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This report is to be read in conjunction with the Administrators' Section 439A
Report dated 5 September 2013 ("Section 439A Report") and the Update Report to
Creditors dated 23 September 2013 ("Update Report"). We note that we have no
material changes or subsequent matters to report to creditors other than those detailed in this circular.
As discussed in the Section 439A Report, the Directors of the core H&S Vision
Group entities have been attempting to facilitate a refinance/debt sale of the debt
owed to the secured creditor. This would be via a substantial Hong Kong
commercial entity which we will refer to as HKR for the purposes of this report. Should the refinance/debt sale occur, the Directors are proposing that this would be
a precondition of and be the basis upon which they submit a proposal for a Deed of
Company Arrangement (“DOCA”) which would include a repayment of unsecured
creditors (potentially in full).
At the concurrent second meeting of creditors on 16 September 2013, the solicitor representing the Directors appraised the meeting of the current understanding of the
Directors with regards to the refinance negotiations and requested that an
adjournment of the meetings be sought so as to allow additional time for those
negotiations to progress to a stage whereby the Directors were in a position to
submit a Deed for consideration. The motion to adjourn the concurrent meeting to 30 September 2013 was then put to the meeting and passed by those creditors
attending.
As advised in the Update Report, we received a letter from the Directors on 20
September 2013, which provided an update on the refinance position and included a
DOCA proposal, which included the use of a Creditors Trust.
The Administrators' solicitors wrote to the Directors' solicitors on 23 September
2013, noting that critical preconditions for the DOCA to proceed are that both the
secured creditor and the incoming financier confirm support of the DOCA proposal
and requested further details on the proposed DOCA , in particular in regards to the
use of a Creditors Trust for the purposes of reporting to creditors.
The Administrators further noted that they are required to consider whether there is
a proposal suitable for submission to creditors, and that it will rarely be appropriate
for administrators to submit a DOCA proposal where they do not have sufficient concrete details to comply with all of the disclosure obligations. Significantly greater
disclosure would be required in this instance as the DOCA proposed included a
Creditors Trust, as discussed in the Update Report. Given the timing of the
submission of the proposal, the Administrators did not have adequate time to
prepare a detailed review to submit to creditors at the meeting of 30 September 2013.
During the week leading up to the adjourned meeting of 30 September 2013, the
Administrators sought further details from the Directors regarding the DOCA
proposal and confirmation from HKR and the secured creditor as to the likelihood
of the refinance proceeding.
Advice was received from HKR's solicitors on 26 September 2013 that their client
was currently not proceeding with negotiations.
The Administrators were subsequently advised by the Directors' solicitor on the
morning of 30 September 2013, that the HKR had now advised the secured
creditors lawyers they wished to reopen refinance negotiations. The Directors therefore sought a further adjournment of the meeting to allow time for negotiations
to progress and thus enable the proposed DOCA to be submitted to creditors for
consideration.
The meeting of 30 September 2013 was opened and then adjourned for 30 minutes
whilst the Administrator sought confirmation from the secured creditor as to whether negotiations were continuing to understand whether a further adjournment
was appropriate. After receiving confirmation that the HKR had requested refinance
negotiations be reopened, it was considered appropriate to request the creditors vote
on a further adjournment of the meeting for 21 days. This would allow the
Administrators time to review the proposal in detail and seek further details as to the progress of the negotiations between HKR and the secured creditor before being in
a position to submit the DOCA proposal to creditors. Creditors attending the
meeting passed the motion for a further adjournment.
On 4 October 2013, the Administrators, via their solicitors, wrote to the Directors'
solicitors requesting further details regarding the DOCA proposal and highlighting
the Administrators' concerns regarding the inclusion of a Creditors Trust.
As outlined in the Update Report the use of a Creditors Trust is generally discouraged by ASIC unless there is a compelling legal and/or commercial reason to
do so and the assessment of any DOCA including a Creditors Trust involves
significant analysis and review before being capable of being presented to creditors.
Following further correspondence and discussions with the Directors' and their
solicitor on 10 October 2013, the Administrators received an amended draft DOCA proposal that importantly removed the requirement for a Creditors Trust and
clarified some of the issues raised by the Administrators.
The Administrators' review of the DOCA proposal follows at section 2.
Second meeting of creditors reconvened
At the second meeting of creditors of the Companies, convened concurrently at
11.00am, Monday 30 September 2013, it was determined by those creditors present
to adjourn the meeting. The continuance of this meeting is now convened as
follows:
Time : 11.00am
Date : Monday, 21 October 2013
Place : Pullman Reef Hotel Casino, 35-41 Wharf Street, Cairns, Qld
Further details of this meeting is provided at Section 6.
