First Annual Report to Creditors

Transcription

1 CORPORATE RECOVERY First Annual Report to Creditors Allco Finance Group Limited and 49 subsidiaries listed in Appendix A (All in Liquidation) (All Receivers & Managers Appointed) 20 August 2010

2 Contents 1 Glossary Introduction Purpose of Report Key activities undertaken Indemnities provided Status of investigations Entitlement to Excluded Assets Validity of the Security Investigation of offences Other investigations Future steps Remuneration Liquidators Remuneration Cross Guarantee Group Liquidators Remuneration Other entities Remaining activities in the liquidation... 6 Appendix A list of companies in liquidation... 7 Appendix B Receipts and payments... 8 Allco Finance Group - First Report to Creditors - 20 August 2010 Page 1

3 1 Glossary ACN Australian Company Number AFGL Allco Finance Group Limited Allco IB Allco IB Holdings Limited ASIC The Australian Securities and Investments Commission Creditors creditors of any member of the Group Cross Guarantee Group 17 Allco entities that are party to the DOCG DOCA Deed of Company Arrangement DOCG Deed of Cross Guarantee s439a Report 439A Report to Creditors dated 6 March 2009 Security The security held by the Banking Syndicate over the assets of the Companies the Act The Corporations Act 2001 the Banking Syndicate 12 banks with security over the assets of the Companies the Committee Committee of Inspection the Group / the Companies The 17 Allco entities that are in liquidation and party to the DOCG the Liquidators Anthony Gregory McGrath and Joseph David Hayes the Receivers Steven Sherman and Peter Gothard the Trust The AEP Holding Trust Allco Finance Group - First Report to Creditors - 20 August 2010 Page 2

4 2 Introduction 2.1 Purpose of Report This is the First Annual Report ( Report ) to the creditors of Allco Finance Group Limited ( AFGL ) and 49 of its subsidiaries that are in liquidation ( Creditors ) ( the Group or the Companies ) prepared by Anthony Gregory McGrath and Joseph David Hayes, liquidators of the Companies. Members of the Group are listed in Appendix A to this Report. Pursuant to s508(1)(b)(ii) of the Corporations Act ( the Act ) the Liquidators have made a determination to prepare a Report rather than convene a meeting of creditors. This Report has been prepared in accordance with s508(3) of the Act and outlines the key activities that have been undertaken over the period 26 May 2009 to 25 May 2010 and has been lodged with ASIC pursuant to s508(4) of the Act. 2.2 Key activities undertaken The key activities that have been undertaken by the Liquidators can be summarised into the following broad categories: + finalisation of the Deeds of Company Arrangement ( DOCAs ) for Allco Asset Finance Limited and Allco Management Limited; + attending to the retirement and replacement of trustee roles held by various members of the Group; + ongoing investigations; + dealing with regulatory matters, including liaison with ASIC; and + general creditor correspondence and engagement management. The focus of our activity during the past 12 months has been on investigations into the entitlement to certain Excluded Assets and the validity of the security held by the Banking Syndicate. The nature of these enquiries and a brief outline of the work that we have undertaken are detailed further at section 3 below. 2.3 Indemnities provided Indemnities have been provided to the Liquidators for professional fees incurred in relation to the following work streams: + finalisation of the DOCAs; and + retirement and replacement of trustees. The quantum of funding received is outlined in the Receipts and Payments statement included as Appendix B. In addition, as noted at 3.3 below, ASIC has recently agreed to fund the Liquidators to undertake certain investigations into the affairs of the Group. As this work has not yet been completed, no funding has been received as yet. Page 3

