Federal Court judge Brigitte Markovic has dashed the hopes of the receivers of foreign currency exchange Navigate Global Payments (NGP) by siding with a contingent creditor on the question of whether the company should be wound up or returned to administration.
Her honour’s rulings – to be found in Shiny (Trustee), in the matter of Navigate Global Payments Pty Ltd (Receivers and Managers Appointed) [2023] FCA 1089 – came about after Shiny Pty Ltd applied for orders terminating a deed of company arrangement (DoCA) endorsed by a majority of NGP creditors at a meeting on August 4, 2023.
The meeting was presided over by Vincents’ Nick Combs who’d been appointed voluntary administrator (VA) on June 30 and who had recommended creditors vote in favour of the DoCA in his report of July 27.
Minutes of the meeting record significant concerns about the proposed DoCA expressed by the Deputy Commissioner of Taxation’s Michael Mosely, who commented that the number of contingent creditors and the size of their potential claims meant that unsecured creditors couldn’t have confidence about how much of the $125,000 deed fund would ultimately be left for them.
Mosely was also concerned that the DoCA extinguished any rights to potential claims against NGP directors Tim Connors and Wade Dilks.
Combis told Mosely that resolving the claims of contingent creditors like Shiny – which he pointed out is also a debtor – would likely to take years and that asset realisations and the investigations required to achieve them would be undertaken by the receivers – KPMG’s Ryan Eagle, David Hardy and Emily Seeckts.
Also querying the appropriateness of a vote at that time was Ashurst partner Bernie Walrut attending on behalf of Shiny.
He suggested that Combis adjourn the meeting but the VA was adamant that he’d be in no better position in respect of the contingent claims in three months time.
The vote proceeded and unfortunately for the DCoT its proof of debt wasn’t supplied to Combis prior to the commencement of the meeting so it was admitted to vote for $1.00 only.
Shiny likewise had been admitted to vote for $1.00 but whatever evidence it brought in its termination application was more than enough to persuade the court that the application should be heard.
Combis opposed it and Eagle, Hardy and Seeckts were also galvanised into action, seeking to be heard as interested persons and, in the event that the company be wound up, making their own application for the appointment of administrators so a new DoCA proposal could be put to creditors.
On the day of the hearing the court was advised that Combis was withdrawing from the contest and in the event the judge terminated the DoCA would not seek to be appointed as either liquidator or administrator.
The KPMG trio obtained consents from HLB Mann Judd Matthew Hocking and Todd Gamble. Shiny meanwhile nominated John Sheahan and his son Oliver from Sheahan Lock.
Despite the receiver’s counsel Karen Petch telling the court the HLB HLB pair “may be more neutral” she had no evidence to indicate why the father and son team from Sheahan Lock would be less so and her honour opted to appoint the plaintiff’s nominees as liquidators.
Yet to be resolved is Shiny’s application for orders denying Combis his remuneration and given the receivers’ and their appointor’s determination to see a deed done iNO suspects this one has more to run.
No doubt the newly-installed liquidators will look closely at the security documentation pursuant to which the receivers were appointed.
Be the first to comment on "VA falls on sword as judge rejects receivers’ deed plea"