Jeff Marsden.
Novel was the word on Monday when parties warring over the fate of clothing retailer Ally Fashion came before the Corporations List judge of the NSW Supreme Court.
Ally was ordered to be wound up on February 28 following an application in the Federal Court brought by a landlord acting on an unsatisfied creditor’s statutory demand.
“We regard this application as being at the extreme end of the novelty spectrum”. John Anderson, Eight Selborne Chambers.
BDO’s Duncan Clubb and Jeff Marsden were appointed as liquidators and after shutting 51 stores nationally issued a torrent of onerous property disclaimers in respect of the store leases.
But for reasons that none of the warring parties were inclined to make clear to iNO, liquidation doesn’t suit Ally’s director and sole shareholder David Dai, who the court heard had issued Chubb and Marsden with a meeting requisition notice.
Apparently Dai wants to put up a DoCA and doesn’t want the BDO pair to be appointed as deed administrators, assuming creditors will want a bar of whatever offer Dai’s proposing to pitch.
But Dai’s counsel Evan Walker told judge Ashley Black that his client wants the court to appoint the voluntary administrators, prompting the judge to observe that such a proposition was “novel” given under the Corporations Act it’s either a company’s directors or a secured creditor that has the power to put a company into administration.
Nor was his honour the only one to question the orthodoxy of the proposed application, with parties opposing the application retaining Dentons to instruct barrister John Anderson to appear.
Confirming he and his instructors would be ready for a hearing on Friday, Anderson told Justice Black: “We regard this application as being at the extreme end of the novelty spectrum”. That word again.
In making directions his honour told Walker that while he had formed no concluded view “There are good novelties and bad novelties and it is yet to be revealed which this is”.
Walker’s instructor meanwhile is Piper Alderman’s Thomas Russell, who’s obtained a consent from Hall Chadwick parter Richard Albarran to replace Marsden and Clubb. Nothing novel to see there.
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There is, of course, a third party who can appoint a voluntary administrator and that is the liquidator. I would have thought that the “normal” application framed as you have described it would be more than that as there is no power conferred upon a Court to appoint “voluntary administrators” under Part 5.3A. It may be of course that what was intended was a review of the decision of the liquidators not to seek to have the company passed into liquidation for the purpose of considering a Deed of Company Arrangement – which is perfectly proper and normal. Thereafter once the Deed of Company Arrangement has been satisfied in accordance with its terms – assuming that the creditors agree to it, an application can be made for termination of the winding up.