Proposal for a Deed of Company Arrangement ("DOCA")
As advised in Section 2 of this report, the Directors provided an updated draft
DOCA proposal on 10 October 2013. This proposal is attached in full at Annexure
A.
We note that the Directors have confirmed they are willing to further discuss the specifics of the DOCA proposal to the extent that the Administrators have any
concerns but have issued the current version in time for it to be reported to creditors
ahead of the creditors meeting scheduled for 21 October 2013.
Contents of the Proposed DOCA
Assumed Pre-Conditions to the DOCA
As previously advised, the DOCA is predicated upon the following key terms :
� A transaction can be completed between the secured creditor and the HKR in
regards to a refinance of the Group's debt;
� That once a refinance has been completed that the HKR agrees to the release of
a residential unit ("the unit") from the security currently provided and the HKR
further agrees to allow payments to the proposed DOCA fund from the sale of
Group assets in advance of the HKR's security over those assets.
The DOCA proposal provides that the directors and the Administrators have 21 days to negotiate and execute the formal DOCA. It further provides that if either of
the above two conditions cannot be met within 60 business days of the execution of
the DOCA, the DOCA will be effectuated (finalised) and the Companies will be
placed into liquidation.
We estimate that the proposal allows until approximately 7 February 2014 for the above pre-conditions to be met during which time the companies will remain under
the control of the Deed Administrators (and Receivers).
Contents of the Proposed DOCA cont'd
Key Terms of the DOCA
In broad terms the DOCA proposes the following (assuming the pre-conditions are
satisfied) key terms :
� The Administrators and the Directors agree final terms and execute a DOCA reflective of the terms proposed within 21 days of the creditors voting for the
DOCA proposal.
� The Voluntary Administrators will become Deed Administrators on the
execution of a DOCA (detailed terms to be negotiated if creditors vote in
favour).
� A DOCA fund ("the Fund') will be established by the Deed Administrators.
� After execution of the DOCA, the Deed Administrators (and Receivers) will
continue to trade the businesses until the secured financier and the HKF
complete a debt sale/assignment (via the Trade Confirmation) and the Directors
execute a debt restructure arrangement with the HKR. At which time the Directors will take control of the business operations of the Group.
� Within a period of 6 months from date of DOCA execution, the Directors will
cause $1.5m to be paid into the Fund from the sale of assets of the Group.
� First mortgage security would be granted to the Deed Administrators, over the
unit owned by Ross Straguzi (Director) and estimated to be worth $2.5m, as security for performance by the Directors obligations under the DOCA.
� Upon receipt of the funds and after the payment of the Deed Administrators'
reasonable fees and expenses, the Deed Administrators will pay the Deed
Creditors amounts equivalent to the respective dividends they would have
received on a winding up, as if the funds were available to the Companies on a pro rata basis, based upon the net asset deficiencies of the respective Companies.
� After further discussions with the Directors on the above point we understand
that their intention is that all creditors are able to claim against the fund equally
although the current drafting may not reflect this.
� Deed Creditors are defined to include all creditors who are entitled to prove in
the liquidation of the Companies, other than ANZ or its assignees, or entities
related to the Directors.
� Employees whose claims may have crystallised due to termination would be dealt with as Deed Creditors, although being afforded priority as if claiming in a
liquidation.
� In the event the Deed Fund does not receive the intended distribution in full
within 6 months, the security over the residential unit could be enforced to
facilitate payment to the unsecured creditors from the sale proceeds of the unit.
� It is also included in the Deed that the sale of the Child Care centre assets is to be
progressed by the Administrators / Deed Administrators while the DOCA
progresses.
The Directors have advised that current employees will remain with the Companies
and their entitlements will be paid from on-going trading.
Therefore employees would not participate in any distribution from the Deed Fund
on the basis that their entitlements would continue to be met by the Companies
once the DOCA has been effectuated, which occurs once the $1.5m or proceeds of
sale of the Unit have been distributed to creditors in accordance with the Deed
Proposed.
Administrators considerations in regards to the proposed DOCA terms
Since the meeting of 30 September 2013, the Administrators requested the Directors to consider a number of issues identified from the initial review of the original
proposal submitted on 20 September 2013. The key issues raised have now been
addressed as follows:
Inclusion of a Creditors Trust
� The Creditors Trust has been removed from the current proposal.
Definition of "Unsecured Creditors"
� A definition of Deed Creditors has been included in the revised Deed.
