In the matter of Media Options Group Pty Ltd [2013] NSWSC 1746

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Media Options Group Pty Ltd [2013] NSWSC 1746 Hearing dates: 28 October 2013 Decision date: 28 October 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Proceedings adjourned to Monday 11 November 2013 at 10am in the Corporations Judge directions list for further directions. Catchwords: CORPORATIONS - Winding up - Application for adjournment of winding up pursuant to (Cth) Corporations Act 2001 s 440A(2) on basis that it is in the interests of the company's creditors for the company to continue under administration rather than be wound up - satisfied in interests of company's creditors for company to continue under administration. Legislation Cited: (Cth) Corporations Act 2001 s 440A(2) Cases Cited: In the matter of Reed Constructions Australia Pty Ltd [2012] NSWSC 1045 Category: Interlocutory applications Parties: Chief Commissioner of State Revenue (plaintiff) Media Options Group Pty Ltd ACN 103 262 380 (defendant) Representation: Counsel: J Singh (solicitor) (plaintiff) J Rose (defendant) Solicitors: Champion Legal (plaintiff) Marsdens Law Group (defendant) File Number(s): 2013/ 263370

Judgment - EX TEMPORE 1HIS HONOUR: Before the Court is the plaintiff's originating process claiming an order that the defendant be wound up in insolvency and that a liquidator be appointed. The defendant by its administrators seeks an adjournment pursuant to s 440A(2) of the (Cth) Corporations Act 2001 on the basis that it is in the interests of the company's creditors for the company to continue under administration rather than be wound up. 2The evidence establishes that the creditors meeting to consider a resolution that the company enter into a Deed of Company Arrangement is to be held this Friday, 1 November 2013. There is a real, tangible and detailed proposal for a Deed of Company Arrangement ("DOCA") which more than arguably offers the potential for a better result for creditors than a liquidation. It may be, as Mr Singh for the plaintiff submits, that if certain voidable transactions are recoverable and if insolvent trading claims against a director are successful, a position superior to that attained under the proposed DOCA might be achieved on a liquidation, but that cannot be ascertained with any degree of certainty at this stage and, so far as the insolvent trading claim is concerned, it at least appears as if the relevant director is substantially without assets sufficient to make such a claim worthwhile. 3The administrator is at an advanced stage with arrangements for the realisation of the tangible assets of the company. The administrator in his report to creditors recommends that the company not be placed in liquidation and that the creditors resolve in favour of the proposed DOCA. The largest creditor, which appears to be entitled to about 50 percent of the unsecured debt after giving credit for the value of the security it holds, supports an adjournment of the winding up proceedings to enable consideration of the DOCA. 4As I have said, the meeting is only a few days away and at that meeting the creditors will be able to make their own decision as to which course of action they consider better in their interests. In this case, unlike some which come before the Court, the creditors appear to be quite unrelated to the company and are no doubt the best judges of what is in their own best interests. I do not overlook the right of a creditor, having instituted winding up proceedings, to continue with those proceedings, a matter to which I have often referred when a petitioning creditor is confronted at the last moment by the late appointment of an administrator; but in this case it seems to me to me that the administration is sufficiently far advanced and the proposed DOCA sufficiently comprehensive and real and sufficient in terms of the relative benefit that it offers, that the argument that it is in the interests of the creditors that they should make the decision as to the form of administration to be pursued is much stronger than it was, for example, in In the matter of Reed Constructions Australia Pty Ltd [2012] NSWSC 1045to which counsel referred. 5In that context, I am satisfied that it is in the interests of the company's creditors for the company to continue under administration rather than be wound up. On that basis, I will adjourn the proceedings to Monday 11 November 2013 at 10am in the Corporations Judge directions list for further directions.