavit dated 6 May 2025 of Ms Vouris, who is one of the administrators, who refers to the circumstances of their appointment and to the financial position of the State Road Group, of which the Companies form part. The State Road Group operated a civil contractor business providing earth moving equipment and heavy vehicle and machinery hire for large-scale projects in New South Wales and Queensland, typically in the nature of infrastructure projects in respect of road developments. Several companies within the State Road Group have now passed from voluntary administration to liquidation.
3. The Companies are each asset holding companies. Markenzo holds a quarry situated in Mount View in New South Wales and Thorley holds an EPA licence which permits the extraction of particular resources at the quarry. Ms Vouris notes that, since the voluntary administrators' appointment, they have attended to the matters necessary to ensure compliance with the EPA licence for the quarry, recognising that that licence is capable of being transferred to a third party, at least so long as the Companies do not pass into liquidation. Ms Vouris also addresses the position as to the Companies' creditors. Secured creditors in respect of the Companies have not, to date, appointed receivers and managers, and appear to be content to permit the Companies' assets to be realised in the voluntary administration. The Companies' unsecured debts are owed to related entities within the State Road Group.
4. Ms Vouris also refers to the matters which support the application, including that the sale of business process for the assets of the Companies is ongoing. The administrators having advertised the business or the assets for sale by a confidential information memorandum, and are working towards completion of the sale process toward the end of May 2025. Ms Vouris expresses the view that the extension of the adjournment period for the second meeting of creditors, beyond the 45 day period which would otherwise be available under the Insolvency Practice Rules, would lead to a better outcome for creditors generally. She also notes her view that, notwithstanding the current timetable for the sale process, the nature of the Companies' assets is such that any sale may require a longer period for due diligence by the purchasers and completion.
5. It is plain enough, and Ms Vouris' affidavit indicates, that a sale of the Companies' assets, so as to maximise the return to creditors or at least secured creditors, will be more readily achieved within the voluntary administration that in a liquidation, and there appears to be a risk that the EPA licence would no longer be transferable in a liquidation and its value would thereby be reduced or lost. Ms Vouris also expresses the view that there would be no prejudice to creditors from the extension of the adjournment period which is sought, where the Companies have no employees and creditors generally, or at least those who would share in a distribution of surplus, will benefit from maximising the sale proceeds of the Companies' assets. Ms Vouris also indicates, sensibly enough, that the administrators would reconvene and hold the second meeting of creditors as soon as practicable, if the sale of the business and assets of the Companies ultimately completes earlier.
*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/196f500a423e370e00aa8dce)
Disclaimer: Curated by HT Syndication.