Employees Position
� Employees will not participate in a distribution from the Deed Fund on the basis
they will continue to be employed by the Companies and once the Companies
have effectuated the DOCA terms the Companies return to the control of the
Directors and would continue to trade. Directors are still to provide evidence
however that the Companies can continue to trade on a solvent basis.
Assets to be Sold to Provide Deed Funds
� The current draft proposal provides for the childcare centre asset sales to
progress but doesn’t specify which assets the $1.5m will be paid from. At the time
of writing we have not received advice from the HKR or the secured creditor
that this would be acceptable.
Valuation of Unit
� The Directors' solicitor has advised that an independent, current market valuation
is being sought.
Possible Sale of Unit Immediately
� The Directors have expressed concern that an immediate sale of the unit may not maximise its realisable value.
� However, the current proposal allows for the enforcement of the Administrators'
charge over the property within 6 months (previously 12 months) if funds from
Administrators considerations in regards to the proposed DOCA terms
cont'd
Pooling of Creditors Claims
� The Administrators understood from information provided by the Directors and
their solicitors that creditor claims of the Group would be "pooled" and as such
receive an equal distribution.
� The current proposal seems to contemplate that creditors would participate in the Deed Fund relative to the net asset deficiency of the Company in which they
are a creditor. We are seeking further clarification of this issue but initial
discussions indicate that a pooled arrangement may still be acceptable which
would ensure that the full $1.5m would be available to pay creditors across the
entire Group.
Solvency
� As yet, the Directors have not provided evidence that the Companies would be
able to trade on a solvent basis once the Companies were handed back to the
Directors and the Deed was effectuated.
� The Administrators must establish that sufficient funding will be available, possibly as part of the Debt Restructure Agreement with HKR, to ensure that
further debts are not incurred in the Companies and not paid when due.
Fees and Costs of the Deed Administrator
� The current proposal allows for the fees and costs of the Deed Administrator to
be paid from the Deed Fund, in priority to payments to Deed Creditors.
Any Shortfall incurred by Partly Secured Creditors
� It seems that the Administrators concerns regarding any crystallised claim by
partly secured creditors (such as equipment finance and leasing companies) has
been addressed by not excluding them from the definition of Deed Creditors.
Support of the secured creditor and the HKR
� As previously mentioned, due to the terms of the Deed it is a pre-condition that
the secured creditor and HKR support the Deed in order for it to have any prospects of success. In this regard we have sought advice from both parties as to
the status of their negotiations and support for the proposal.
� This is critical because:
− The costs of pursuing this DOCA proposal without success will be material
and will delay the otherwise orderly realisation of assets of the Group and potentially deteriorate the value of those assets and will therefore reduce the
total value of assets available to creditors;
− The Deed proposal requires both the secured creditor and HKR to enter
certain agreements that must be completed for the Deed to succeed; and
− The HKR must release part of their securities (assuming they take an assignment of the securities held by the current secured creditor), for the
benefit of unsecured creditors, in effect subrogating part of their first ranking
security to unsecured creditors.
� At the date of writing this report we are not aware of the status of the
negotiations other than they have recommenced and we understand they are on-going.
� Neither the secured creditor or the HKR has at this stage confirmed support (or
otherwise) for the Deed Proposal. However we will continue to seek advice in
this regard and will update creditors at the meeting of 21 October 2013.
Second Meeting of Creditors 21-Oct-13 Scheduled for 21 October 2013
Execute DOCA 11-Nov-13 Must occur within 15 business days of second meeting
Establish Conditional Mortgage 18-Nov-13 Allow 5 business days from execution of DOCA
Trade Confirmation Negotiations 25-Nov-13 Must occur with 10 business days after execution of DOCA
Debt Restructure Negotiations 25-Nov-13 Must occur with 10 business days after execution of DOCA
Confirmation Date 25-Nov-13 Must occur with 10 business days after execution of DOCA
Agree Terms of Trade Confirmation 07-Feb-14 Agree terms of the trade confirmation within 60 business days of the execution of the DOCA otherwise proceed to Liquidation
Agree Terms of Debt Restructure 07-Feb-14 Agree terms of the debt restructure within 60 business days of the execution of the DOCA otherwise proceed to Liquidation
Payment of $1.5 million into Deed Fund 26-May-14 Must occur within 6 months of execution of DOCA
Pay Dividend to Unsecured Creditors 24-Aug-14 Allow 3 months from when contribution has been made to Deed Fund
DOCA Effectuated 31-Aug-14 Allow 5 business days from when dividend has been paid
- - - - - - OR - - - - - -
Sale of Unit 25-Nov-14 Only to occur if $1.5 million contribution has not been made to the Deed Fund. Enforcement of mortgage then sale can occur 6 months after execution of DOCA
Pay Dividend to Unsecured Creditors 23-Feb-15 Allow 3 months from when contribution has been made to Deed Fund
DOCA Effectuated 02-Mar-15 Allow 5 business days from when dividend has been paid
Payment of $1.5 million into Deed FundPay Dividend to Unsecured Creditors
DOCA Effectuated- - - - - - - OR - - - - - - -
Sale of UnitPay Dividend to Unsecured Creditors
DOCA Effectuated
Key Events Timeline
Proposal for a Deed of Company Arrangement
The chart below provides a timeline of the key events of the Deed proposal.