5 3 Status of investigations The status of our investigations is as follows. 3.1 Entitlement to Excluded Assets As outlined in our report prepared pursuant to s439a of the Act ( s439a Report ) we indicated that there were a number of assets that were Excluded under the terms of the security obtained by the Banking Syndicate. Following further investigation, the asset of most interest to Creditors is the interest in the AEP Holding Trust that is owned by Allco IB Holdings Limited ( Allco IB ). As Creditors may recall, the assets of the AEP Holding Trust comprise cash and shares in Oceania Capital Partners Limited ( Oceania ), a company listed on the Australian Securities Exchange. The current value of this asset is approximately $25 million. We have conducted substantial investigations into this issue and remain of the opinion that the Excluded Assets properly vest with the Liquidators. That said, we note that the Syndicate are of the view that the proceeds of the Excluded Assets are ultimately captured under the security held by the Syndicate ( the Security ). We note, however, that even if the proceeds of the Excluded Assets were found to be excluded from the Security, the Syndicate would be entitled to prove as an unsecured creditor to extent of the deficiency under the Security. This would substantially reduce the return potentially available to unsecured creditors. Our investigations into the Excluded Assets are continuing. 3.2 Validity of the Security As outlined in our s439a Report, a key avenue of investigation is the validity of the Security. As previously outlined, the Security is susceptible to challenge on a number of grounds most notably that it was enforced within six months of being granted. As Creditors will appreciate, issues regarding the validity of security are complex and require careful examination. Our investigations into the above matters are continuing. 3.3 Investigation of offences In our prior reports and over the course of the Administration/Liquidation we identified a number of potential offences under the Corporations Act. As the Liquidators are without funds we have been unable to investigate these matters. Following discussions with ASIC, in September 2009 we submitted an application to the Assetless Administration fund requesting funding in order that we further progress these inquiries. ASIC has recently agreed to provide funding to the Liquidators so that we may undertake an investigation into certain aspects of the Group s failure. 3.4 Other investigations In our s439a Report we outlined a number of transactions that may warrant further investigation, including: + the acquisition of Rubicon in December 2007; and + the loan to APT in December Creditors may be aware that Steve Sherman and Peter Gothard of Ferrier Hodgson, the Receivers and Managers ( Receivers ) of the Group undertook public examinations of various former executives and directors of the Group in March In the event that the Receivers pursue legal actions against former officers of the Group, it is likely that these will cross-over with claims that would otherwise be available to the Liquidators. We continue to monitor this situation. 3.5 Future steps We continue to progress our investigations in relation to the Excluded Assets and the Banking Syndicate s security. Until these issues are finally determined there remains uncertainty as to whether there will be any return to unsecured creditors from these avenues of enquiry. Page 4

6 4 Remuneration 4.1 Liquidators Remuneration Cross Guarantee Group Details of the Liquidators remuneration for these companies are summarised as follows: Liquidators' remuneration (26 May 2009 to 30 July 2010) to be considered by the Committee of Inspection Company The above has been provided for the information of creditors only. Pursuant to s499(3)(a) of the Act, the Liquidators remuneration for the Cross Guarantee Group will be put before the Committee of Inspection when a committee meeting is convened. 4.2 Liquidators Remuneration Other entities Fees incurred Allco Finance Group Limited 367, Allco Finance (Australia) Limited 6, Allco Nominees Limited 6, Allco Equipment Finance Limited 6, Allco Property Finance Limited 6, Allco Leasing Limited 6, ACME Funds Management Pty Limited 6, ACME Leasing Pty Limited 6, ACME Securitisation Pty Limited 6, RIL Finance Pty Limited 6, RIL Leasing Pty Limited 6, Allco International (Holdings) Limited 6, Allco Singapore Holdings Limited 6, Allco Securitisation Limited 6, Allco Funds Management Limited 6, Allco IB Holdings Limited 6, Allco International (Luxembourg) Holdings Limited 6, Total 470, Given that the members of the Cross Guarantee Group are the key asset-owning entities within the Group, the bulk of the activity in the Liquidation, being the investigation and analysis of the Security held by the Banking Syndicate and the analysis of the Excluded Assets, has been undertaken in relation to the members of the Cross Guarantee Group. Accordingly only minimal professional fees, relating primarily to statutory tasks, have been incurred in respect of the 32 entities that are not members of the Cross Guarantee Group. For this reason, we have not sought to obtain approval of our remuneration in respect of these entities at this stage. Page 5

