By Anthony Lo Surdo SC and Theresa Power -
Key decisions
- Habrok (Dalgaranga) Pty Ltd v Gascoyne Resources Ltd [2020] FCA
- Australian Competition and Consumer Commission v Woolworths Group Limited (formerly called Woolworths Limited) [2020] FCAFC 162
- Flightdeck Geelong Pty Ltd v All Options Pty Ltd [2020] FCAFC 138
- Australian Building and Construction Commissioner v O’Halloran [2020] FCA 1291
- ASIC v Mining Projects [2007] FCA 1620
CORPORATIONS
Insolvency – voluntary administration – deed of company arrangement – standing to bring application under ss 445D and 447A of Corporations Act 2001 (Cth) – whether administrators had a conflict of interest
In Habrok (Dalgaranga) Pty Ltd v Gascoyne Resources Ltd [2020] FCA 1395 (29 September 2020), the plaintiff (‘Habrok’) sought orders under ss 445D and 447A of the Corporations Act 2001 (Cth) (‘Act) terminating a deed of company arrangement (‘DOCA’) executed by the first to seventh defendants (‘the GCY Group’) and the eighth defendant (‘the Administrators / FTI’).
Background
After the investigation of options available to the GCY Group, the Administrators recommended to the creditors of the GCY Group that a DOCA should be entered into involving a recapitalisation. A rival DOCA was proposed by Habrok Mining Pty Ltd, the holding company of Habrok, at the second meeting of creditors. The creditors voted to cause the companies in the CGY Group to execute the DOCA put forward by the Administrators, which was then executed. Habrok was not at that time a creditor of any entity in the GCY Group but took an assignment of a claim by a creditor of one of the companies in the GCY Group on the day that the proceedings were commenced.
Habrok’s principal complaint against the Administrators is that having assisted the GCY Group to formulate a turnaround plan in late 2018 when FTI were consultants to GCY, the Administrators pursued their plan for the DOCA with single-minded determination during the administration, and in the process disregarded material conflicts of interest.
