An unusual public exam
Saturday November 7, 2009
THE public examinations that are about to be held by ABC's administrators will be unusual in the respect that they will be conducted by an administrator and not a liquidator.Administrations are usually a short-term process lasting months while an administrator decides what to do with the business, for instance, hand it back to the company's directors, give creditors the option of a deed of company arrangement that allows the company to survive, or put it into liquidation.It is one of the compromises that has been allowed to try to balance the unusual requirements of ABC's collapse €” or, more precisely, the need to preserve the status quo while the sale of the remaining centres is finalised.In a controversial move, the banks' receivers have used the administrator's moratorium powers to help keep a handle on the 300-odd landlords of the ABC centres they would otherwise be forced to deal with while managing the sale."Our argument was that the receivers should not get the benefit of a moratorium available to administrators and should be taking direct responsibility for the leases," Vin Harink, from ABC landlord Orchard Funds Management, says.Orchard challenged the administrators in court this year on this point before reaching an agreement that gives landlords a significant role in the sale process and the promise that the centres will be in the hands of new owners by early next year.This means a further extension of the deadline for the long-delayed second creditors' meeting should not be needed beyond March 31.There is no guarantee that the administration €” which has been described as the longest in Australian corporate history €” will end on that date, but Mr Harink is hopeful. "I think there is a reasonable expectation that that timetable will be met."