The table below provides further information regarding the key events identified in the chart above
7-Feb-14:
Latest date the for trade confirmation to be completed. Proceed to Liquidation if the terms of the debt restructure and trade confirmation have not been agreed upon by this date.
31-Aug-14:
Estimated effectuation of DOCA if sufficient funds received into Deed Fund and distributed to Deed Creditors.
2-Mar-15:
Estimated effectuation of DOCA following the sale of the unit to provide funds for Deed Creditors
Note: The timelines presented below assume the full extent of time available under the Deed is required to complete the Deed. We note that actual timeframes could be less if the relevant conditions of the Deed are completed earlier.
� The above table details the book values of assets as disclosed in the latest
management accounts provided.
� Whilst it has been difficult to accurately calculate a return, we are of the opinion
that it is unlikely unsecured creditors will receive a return/dividend in the event the Companies are wound up. This is due to the Group's overall balance sheet
deficiency in assets after the payment of the secured creditor, ANZ who have
cross collateralised security over the Group in respect to no less than $51m of
total facilities held throughout the Group.
� At this stage our estimates are necessarily calculated on book value of assets as we do not have appropriate updated valuations on the core assets of the Group
to consider an alternative calculation. Some of these assets are also under the
control of the receivers and hence we are not in a position to obtain valuations or
understand directly the current trading position of those assets and therefore the
likely realisable value.
� We note that due to the above issues actual asset recoveries may vary from the
book values used in our calculation above.
� Where applicable, the payment and collectability of all related party debtor and
creditor amounts have been excluded as the likelihood of recovery is uncertain.
� The adjacent calculations do not include fees and costs of the Receivers and Managers and the Voluntary Administrators.
� The calculation also excludes interest and other costs which are accruing and are
payable to the secured creditor, ANZ.
It is unlikely that unsecured creditors will receive a distribution from the
Company in the event of Liquidation due to the significant asset
As detailed in the Section 439A Report, the following options are available to
creditors to decide pursuant to s439C of the Corporations Act, being that:
1. The Company execute a Deed of Company Arrangement;
2. The administration should end; or
3. The Company be wound up.
Since our Section 439A Report was issued we have received a DOCA proposal from
the Directors as outlined in this report.
As outlined in this report, the critical precondition for the DOCA to have genuine
prospects of success is for both the secured creditor and HKR to be in support of the proposed Deed. We have sought such confirmation and at the time of writing
neither party has been able to confirm such support, although we understand
negotiations are ongoing and the situation may change.
In the absence of confirmation from the secured creditor and the HKR, in regards
to the above issues, we cannot be comfortable that the Deed has a realistic prospect of success.
In the absence of confirmation of support from the secured creditor and HKR
we do not consider that at the time of writing this report that a Deed proposal
exists that is capable of being recommended to creditors.
On that basis, the Administrators recommendation remains as per our initial
Section 439A Report that the Companies be placed into liquidation.
We do however note that should the Directors be able to clarify the issues raised in
this report and obtain confirmation of the support for the proposed DOCA of the
secured creditor and HKR ahead of the reconvened second meeting of creditors
then we reserve our rights so as to change our recommendation to be presented to the meeting.
We will continue to pursue all parties for clarity on these issues so that we
may update creditors at the meeting of 21 October 2013.
The remuneration to be approved has been split between actual fees incurred for the
period 5 September 2013 to 30 September 2013, for which approval has not been
received, and the estimated future fees to be incurred for the period 1 October 2013
to 21 October 2013, being the date of the reconvened second meeting.
Remuneration
Remuneration
Approval Sought
DescriptionAmount
($)
Joint and Several Administrators' actual remuneration incurred for the period 17 September 2013 to 30 September 2013 and not yet approved. ($2,595.00 less discount of $2,500.00)
95.00
Joint and Several Administrators' estimated future remuneration for the period 1 October 2013 to 21 October 2013, being the date of the reconvened second meeting
The remuneration to be approved has been split between:
� Actual fees incurred for the period 5 September 2013 to 30 September 2013, for
which approval has not been received;
� Estimated future fees to be incurred for the period 1 October 2013 to 21 October 2013, being the date of the reconvened second meeting; and
� Estimated future fees to be incurred for the period 22 October 2013 to 11
November 2013, being the date of execution of a Deed of Company
Arrangement.