7 5 Remaining activities in the liquidation s508(3) of the Act requires that a Liquidator provide: + a description of the acts and dealings that remain to be carried out; and + an estimate of when the winding up is likely to be completed. From the perspective of the Liquidators, the work that is outstanding is centred on the ongoing investigations and the possible litigation that may result from these investigations. As Creditors would appreciate, it is difficult to estimate the timeframes within which these issues may be finalised. In relation to the concurrent Receivership of the Group, we note that the Receivers continue to realise the assets of the Group and have advised that the remaining assets will continue to be realised as and when market conditions provide an appropriate opportunity to do so. The Receivers expect that the assets of the Group, excluding litigation claims, will not be fully realised prior to December In light of the prospective litigation, the liquidation could be expected to continue for a number of years. Should you have any queries in relation to the above, please contact Ms Summer Nguyen of our office on (02) Dated 20 August 2010 A G McGrath Liquidator J D Hayes Liquidator Page 6

8 Appendix A list of companies in liquidation Allco Group - Liquidation companies Company Name ACN Allco Finance Group Limited Allco Finance (Australia) Limited Allco Funds Management Limited Allco IB Holdings Limited Allco International (Holdings) Limited ACME Funds Management Pty Limited ACME Leasing Pty Limited ACME Securitisation Pty Limited ACME Warehousing Pty Limited Capital Markets Finance Limited Record Leasing Pty Limited RIL Finance Pty Limited RIL Leasing Pty Limited Allco OBU Pty Ltd AFG Pty Ltd Allco Cross Hudson Investments Pty Ltd Allco Infrastructure Pty Ltd Allco Securitisation Ltd Allco International (Luxembourg) Holdings Ltd Allco Wind Energy Management Pty Ltd Allco Wholesale Investment Management Ltd Allco Property (Europe) Holdings Pty Ltd Allco Singapore Holdings Ltd Mobius Investments Pty Ltd Mobius Financial Services Pty Limited ACME Finance Pty Limited RIL Funds Management Pty Limited Allco IP Pty Ltd Allco Equipment Finance Ltd Allco Property Finance Ltd Allco Leasing Ltd Allco Nominees Ltd AFML Nominees Pty Ltd AEPL Nominees Pty Ltd Allco (CAS) SPV 3 Pty Ltd Allco Equity Partners Management Pty Ltd Allco Aircraft Holdings Pty Ltd MPH Portfolio Holdings Pty Ltd CRSDM Pty Ltd Warringah Rd Management A Pty Ltd Warringah Rd Management B Pty Ltd Warringah Rd Management C Pty Ltd Warringah Rd Management D Pty Ltd Warringah Rd Management E Pty Ltd Warringah Rd Management F Pty Ltd Warringah Rd Management Pty Ltd Allco (CAS) SPV 4 Pty Ltd Mobius Origination Services Pty Limited Allco Nominee (TFHB) Pty Limited Allco Managed Investments Ltd Page 7

9 Appendix B Receipts and payments Allco Finance Group Limited (In Liquidation) (Receivers and Managers Appointed) Receipts and payments for the period from 26 May 2009 to 25 May 2010 Amount ($) Receipts Funding from Allco trusts 144,429 Funding from Receivers and Managers 783,543 GST refunds 30,653 Total receipts 958,625 Payments Advertising costs (3,640) Bank charges (51) Consultants fees (8,162) GST payments (14,080) Legal costs (528,415) Mailing costs (15,266) Meeting costs (room hire) (3,153) Sundry expenses (383) Administrators' expenses (2,551) Administrators' and Deed Administrators' remuneration (454,404) Total payments (1,030,105) Net receipts (payments) for the period (71,480) Opening cash at bank as at 26 May ,911 Closing cash at bank as at 25 May ,431 Page 8