A beauty parade is on the cards after solvency-challenged steel bro Sanjeev Gupta placed Liberty Primary Metals Australia (LPMA) into administration one day before an application to have the company wound up was due to be heard.
“It was our view that the creditors of the Company should decide the future of the Company. This was not a view shared by the OSM Administrators.” Michael Brereton, Sean Wengel, Rashnyl Prassad, William Buck.
Control of LPMA, which at one time was the primary holding company for the Australian assets Gupta held through his global parent GFG Alliance, passed to Michael Brereton, Sean Wengel and Rashnyl Prasad as administrators on Monday following a referral from Olvera Advisors.
iNO readers will know the William Buck trio have been actively complying with their duties and exchanging unpleasantries in their capacity as the administrators of related entity Whyalla Ports Pty Ltd (WPPL) with the administrators of sibling entity OneSteel Manufacturing (OSM)
Although conjoined courtesy of a deed of cross guarantee, OSM’s appointees from Labor saver KordaMentha are mainlining a lake of non-recourse funding while Brereton, Wengel and Prassad struggle to rub two bob together.
As well as successfully litigating to terminate a lease which would have kept some of the Whyalla Port assets in WPPL, KordaMentha’s Lara Wiggins, as lead on the OSM job has also encouraged OSM creditors to prove in the WPPL administration with a view to quashing a proposed deed of company arrangement (DoCA), unsuccessfully as it turned out.
According to the Minutes of WPPL’s October 14 meeting the DoCA was a joint proposal from Liberty OneSteel (Primary) UK Ltd and Queensland-based contractor Golding, which has allowed Gupta to run up a debt to it of more than $100 million and is now partnering with him in a DoCA.
Despite KordaMentha’s distaste for liquidation-avoidance, WPPL creditors voted in favour of the DoCA and Golding’s focus has shifted to LPMA, which doesn’t trade but does hold all shares in Tahmoor Coal Pty Ltd.
On Tuesday lawyers for Golding appeared at the Federal Court’s West Australian division for what had been scheduled as the hearing date of a winding up application on foot since September 24.
Barrister Jack Hynes, appearing for Brereton, Wengel and Prassad, gave the court an undertaking that his clients wouldn’t hold a second meeting of LPMA creditors before the December 1 deadline.
Hynes also flagged an interlocutory application, which will no doubt include an adjournment of Golding’s winding up application.
Unsurprisingly, Brereton, Wengel and Prassad, who’ve engaged Masi Zaki from Bird & Bird to represent them, indicated their willingness to be appointed as liquidators in the event LPMA is wound up but Golding’s counsel Long Pham from Quayside Chambers in Perth indicated his client would oppose any order appointing the William Buck trio.
While Golding’s lawyer Sam Dundas from Kings & Wood Mallesons (KWM) refused to disclose the identity of who’d provided a consent, the presence of a supporting creditor on Tuesday raises the possibility of a three way contest.
The court heard from Kerrs’ Richard Shen on behalf of NTT DATA Business Solutions Australia Pty Ltd, the local arm of global IT provider NTT DATA, which is chasing in excess of $7 million from LPMA.
He said his client wanted LPMA wound up, wanted to substitute itself for Golding as petitioning creditor and wanted Vincent’s Henry McKenna appointed liquidator.
If Federal Court national judicial registrar Camille Goucke decrees that LPMA be wound up she’ll then have to choose which of the three gets the gig.
Given NTT Data first filed it application in the West Australian registry for winding up in February but couldn’t get a hearing until Golding filed in September we figure any sandgroper who throws his or her hat in the ring will be preferred.
The parties return to court on November 26.
Further reading:
Whyalla: experts’ evidence culled but VA’s fees flowing
Fixture or chattel – KordaMentha appointees prevail
OneSteel VAs fail in contingent claim bid
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