Approval Sought
DescriptionAmount
($)
Joint and Several Administrators' actual remuneration incurred for the period 17 September 2013 to 30 September 2013 and not yet approved. ($2,595.00 less discount of $2,500.00)
95.00
Joint and Several Administrators' estimated future remuneration for the period 1 October 2013 to 21 October 2013, being the date of the reconvened second meeting
8,800.00
Joint and Several Administrators' estimated future remuneration for the period 22 October 2013 to 11 November 2013, being the date of execution of a Deed of Company Arrangement
Proxies lodged for the second meeting of creditors commenced on 16 September
2013 and 30 September 2013 are valid for this meeting. However, as there has been an update to the motions to be put to the reconvened meeting, it would be
preferable if creditors re-submitted proxies to confirm their voting intentions.
Please ensure that the proxies are signed under seal, where appropriate (if you are a Company) and if the proxy is executed by a power of attorney, that a copy of the
power of attorney is enclosed with the proxy form. The proxy form is enclosed as
Appendix F.
Proxies for the meeting can be lodged in the following ways:
� Post: to arrive no later than 5.00pm on the business day prior to the meeting,
being Friday 18 October 2013.
� Facsimile: to no later than 5.00pm on the business day prior to the meeting,
being Friday 18 October 2013.
� In Person: by person with a person attending the meeting; or
business day prior to the meeting, being Friday 18 October 2013.
If proxies are lodged by facsimile or email, the Act requires that the original proxy
must be lodged with the Voluntary Administrators within 72 hours of lodging the
faxed or emailed copy.
Contact details
Should you have any queries in relation to any matter raised in this report then
please do not hesitate to contact Lyle Fernandes on (07) 3222 0394.
Yours faithfully
Shaun McKinnon Michael McCann
Joint and Several Administrator Joint and Several Administrator
Reconvened second meeting of creditors
The reconvened second meeting of creditors is to be held at the Pullman Reef Hotel
Casino, 35-41 Wharf Street, Cairns QLD 4870 at 11:00am on Monday 21 October 2013. Please arrive 30 minutes before hand to allow sufficient time for registration.
The notice in regards to the meeting is enclosed as Appendix D.
The meeting will be open to creditors for questions and general discussion. Should
you wish to have us address any issue in detail please advise us prior to the meeting
date. This will allow sufficient time to prepare a detailed response to your question.
Please note that attendance at the meeting is not compulsory.
Telephone attendance
Should you not be able to attend the second meeting of creditors in person, creditors are invited to attend via telephone. In order to do so, you will be required
to submit a proof of debt and proxy in favour of the party attending via telephone as
detailed below.
Please contact Lyle Fernandes of this office at [email protected] no later
than 5.00pm on the business day prior to the meeting, being Friday 18 October 2013
to obtain dial in details.
Lodging of proofs of debt
Should you not have already lodged a proof of debt, you are required to complete
Various Companies Within the H & S Vision Group (Receivers & Managers Appointed)(In Administration) ("the Companies") – Proposal For Deed of Company Arrangement
Further to our recent communications, we now enclose an amended proposal for a Deed of Company Arrangement for the Companies ("DOCA"). The key changes to the amended proposal are:-
· The proposal no longer includes provision for a creditors trust; and
· Instead, upon satisfaction of certain conditions to the full operation of the DOCA, and the provision of a mortgage over Ross Straguszi's Unit to guarantee payment of the DOCA contribution of $1,500,000.00, the H & S Vision group of companies will be released to the control of the directors.
We have had the benefit of some feedback from you, as to your clients views on the workability of some aspects of the DOCA proposal. This proposal incorporates most but not all of those suggestions. In some instances, there has simply been insufficient time for our clients to fully consider the ramifications of suggested changes, whilst meeting your clients desired time line for provision of the DOCA proposal. Our clients are amenable to discussing further any outstanding concerns of your client, with the possibility of amending the final proposal voted on at the creditors meeting. Yours faithfully MacDonnells Law
Writer: Ian Conrad ½ Senior Counsel Direct: + 61 7 4722 0247 Email: [email protected] Enclosure Liability limited by a scheme approved under professional standards legislation.
