OneSteel VAs fail in contingent claim bid

After failing to derail a convening period extension application on the basis of unpardonable delay, Arnold Bloch Liebler restructuring guru Leon Zwier admitted his efforts were in fact motivated by the inconvenience the application had caused his clients.

Such are the lengths to which KordaMentha’s fixer-in-chief will go to advance the interests of those who retain him in insolvency matters, and Whyalla Ports Pty Ltd is no ordinary administration.

“Mr Zwier ultimately conceded that his real complaint was “one concerning the time which we had to deal with the application as opposed to delay, per se, in relation to the making of the application”. Justice David O’Callaghan.

William Buck’s Michael Brereton, Sean Wengel and Rashnyl Prasad were appointed administrators of the Sanjeev Gupta-controlled entity on June 6, 2025, heading off a winding up application brought in the Federal Court by West Perth law firm Grondal Bruining on behalf of secured creditor Qube Bulk Pty Ltd, subsidiary of ASX-listed import and export logistics provider Qube Holdings Limited.

They gave notice to creditors of their intention to apply to extend the convening period for three months on June 30 and the matter was heard on July 4.

According to the Minutes of the first meeting of creditors the company hadn’t traded since March 27 when the lease between it and OneSteel Manufacturing Pty Ltd (Administrators Appointed) was purportedly terminated and the Company was allegedly dispossessed of all its plant and equipment at that time and its right to provide services to its customers.

That alleged dispossession was driven by Zwier’s clients Sebastian Hams, Mark Mentha, Lara Wiggins and Michael Korda in their capacities as administrators of Onesteel Manufacturing Pty Limited (OneSteel).

The KordaMentha foursome were desperate to clarify that ownership of the Port resides with OneSteel because they’ll have no hope of flogging the steel maker to a new buyer if the Port operations aren’t included.

Following amendments made to the Whyalla Steelworks Act 1958 the OneSteel administrators got their way but that hasn’t stopped Whyalla Ports from pursuing a cross claim against OneSteel that’s due to be heard in the Federal Court next month.

The KordaMentha appointees meanwhile have also been pushing to get Whyalla Ports into liquidation in the belief that OneSteel is a creditor in the sum of $1.3 billion, though their reliance on a Deed of Cross Guarantee (DOCG) binding the corporate entities within the Gupta Family Group Alliance (GFG Alliance) appears to have been misplaced.

Gupta meanwhile has indicated to Brereton, Wengel and Prasad that he intends to propose a DoCA, having taken restructuring advice from Olvera Advisors, the VAs’ referrer.

When the Whyalla Ports VAs gave notice to creditors of their intention to apply to extend the convening period for the second meeting by three months the OneSteel VAs, believing they were contingent creditors, dispatched Zwier to throw spanners.

But as the decision in Brereton (Administrator), in the matter of Whyalla Ports Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2025] FCA 774 the delay and other arguments Zwier brought to back his clients’ opposition to an extension didn’t cut it, which is no surprise when the judge reckons you’re not a creditor.

“In my view, the Administrators did not delay in bringing the extension application and provided sufficient notice of the application to the relevant parties,” Federal Court judge David O’Callaghan said.

“Mr Zwier ultimately conceded that his real complaint was “one concerning the time which we had to deal with the application as opposed to delay, per se, in relation to the making of the application.

“Secondly, the Proof of Debt (which formed one basis of OneSteel’s claim to be a creditor of the Company) was only brought to Mr (Jack) Hynes’ attention, and to the attention of the solicitors for the Administrators, less than one hour before the hearing.

“Thirdly, the Deed of Cross Guarantee (DOCG) (which formed the other basis of OneSteel’s claim to be a creditor of the Company (Whyalla Ports Pty Ltd) is triggered upon the winding up of a company within the GFG Alliance (see cl 3.2) and operates to make external (i.e. non-GFG Alliance group) creditors of that company become creditors of the other GFG Alliance group entities (see cl 3.1).

“Therefore, as Mr (Chris) Hibbard submitted, the DOCG would not operate to make OneSteel a creditor of the Company in the event of the Company’s liquidation.

“It follows that OneSteel is not a “contingent” creditor of the Company under s 553(1) of the Act, and was therefore not entitled to prior notice”, his honour concluded.

iNO asked Zwier and the OneSteel administrators if they would challenge the interpretation of the DOCG disclosed in the O’Callaghan judgment, which was delivered on July 4 but withheld from publication until Wednesday this week.

No response was forthcoming by our publication deadline.

In the meantime the cross claim is being prosecuted by Rob Kirman and Rob Brauer of McGrathNicol who were appointed Receivers and Managers of Whyalla Ports Pty Ltd by secured creditor Goulding Contractors on June 11.