It might be about time Deloitte’s Grant Sparks and Richard Hughes took heed of the old warning about digging holes you can’t climb out of.
“On any view, the difficulties with the administrations of the IG Power companies arise as a result of the general purpose administrators’ initial failure to perform their statutory duties over a period of some ten months.”Justice Roger Derrington.
Last week iNO reported on how their most recent attempts to obtain approval for almost $1.5 million in fees from IG Power group creditors foundered.
This week it’s a court that’s foiled their endeavours by dismissing an application for an order that Sev.en Gamma AS, their opponent in the IG Power litigation, provide an undertaking as to damages after it obtained court approval to have several urgent hearings deferred.
Sparks and Hughes, who are the joint and several administrators of IG Energy Holdings (Australia) Pty Ltd and IG Power Holdings Limited and IG Power (Callide) Pty Ltd are fighting an effort by the major shareholder and creditor which wants them removed.
While the removal hearing is scheduled to take place shortly Sev.en Gamma has already succeeded in having John Park and Ben Campbell from FTI Consulting appointed as special purpose administrators (SPAs) of the IG Power Group to conduct an investigation into the circumstances around the cause of two catastrophic failures of equipment at the Callide Power Station in May 2021.
The judgment that accompanied the court approving the SPAs’ appointments was scathing of Sparks and Hughes in respect of their failure to adequately investigate the Group’s affairs.
But Sparks and Hughes have countered by arguing that the delay sought by Sev.en Gamma prejudices creditors because funds for a DoCA being proposed are being utilised to rebuild the damaged power generation equipment and the deed proponent is not prepared to make up a shortfall caused by delay consuming more of the sum it’s already pledged.
In Sparks, in the matter of IG Energy Holdings (Australia) Pty Ltd (Administrators Appointed) (No 2) [2024] FCA 648, Federal Court judge Roger Derrington dismissed the Deloitte duo’s application because Sparks and Hughes, as general purpose liquidators (GPLs), bear primary responsibility for the delays.
“On any view, the difficulties with the administrations of the IG Power companies arise as a result of the general purpose administrators’ initial failure to perform their statutory duties over a period of some ten months,” the judge said.
“Though it is difficult to speculate, had they done so it is quite possible that the administrations would have been completed by now.
“Though the application of the general purpose administrators to require Sev.en to provide an undertaking as to damages initially appeared to be attractive, on deeper consideration it should be refused,” the judge concluded.
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