Probuild’s administrators get their Halo on
Algeri, in the matter of WBHO Australia Pty Ltd (Administrators Appointed) [2022] FCA 169 (2 March 2022)
Beach J made several orders in favour of the administrators.
This is another administration using the Halo platform, which Beach J described as “an efficient an effective means of managing a large scale administration involving multiple companies and creditors”.
On 23 February 2022, administrators were appointed to 18 companies in the Probuild group.
The Probuild group has approximately 19 major construction and development projects underway in Australia.
The administrators are continuing to trade on those businesses and remain in possession of at least seven properties that are the subject of leases, as they continue their investigations.
Deferring personal liability
Noting that:
s 443A(1)(c) of the Corporations Act imposes personal liability on administrators for debts incurred in the exercise of the administrator’s functions in respect of property leased, used or occupied;
s 443B(2) imposes personal liability on administrators for rent and other amounts payable under lease agreements commencing prior to the administration if the company continues to use, occupy or possess the property as lessee during the administration; and
this personal liability commences five days after the administration commences unless, within that period, the administrator gives notice to the owner or lessor under s 443B(3), stating that the company does not propose to exercise rights in relation to the property,
the administrators, wanted to defer the time that their personal liability commences, to have more time to decide whether it is best to retain, or give up possession of leased property.
To give effect to the extension that they sought, the administrators applied under s 447A (the general power to modify the provisions of 5.3A of the Act), and more specifically, s 443B(8), to modify the operation of s 443A(1)(c) and s 443B(2).
Beach J accepted that it was appropriate, and in the interest of creditors, to allow such extension, for the 21-day period sought by the administrators (until 24 March 2022).
Electronic proxy forms
His Honour also agreed to make orders under s 90-15 of the Insolvency Practice Schedule, that the requirements of s 75-25 of the lnsolvency Practice Rules (which requires the provision of a proxy form with a notice of meeting) would be satisfied by providing creditors with a link to the Halo platform on which electronic proxy forms would be available.
Extending time for notice of first meeting
Given the emergence of a significant number of creditors, his Honour also agreed to make an order under s 447A(1) to extend the time for giving of the notice of the first meeting of creditors outside the time relevantly allowed by s 436E(3).
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