CBL Corporation Ltd & Others [2018] NZHC 368

CBL Corporation Ltd & Others [2018] NZHC 368

The Court granted a short extension of the 14-day termination notice period to 22 March 2018 (not 30 June) because administrators need time to proceed with a sale process and to arrange funding, but employees must be notified and given opportunity to be heard; the Court ordered under s 239ADO that administrators' personal liability under s 239ADH(1) in respect of proposed ANZ funding will not extend beyond the value of the companies' available assets except as agreed with ANZ, because that outcome promotes creditors' interests and ANZ has agreed to the limitation.

Citation
[2018] NZHC 368
Parties
Applicant Administrator: Neale Jackson; Applicant Administrator: Brendon James Gibson; Company in Administration: CBL Corporation Limited; Interested Party Funder: ANZ Bank New Zealand Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
8 March 2018
Procedural Posture
Companies Act Administration / Interim Without Notice Application
Outcome
Application granted in part with modifications and conditions
Legal Topics
Administration, Administrators' Personal Liability, Extension of Termination Notice Period, Funding Arrangements and Limitation of Liability, Watershed Meeting/convening Period
Company Law Insolvency Employment Law Banking Law Civil Procedure Administration Administrators' Personal Liability Extension of Termination Notice Period +2 more

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Parties

Neale Jackson

Applicant Administrator

Brendon James Gibson

Applicant Administrator

CBL Corporation Limited

Company in Administration

ANZ Bank New Zealand Limited

Interested Party Funder

Procedural Posture

Companies Act Administration / Interim Without Notice Application

Legal Issues

  1. 1 Whether the 14-day notice period for termination under s 239Y(3) should be extended
  2. 2 Whether the Court can limit administrators' personal liability under s 239ADH(1) via s 239ADO to available assets in respect of funding provided by ANZ
  3. 3 Adequacy of notice and consultation with employees before making a long extension

Ratio Decidendi

The Court granted a short extension of the 14-day termination notice period to 22 March 2018 (not 30 June) because administrators need time to proceed with a sale process and to arrange funding, but employees must be notified and given opportunity to be heard; the Court ordered under s 239ADO that administrators' personal liability under s 239ADH(1) in respect of proposed ANZ funding will not extend beyond the value of the companies' available assets except as agreed with ANZ, because that outcome promotes creditors' interests and ANZ has agreed to the limitation.

Court Disposition

Application granted in part with modifications and conditions

Orders

  • Applicants granted leave to commence proceedings without notice
  • Pursuant to s 239Y(4) Companies Act 1993 the 14-day period for notice of termination under s 239Y(3) is extended for CBL Corporation until 22 March 2018