VAs grappling with record creditor count

When a barrister tells a judge that accommodating every creditor at a first meeting would require a venue of stadium proportions, you know records are at risk.

The recent placement of Bonza Aviation Pty Ltd into voluntary administration (VA) looks set to break a few.

“Mr Albarran’s estimate of upwards of 20,000 doesn’t seem disproportionate.” James Hutton SC.

Most obvious is the creditor count. In an application brought yesterday in the Federal Court barrister James Hutton SC for the VAs said his clients had identified approximately 60,000 creditors of the budget carrier, around 57,000 of whom qualify by having booked a flight and paid a deposit.

Impressively, the staff of VAs Richard Albarran, Kathleen Vouris, Cameron Shaw and Brent Kijurina have managed to send 60,000-odd emails since the VAs’ April 30 appointment and determined as at close of business on Monday that 41,000 had been opened.

Referring to the affidavit Albarran filed in support of the orders sought ahead of Friday’s meeting, Hutton hinted at the kind of numbers Hall Chadwick’s staff would need to deal with.

“Mr Albarran’s estimate of upwards of 20,000 doesn’t seem disproportionate,” Hutton said, adding that it was possible even more would seek to attend.

The VAs were seeking a range of orders that would allow them to dispense with various rules and regulations pertaining to giving notice to creditors, dealing with proxies and conducting meetings in circumstances where the weight of creditors likely to participate would make compliance impossible.

This was particularly the case in respect of allowing creditors time to ask the VAs questions.

There was discussion about technological limitations. Justice Elizabeth Cheeseman referred to the administration of Virgin Airlines and how the VAs from Deloitte were able to utilise that firm’s proprietary Halo software to conduct virtual meetings with a similarly large base of creditors.

Unlike Bonza however, Virgin was still trading so at the first meeting there were no customer creditors.

The judge said that according to her former colleague Justice John Middleton Teams Software was capable to coping with up to 100,000 registrants to a virtual meeting.

She told Hutton she wanted the VAs to communicate to creditors who are not familiar with Teams that it was important they establish their registration and connection in plenty of time if the meeting is to commence at 11:00am as planned.

But facilitating participation didn’t solve the VAs’ problem. How could they afford a reasonable time for creditors to ask questions and to provide answers if 60,000 attend?

The VAs wanted questions to be provided in advance and that’s what they got with the judge making orders that allow the VAs to ignore any questions not provided to them by 11:59pm tonight.

Further, her honour made an order that allows the VAs to limit the question and answer segment to no more than two hours, a reasonable allocation given the numbers and the likelihood of the same question being asked more than once, or twice, or thrice ….