We have been involved in some of the most important and complex insolvency matters in Australia’s corporate history. Some recent examples are listed below.
Sons of Gwalia
Freehills acts for the deed administrators of Sons of Gwalia, dealing with all aspects of the administration. This has included complex re-financing of the company’s operations, the sale of its major assets and ground-breaking litigation over shareholders’ rights and innovative solutions in relation to assessment of shareholder claims and the recovery of shareholder losses from third parties under a revised Deed of Company Arrangement . The High Court of Australia‘s decision has had a big impact on Australian companies and their relationships with lenders, and has led to the release of a discussion paper by the Corporations and Markets Advisory Committee. The debate in this regard continues to rage.
Bell Group
The Bell matter is the largest and longest-running commercial trial ever held in Australia. We act for 20 banks in defending claims for in excess of A$1.5 billion by companies in the Bell Group and their liquidators in the Supreme Court of Western Australia. There has been a large separate dedicated trial team of over 30 Freehills lawyers co-ordinated from offices in Melbourne, Sydney and Perth. The trial, which ran for more than three years ended in late September 2006 and judgment delivered in September 2008. The matter is now the subject of appeal.
Octaviar Ltd (previously MFS Ltd)
We advised Octaviar on its strategic review and attempted restructure of the group’s debt, including the sale of parts of its business and dealing with major creditors, regulators and investors.
Since September 2008, we have acted in relation to the administration, deeds of company arrangement and court applications relating to those deeds, including the important court decision regarding the registrability of a charge variation in early 2009.
Babcock & Brown
Freehills acted for Babcock & Brown Ltd (BBL) and Babcock & Brown International Pty Ltd (BBIPL) in relation to the restructuring of BBIPL’s A$3.25 billion bank debt and the proposed restructuring of BBL’s Australian and New Zealand notes debt.
Restructuring the bank debt (for a syndicate of 25 Australian and foreign banks) involved working closely with the board, senior management and investment bank advisers to guide them through the difficult solvency issues which the group faced, identifying possible restructuring options which enabled both the bank syndicate and the directors to feel comfortable with proceeding, and negotiating on behalf of the company the relevant amending documentation.
Centro Property Group
We advised Centro on its stabilisation arrangements. These were a groundbreaking package of refinancing, restructuring and equity issuance measures to provide a solid foundation for the future of Centro and retain value for its investors following the challenges inflicted on Centro by the global liquidity crisis. It was an incredible achievement for Centro to be able to do this while other companies with similar issues triggered by the crisis were going into administration or winding up. The matter involved negotiations with Australian and United States lender groups and United States private placement noteholders, varying terms of numerous debt facilities and converting debt to a hybrid.
ERG Limited
We advise ERG on the termination of its T-card contract with the New South Wales State Government and consequent solvency issues and restructuring options. This is a major litigation matter for a well-known Australian technology company that specialises in ticketing systems and operates internationally.
Harris Scarfe
We act for an Australian bank and the receivers and managers of the Harris Scarfe Group in its pursuit of the auditors. The claim raised complex legal and factual issues relating to causation and loss, auditors’ duties, liabilities of directors and officers and business valuation. The case was also complicated by the fact of the fraud which required a complex reconstruction of the financial accounts of the companies to be undertaken. The trial commenced in late 2006 and the matter was resolved in April/May 2007.
Absolute Capital Group
We advise Oasis Fund Management Ltd, a superannuation platform, in relation to exposures to sub-prime impaired debt obligations, including appointment of receivers to recover funds. These matters relate to the appointment of administrators to the Absolute Capital Group, a fund manager specialising in alternative investments.
HIH Insurance Limited
We act for the underwriters of the directors and officers’ liability policy of the HIH Group. The liquidation of the HIH Group, one of Australia’s largest general insurers and reported to be Australia’s largest corporate collapse at over A$5 billion, led to various issues and queries as to the manner in which the insurance and financial services industry is regulated in Australia. We have been involved in all aspects of this matter, including the HIH Royal Commission. The sheer scale and complexity of the issues surrounding the collapse of the HIH Group meant that the Freehills defence team drew on the breadth of the firm’s insolvency, corporate insurance, regulation and large-scale litigation expertise.
Knights Insolvency
Knights Insolvency was the first firm of insolvency practitioners to incorporate and float. Since it sank—going into administration in 2005—Freehills acts for the administrators, trying to unravel the complexities of an insolvent insolvency firm. In particular, Freehills handles the interaction with regulators and with creditors of the companies to which members of Knights have been appointed.
Nextgen
Freehills acted for the receivers of telecommunications network company Nextgen. Nextgen went into receivership in June 2003. Freehills was involved previously in advising the syndicate of bank lenders to Nextgen both in relation to their original facilities and on insolvency-related issues. As the company’s financial position worsened, Freehills subsequently assembled a multi-disciplinary team to act for the receivers. The team included banking, property, telecommunications and mergers and acquisitions specialists as well as insolvency experts. The network was ultimately sold to the advantage of all stakeholders.
Bill Express
Freehills currently acts for the voluntary administrator of Bill Express.
Living and Leisure Australia Group (LLA)
We recently advised LLA in connection with the successful restructure of the company during a time of financial uncertainty. This required forbearance from its senior financier. The company has now completed a recapitalisation program which has strengthened the financial position of the group while retaining the business it operated.
In addition to the above examples, we have extensive experience acting on a broad range of restructuring, turnaroud and insolvency matters in a variety of smaller matters.
