Strong Room VAs and deed proponent clash

The administration of artificial intelligence aspirant Strong Room Technology Pty Ltd (SRT) began in colour and controversy and recent events suggest the voluntary administrators (VAs) have yet to apply a satisfying veneer.

Creditors were due to vote yesterday with VAs Todd Gammel, Barry Taylor and Matthew Levesque-Hocking having recommended in their 439A Report that the company be wound up and that they be appointed liquidators.

But the meeting was adjourned and the reason why involves proceedings the HLB Mann Judd trio commenced in the Federal Court last Friday.

iNO’s mail is that the VAs are seeking court approval for an asset sale, a possibility they flagged in their 439A Report could occur prior to the May 13 second meeting.

They also said that a deed proposal they’d received, while having some commercial merit, was not in a form they could recommend.

At the court hearing yesterday, the deed proponent – InterValley Ventures (InterValley), a creditor and venture capital investment fund – was given leave to intervene, forcing the court to stand over the proceedings for a week.

Our mail is that InterValley disputes the VAs’ assessment of its DoCA proposal and has intervened to try and get it put to a creditor vote.

This was all the VAs needed.

From the commencement of the administration on April 28 SRT been subject to freezing orders obtained by EVP Opportunities Master Pty Ltd as trustee for the EVP Opportunities Master Fund (EVP).

At the same time the VAs were appointed by SRT’s directors EVP was appointing Martin Walsh as receiver of the SRT group’s primary bank account.

That reality forced the VAs enter into a funding agreement with EVP to keep the business afloat while they seek a buyer.

Another curious aspect of this EXAD is that if a DoCA was entered into Gammel, Taylor and Levesque-Hocking would propose to conduct public examinations, subject to funding, to investigate the conduct of directors and potential breaches of directors duties.

It’s an odd DoCA indeed that doesn’t require creditors to relinquish claims against directors.

Further reading:

Question mark over Strong Room “jewel in the crown”