Emu Brewery Mezzanine Ltd (In Liquidation)
Appointment Type: Creditors Voluntary Liquidation Appointment Date: 16/01/2006 ACN: ACN 104 639 410
Appointee(s):
Martin Jones | Office: Perth Case Contact: Shannon Coleman Phone: +61 8 9214 1476
Email: shannon.coleman@fh.com.au |
Background Information:
A first dividend was declared and paid to creditors on the 15 November 2007 at approximately 59 cents in the dollar on noteholders admitted principal. The liquidators were in a position to distribute a second dividend to creditors on or before 8 April 2008, however on 28 March 2008 a letter was received from Mallesons Stephen Jaques, (EBD’s legal representatives) claiming that the balance of funds held by EBM is currently being held on trust on behalf of EBD and that distribution of the funds would convert to a personal liability of the Liquidators of EBM should the funds not be disbursed to EBD.
Following receipt of that letter, the liquidators of EBM sought the Courts direction to release the funds held for the dividend and an application was lodged with the Court on 21 April 2008.
Since this time, the liquidators of EBM have been in and out of court with directions and cost application hearings, however there has been no clear timeframe as to when a full hearing would occur. The delay in the release of the funds for the second dividend distribution was also causing significant emotional and financial distress to investors of EBM and thus for this reason the liquidators of EBM sought to negotiate a settlement with EBD
Current Status and Actions Required by Creditors:
On the 14 October 2009, EBM and its liquidators executed a deed of settlement and release with EBD and its liquidators for EBD’s statement of claim against EBM. The main terms of this deed were:
- EBM agrees to pay to EBD the sum of $1.5 million;
- EBD (and its liquidators) and EBM (and its liquidators) release each other from all claims of any nature which each had, or may have had, against the other;
- EBD waives its rights to prove in the EBM Liquidation; and
- EBM waives its rights to prove in the EBD Liquidation.
The deed of settlement and release was ratified by the court of the 15 October 2009, and on that same day, the Court approved the release of funds to the unsecured creditors and noteholders of EBM. Accordingly the liquidators of EBM declared a dividend to Mezzanine Noteholders, Promissory Noteholders and Unsecured Creditors on 16 October 2009 at an average rate of approximately 36 cents in the dollar on principal claims.
Next Milestone and Estimated Timetable:
The liquidators of EBM are holding $500,000 for any unanticipated legal proceedings against the Company. The liquidators are unaware of any legal claims that may be commence against EBM, however in light of the previous unexpected actions initiated against EBM, they consider it prudent to set aside funds to deal with any such claim.
As such there may be a third dividend to creditors at some time in the future. The rate of this dividend may be anywhere between nil and 3.95 cents in the dollar on creditors admitted principal claims, and is subject to the above unanticipated legal proceedings, and the funds held by KordaMentha as receivers and managers of EBD.
Currently the liquidators are preparing its 533 report to the Australian Securities and Investments Commission (“ASIC”) and following the ASIC’s approval the liquidators may be in a position to wind up the company.
Likely Outcome for Creditors and Timetable:
Currently creditor’s total return on their total admitted principal is approximately 95 cents in the dollar. As stated above, a third and final dividend to creditors may be available to creditors at anywhere between nil and 3.95 cents in the dollar. This will bring the overall dividend rate to creditors at approximately 99 cents in the dollar on their admitted principal claim.