The evidence before the court established that:
- there were 995 registrations on the Personal Property Securities Register (“PPSR”)
- even after writing to all creditors who had an interest recorded in the PPSR about 80% of secured creditors had failed to respond
- and the administrators also wrote to a number of financiers, advertised in national and state newspapers and sent an email to 3000 creditors but 3685 items of plant and equipment remained unclaimed (representing 77% of the items of plant and equipment identified by the administrators).
In the circumstances, the court agreed with the administrators’ view that given:
- the ongoing cost including significant rental costs
- and the efforts undertaken by the administrators up to the time of the application,
it would be in the best interests of the companies and their creditors that all unclaimed plant and equipment be sold as soon as possible. In the circumstances, the order made was to the effect that: the administrators first place an advertisement advising of the proposed auction of the unclaimed plant and equipment;
- that auctioneers be engaged to conduct the auction sales
- the administrators hold the net proceeds of sale in a separate escrow account for a period of three months
- upon completion of the sale process the administrator write to all creditors advising them of the realisation of the assets and the three month time period during which the proceeds would be in escrow
- and after the three month period the administrators would apply the proceeds of sale in the ordinary course of the administration of the companies.
The judge was satisfied that it was appropriate to grant these orders as there had been genuine and substantial difficulties in identifying those items of plant and equipment that might be subject to a security interest and because the administrators had taken sufficient steps to attempt to clarify that question. The court also granted the administrator’s request for a confidentiality order to protect the valuation material which had been placed before the court on the application.
