Stiff competition as ACFS consenters queue

Sule Arnautovic, Jessica Perri and Anthony Elkerton have won a critical reprieve this morning with orders made by consent in the Federal Court adjourning the hearing of an application to wind up the Tazaneros family’s ACFS Port Logistics Pty Limited (ACFS).

As well as postponing potential liquidation of Australia’s largest privately owned container handler, the orders provide for an extension to the convening period for the second meeting of ACFS creditors to at least October 15, though if information provided to the court from the Group’s receivers is accurate, the administrators will likely be forced to seek a further extension.

Arnautovic, Perri and Elkerton were appointed as administrators on August 6 by secured creditor Scottish Pacific Business Finance (ScotPac), which was clearly happy to entrust its $45 million of debt to Arnautovic’s Salea Advisory, despite it being a relative minnow in the insolvency pond.

Maybe this was because ScotPac had also appointed Andrew Sallway and Duncan Clubb as receivers, and it’s the BDO duo who are in charge and want the Group kept out of liquidation while they attempt to stabilise its trading units ahead of a sale or recapitalisation.

The application to have ACFS wound up was brought by the Deputy Commissioner of Taxation (DCoT) and is backed by a cohort of supporting creditors seemingly intent on appointing liquidators to investigate the Group’s affairs and the conduct of its directors.

Behind those creditors stand numerous insolvency practitioners who’ve consented to act in the event the best efforts of the administrators’ counsel Anthony Cheshire SC and Rod Turnbull are insufficient to keep ACFS and two related entities out of liquidation.

According to the Federal Court file creditors have obtained four consents from insolvency practitioners eager to relieve an SME like Salea Advisory of the burden of an external administration that Salea founder Arnautovic has already admitted poses challenges.

Addressing creditors at the first meeting this week Arnautovic explained that the administrators would apply to extend the convening period because “the usual twenty (20) business days would not be enough time to sufficiently investigate the Companies’ affairs due to the complexity and size of the business operation of the Companies”.

Size is right. The company has 1100 employees and 25 sites nationally.

Cheshire also told the court that the receivers estimate that given the complexity and size of the business, a sale process could take six months.

The tax office however has plenty to swing in any vote, given it’s the largest unsecured creditor with an admitted proof of debt for $76 million.

Also supporting a winding up was fund management group Evolution MIT Services Pty Ltd which somehow managed to be owed $17 million.

Its counsel Ben Koch told the court his client was happy to accede to the orders standing over the matter so a judge could hear the the adjournment and convening period applications and the winding up application if an adjournment was refused but he asked that the administrators provide an undertaking that they not, when a meeting is next held, use their power to unilaterally adjourn for a further 45 days.

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