DOCA Proposal
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PARTIES:
The Administered Companies
The Deed Administrators
Ross Straguszi, Peter Hopkins and Rose-Marie Dash (the Proponents)
DEFINITIONS
1. Definitions:-
a. Administered Companies means the companies listed in the Report toCreditors dated 13th August 2013;
b. Completion Date means the date upon which Completion of the TradeConfirmation occurs;
c. Completion of the Trade Confirmation means ANZ either:-i. releasing; orii. unconditionally assigning, transferring or novating to GN each of the
Debts and each of the Securities;d. Conditional Mortgage means the Conditional Mortgage referred to in
paragraph 12;e. Confirmation Date means the date that is 10 business days after execution of
the DOCA or such later date as is agreed to in writing between the DeedAdministrators and the Proponents;
f. Debt Restructure Agreement means a proposed agreement between theProponents and GN under which the terms applicable to the Debts arerenegotiated,
g. Debts means the debts owing under the facilities being assigned or novatedunder the Trade Confirmation;
h. Deed Administrations means the Administrators of the AdministeredCompanies;
i. Deed Creditors means the creditors of the Administered Companies whowould be entitled to prove in the liquidation of those companies, other than theANZ or its assignees, the Proponents or entities related to the Proponents;
j. DOCA means the Deed of Company Arrangement described in clauses 2,3,19,1 and 22;
k. DOCA Fund means the fund set up under the DOCA described in clause 18and 19;
l. Effectuation of the DOCA means effectuation of the DOCA under paragraph24;
m. GN means General Nice Coke & Chemicals (Hong Kong) Co. Ltd.;n. The Mortgage Conditions Precedent are:-
i. Completion of the Trade Confirmationii. Execution of the Debt Restructure Agreement
o. Property means unit 91 'Harbour Lights', 1 Marlin Parade, Cairns,Queensland 4870;
p. Proponents Contribution means the payment into the DOCA Fund referredto in clause 10;
q. Released means the release of the Administered Companies to the control ofthe Proponents as directors under clause 8(d);
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r. Securities means the securities being assigned or novated under the TradeConfirmation;
s. Sunset Date means the date that is 60 business days after execution of theDOCA or such later date as is agreed to in writing between the DeedAdministrators and the Proponents;
t. Trade Confirmation means [complete details when available];
DOCA PROCESS
2. The DOCA will include terms typically provided for in a trading DOCA, consistent withthe terms of this Proposal. The terms of the DOCA will be negotiated between theProponents and the Administrators and the DOCA must be executed within 21 daysof approval of this Proposal at the adjourned 2nd meeting of creditors of theAdministered Companies. The Administrators may agree to modify the DOCA fromthe terms outlined in this Proposal where they consider to do so will make the DOCAmore practicable and no creditor will be disadvantaged as a result.
3. The Administrators of the Administered Companies will be appointed as DeedAdministrators under the DOCA.
4. The DOCA will contemplate the continued trading of the Administered Companiesuntil they are Released.
5. The Deed Administrators will in consultation with the Proponents market andendeavour to sell, at market value, the childcare centre assets of the AdministeredCompanies.
6. Continuation of the DOCA beyond the Confirmation Date will be conditional upon:-
a. Ross Straguszi executing and delivering to the Deed Administrators theConditional Mortgage in registrable form; and
b. the Trade Confirmation remaining on-foot as at that date.
7. The Proponents will endeavour to negotiate the terms of a Debt RestructureAgreement with GN. That agreement will be conditional upon, and will come intoeffect on Completion of the Trade Confirmation. The Proponents will notify the DeedAdministrators in writing when the Debt Restructure Agreement is executed.
8. Upon the Deed Administrators being notified in writing of both:-
a. execution of the Debt Restructure Agreement by the parties thereto; and
b. Completion of the Trade Confirmation,
and being satisfied that has occurred and that the relevant Companies would onRelease be solvent, the Deed Administrators shall forthwith:
c. pay into the DOCA Fund the balance cash funds held by the AdministeredCompanies after payment of their proper fees and outlays incurred in theDOCA administration; and
d. Release the Administered Companies to the control of the directors thereof.
9. If the conditions mentioned:-
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a. in paragraph 6 are not satisfied by the Confirmation Date; or
b. in paragraph 8a&b are not satisfied by the Sunset Date, the DOCA shall beterminated and the Administered Companies shall be placed in liquidation.
10. The Proponents will subject to the conditions stated in paragraphs 8a&b procure thepayment of $1,500,000 into the DOCA Fund within 6 months of the date of executionof the DOCA.
11. Upon payment out of the DOCA Fund in accordance with clause 19.b the DeedAdministrators shall take such steps as are required under the Corporations Act 2001(Cth) to confirm the Effectuation of the DOCA.
