John Park.
Ben Campbell.
An insistence on the need for urgency has been exposed as balderdash by a Federal Court judge who’s lamented how the administrators of the Callide energy generation group could have been so poorly advised by some of the finest lawyers in the land.
“The submissions made on behalf of the administrators and CEPL appeared to conflict in several significant respects and resulted in the unfortunate consequence that the administrators’ submission, based upon a sworn assertion that expedition was required due to the threat of termination, was severely undermined.” Justice Roger Derrington.
The seemingly sorry state of advice being provided to FTI Consulting’s John Park and Ben Campbell was made public in a recent judgment of Justice Roger Derrington, who had been asked by the FTI pair to approve orders extending the convening period for the second meeting of creditors of the Callide energy group.
iNO readers will be aware that the administration of IG Energy Holdings (Australia) (IGEH), IG Power Holdings (IGPH), IG Power Marketing (IGPM) and IG Power (Callide) (IGPC) (Callide Group) has been a hellishly complex undertaking, one beset with risk and contaminated by base political interest.
Certainly those challenges put paid to the original appointees who voluntarily handed in their Geiger counters in June after a lengthy campaign to oust them, commenced in December 2023 by IGPC shareholder Sev.En Gamma.
So traumatised were Deloitte duo Richard Hughes and Grant Sparks that they agreed to pay the costs their opponents incurred in having them removed on an indemnity basis and without recourse. One might suspect it was a case of good riddance and cheap at the price.
As is revealed in Park, in the matter of IG Power (Callide) Ltd (Administrators Appointed) (No 3) [2024] FCA 1245 their replacements are finding the going just as heavy.
The judgment records Park and Campbell as making progress in investigating where potential claims might lie and reveals that they’re also close to concluding negotiations to sell shares in various holding companies and in IGPC, which is the joint venture partner with the Queensland Government-controlled Callide Energy Pty Ltd (CEPL) in the Callide power generation plant at Biloela in south east Queensland which exploded in 2023.
CEPL is also the proposed purchaser of the interest in IGPC and this is where Park and Campbell have seemingly stumbled.
According to their submissions – supported by an affidavit Park affirmed on October 29 – the deal with CEPL is dependant on the satisfaction of certain conditions precedent, one of which must be satisfied by a date not specified but clearly soon given the administrators initially sought that the convening period be extended only till December 6. From the administrators’ perspective there was not a moment to be lost.
But Park and Campbell have also sought judicial directions in respect of elements of the planned sale and while one such application has been heard with judgment reserved, the other is not so advanced.
Given that the second application for judicial direction had not been heard, some might think urging his honour to order that the second meeting be convened no later than December 6 risked burdening the court. The judge was among them.
“During the hearing, some emphasis was placed on the imperative for an expedited hearing due to the risk to the Sale Agreement between CEPL and IGPC,” the judge said.
“It was indicated that the completion of that Agreement was at risk if certain conditions precedent were not completed within certain dates.
“As mentioned, one of those conditions concerns the hearing of the second judicial direction application and a decision being made in respect of it by a particular date. It is not necessary to identify what that date is, though it might be assumed that it would be some date prior to 20 December 2024, being the latest date to which the administrators considered it was appropriate to extend the convening period.
“In the course of the hearing, in an attempt to clarify some matters raised on behalf of Sev.en Global, counsel for CEPL submitted that there was no evidence that CEPL would seek to terminate the Sale Agreement if the dates for completion of the conditions precedent passed without satisfaction.
“By the end of the second hearing, there was significant uncertainty as to the extent to which the Sale Agreement would or could be imperilled by the non-satisfaction of a condition precedent by the stipulated date.
“The submissions made on behalf of the administrators and CEPL appeared to conflict in several significant respects and resulted in the unfortunate consequence that the administrators’ submission, based upon a sworn assertion that expedition was required due to the threat of termination, was severely undermined.
“It also lent support to the submission of Sev.en Global that the administrators and CEPL were seeking to pressure the Court into providing an early hearing.”
His honour was perplexed. How could experienced administrators advised by White & Case and the aspiring purchaser by Clayton Utz not be on the same page about the level of urgency?
“CEPL and the administrators are unquestionably represented by some of Australia’s leading lawyers,” he said.
“That being so, it is difficult to imagine that they were not adequately advised that if they were to agree to a condition precedent providing a date by which a judicial determination had to be made, it would generate pressure on the Court to determine the application as a matter of urgency.
“If that assumption is correct, it would be most concerning that the administrators chose to enter into the Sale Agreement in the form in which it now appears.
“There is, however, insufficient material to reach any conclusion on that issue. It may well be that no attention was paid by anyone to the effect of choosing a short time period by which the second judicial direction application was to be heard and determined.
“However, regardless of whether the circumstances now arising were the intended or unintended outcome of the administrators’ entry into the Sale Agreement, it is a problem of their making.”
His honour made orders extending the convening period to February 28, 2025 and yesterday made additional orders allowing for the administrators and CEPL to come back to court on November 13 to make further submissions if they request it and Justice Derrington thinks it will assist.
Further reading:
Callide VAs sweating on directions as deadline nears
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