ProvLiqs appointed VAs but denied scope to tender

Hall Chadwick’s Richard Albarran and Richard Lawrence have had to settle for a more than usually restrained role as administrators after Victorian Supreme Court Judge Jim Delany restrained them from conducting any tender or sale process of the assets of Bluechain Pty Ltd.

Albarran and Lawrence were appointed provisional liquidators of the company in February following an ex-parte application by a shareholder.

“There is no practical reason why, upon their appointment as administrators, Mr Lawrence and Mr Albarran should also continue in their current role as provisional liquidators.” Justice Jim Delany.

While opponents of their appointment had unsuccessfully sought to impugn their independence, in Re Bluechain Pty Ltd [2021] VSC 187 his honour agreed that given their appointment as administrators was to assess a deed proposal being prepared by Bluechain’s parent, “there would seem to be no real need or benefit to creditors from the expenditure of otherwise limited funds on a sale or tender process. Such work and the expenditure required would be unnecessary”.

Similarly and unsurprisingly given the $500,000 in fees they’ve already generated, Albarran and Lawrence also opposed the termination of their appointments as provisional liquidators.

Their counsel Hugh Somerville argued that “the provisional liquidators should remain in place until after the date of circulation of the Administrators’ Report pursuant to s 439A of the Act,” referring to issues relating to corporate governance upon which the provisional liquidators have reported and as to “$654,960.84 processed from the bank account of the Company on the same day as the appointment of the provisional liquidators”.

Persuasive as it sounds, it wasn’t enough to sway his honour, who was told by Michael Galvin QC for the parent company “that the continued presence of the provisional liquidators would, on his instructions, hamper the raising of funds for the proposed DOCA”.

While Galvin provided no evidence in support of that submission it would appear that the judge did not need any, concluding that the requirements of the Act would be served without the Hall Chadwick pair clinging to the Bluechain carcass via multiple mandibles.

“There is no practical reason why, upon their appointment as administrators, Mr Lawrence and Mr Albarran should also continue in their current role as provisional liquidators,” his honour said.

“There are no circumstances that would warrant the continued presence of Mr Albarran and Mr Lawrence in their current role as provisional liquidators.

“If they should be removed as administrators and replaced by other persons, as was raised as a possibility by Mr Galvin, that would not provide a reason for a fresh appointment of provisional liquidators.

“That possibility, to be strongly discouraged on the grounds of cost and the clear familiarity of the existing incumbents, does not support the termination of the provisional liquidation being delayed.

“Any replacement administrators would be subject to the same duties and responsibilities under Part 5.3A of the Act as Mr Albarran and Mr Lawrence.” Support INO’s continued chronicling of the insolvency sector.