THE CONDITIONAL MORTGAGE
12. The Conditional Mortgage will be negotiated between the Proponents and the DeedAdministrators and will include the following terms:
a. The mortgage will provide a first registered mortgage over the Property;
b. The obligations secured under the mortgage will be the obligations of themortgagor to make the Proponents' Contribution ;
c. The rights of the mortgagee shall be conditional upon and arise only uponsatisfaction of the following conditions precedent:
i. Execution of the Debt Restructure Agreement;ii. Completion of the Trade Confirmation; andiii. an Event of Default of the Proponents as defined under the DOCA.
THE DEBT RESTRUCTURE AGREEMENT
13. The Debt Restructure Agreement will be negotiated between the Proponents andGN, will be executed by the Confirmation Date and will:-
a. permit the orderly sale of certain assets of the Administered Companies; and
b. permit the payment of the Proponents' Contribution to the DOCA Fund afteragreed debt reduction targets are met.
14. The Deed Administrators shall have the discretion to waive any of the requirementsof paragraph 13 if they consider it is in the interests of Deed Creditors to do so.
15. The terms of the Debt Restructure Agreement will be confidential and the finaldocument will be provided to the Deed Administrators in strict confidence, for the solepurpose of verifying compliance with clause 13.
SALE OF CHILDCARE ASSETS
16. The Deed Administrators will continue to market and endeavour to sell the childcarecentre assets of the Administered Companies as a going concern and will in doing soonce the Trade Confirmation is unconditional except for FIRB approval:-a. Liaise and consult with the Proponents on that marketing program;b. Take advantage of the Proponents' knowledge and understanding of those
centres, the market for those centres and their marketing expertise;
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c. Consult with the Proponents on the terms of any proposed sale;d. With the assistance of the Proponents, endeavour to negotiate with the co-
owner of the Innisfail child care centre, the sale of that Innisfail child carecentre as a package with the other child care centre assets; and
e. Not sell the child care centre assets at less than any going concern valuationobtained by them in respect thereof without the consent of the Proponents,which shall not be unreasonably refused.
17. The Proponents will:-a. Provide the assistance referred to in the previous clause without charge; andb. Not interfere with the proper sale of the child care centre assets by the
Administrators in accordance with the previous clause.
THE DOCA
18. The DOCA Fund will be established by the Deed Administrators after the DOCA isexecuted and before the Confirmation Date.
19. The provisions relating to the DOCA Fund will include the following terms:
a. The DOCA Fund will include:-i. any surplus of funds paid into the DOCA Fund by the DeedAdministrators at the Completion Date, after payment of theirreasonable fees and expenses;
ii. any other funds paid into the DOCA Fund under the DOCA; andiii. the Proponents Contribution of $1,500,000 which is to be paid within 6
months from execution of the DOCA; oriv. subject to the satisfaction of the conditions listed in sub-clause 12.c,if
the Proponents fail to cause the Proponents' Contribution to be paid ifrequired under clause 10, the proceeds of sale of the property subjectto the Conditional Mortgage.
b. Upon receipt of those funds, the Deed Administrators will pay the DOCA Fund:i. firstly in payment of the Deed Administrators reasonable fees and
expenses incurred in administering the DOCA; andii. then to the Deed Creditors in shares equivalent to the respective
dividends they would receive on a winding up, were that trust funddivided between the Administered Companies in liquidation pro ratato the total proven debts of Deed Creditors accepted by the DeedAdministrators.
20. Upon satisfaction of the conditions precedent to the Conditional Mortgage theAdministered Companies will be released to the control of the Proponents asdirectors of those companies.
21. The Deed Creditors' provable claims against the Administered Companies arisingprior to the appointment of the Administrators to those Companies will be subject to amoratorium during the term of the DOCA and compromised under the DOCA bypayment to the Deed Creditors of their entitlement under the DOCA and shall uponthat compromise arise solely under the DOCA.
22. The rights of creditors related to the Proponents arising against the AdministeredCompanies arising prior to the administration shall not be compromised by the DOCAand shall survive the administration of the Administered Companies, provided that
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there shall be a moratorium on enforcement of those rights during the term of theDOCA.
23. The Proponents may:
a. cause any Deed Creditors of any Administered Company to be paid in full; orb. negotiate with any Deed Creditors of any Administered Company the written
release of their entire entitlement in the Deed Fund,prior to payment of those creditors from the Deed Funds and upon provision ofevidence of such payment to the reasonable satisfaction of the Deed Administratorsof such payment or release, those Deed Creditors who have been so paid or haveprovided such a release shall have no further claim under the DOCA Fund.
24. Where all of the Deed Creditors of an Administered Company are paid in full orprovide releases as contemplated in clause 23, the Deed Administrators shall releasethat company from Administration and confirm the effectuation of the DOCA inrespect of that company.
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Remuneration Request Approval Report Page 1 of 20
Part 1: Declaration
We, Shaun McKinnon and Michael Gerard McCann, of Grant Thornton Australia Limited have undertaken a proper assessment of this remuneration claim for our appointment as Grant Thornton Australia Limited, of Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed), in accordance with the law and applicable professional standards. We are satisfied that the remuneration claimed is in respect of necessary work, properly performed, or to be properly performed, in the conduct of the Administration.
Part 2: Executive Summary To date, the following Administrators’ remuneration has been approved: (a) For the period 12 August 2013 to 4 September 2013 in the amount of $12,897.00 (excluding GST); and (b) For the period 5 September 2013 to 30 September 2013 in the amount of $9,401.00 (excluding GST). No remuneration approved by creditors has been drawn as at the date of this report.
Less: Fees previously approved: 05/09/2013 – 30/09/2013 ($9,401.00) Total Resolution 1 $8,895.00 Liquidation (if applicable) Resolution 2a: Commencement of liquidation to finalisation* Section 5 $7,500.00
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Period Report Reference
Amount (ex GST)
Voluntary Administration (if a Deed is approved by creditors) (if applicable)
Resolution 2b: From meeting of creditors to execution of the Deed*
Section 5 $3,200.00
Deed (if approved) (if applicable) Resolution 3: For the period of the Deed of Company Arrangement to its effectuation*
Section 5 $7,500.00
* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of the administration. Should additional work be necessary beyond what is contemplated, further approval may be sought from creditors. Please refer to report section references detailed above and on the previous page for full details of the calculation and composition of the remuneration approval sought. The remuneration for the period 17 September 2013 to 30 September 2013 was more than the estimate of costs provided in the previous report to creditors of $2,500.00. This increase of $2,595.00 is attributable to additional time spent dealing with the following:
- Preparing reports to creditors;
- Investigations into the proposed establishment of a creditors trust including the regulatory guide for Administrators issued by the Australian Securities and Investments Commission. Refer Regulatory Guide 82 a copy of which can be obtained from the following web address: http://www.asic.gov.au/asic/pdflib.nsf/lookupbyfilename/creditors_trusts_guide.pdf/$file/creditors_trusts_guide.pdf
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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- Liaising with the Directors (and their representatives) along with the Administrators legal representatives in respect to the proposed Deed/creditors trust; and
- Preparing for the second meeting of creditors.
Please note that the additional remuneration being sought has been decreased from $2,595.00 to $95.00 as the Administrators have agreed to discount their remuneration for this period by $2,500.00.
Part 3: Description of work completed and to be completed
Resolution 1
“The remuneration of the Administrators, their partners and staff, incurred in relation to the Administration of Uscon Pty Ltd for the period 5 September to 30 September 2013, not previously approved, and for the period 1 October 2013 to 21 October 2013, be hereby calculated on a time basis and by reference to the hourly rates of Grant Thornton – Recovery & Reorganisation Services (plus GST). Such remuneration is to be capped at $8,895.00 plus GST and should be drawn to the extent of available funds.”
Company Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Practitioner(s) Shaun McKinnon and Michael Gerard McCann Firm Grant Thornton Australia Limited
Administration Type Voluntary Administration
Period From 05/09/2013 To 30/09/2013
Task Area General Description Includes
Creditors (25.30 hours) ($9,098.50)
Creditor Enquiries Receive and follow up creditor enquiries via telephone
Maintaining creditor enquiry register
Review and prepare correspondence to creditors and their representatives via facsimile, email and post
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Task Area General Description Includes
Secured creditor reporting
Preparing updates to secured creditor
Responding to secured creditor’s queries
Dealing with proofs of debt
Receipting and filing Proofs of Debt when not related to a dividend
Meeting of Creditors Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting
Administration (5.2 hours) ($2,117.50)
Correspondence
Document maintenance/file review/checklist
Filing of documents
Updating checklists
Planning/Review Discussions regarding status of administration
Investigations (0.1 hours) ($23.00)
Conducting investigation
Preparation of comparative financial statements
Assets (1.6 hours) ($584.00)
Forecasting Prepare cash flow forecast
Statutory (0.8 hours) ($173.00)
ASIC Forms Preparing and lodging ASIC forms
Correspondence with ASIC regarding statutory forms
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Company Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Practitioner(s) Shaun McKinnon and Michael Gerard McCann Firm Grant Thornton Australia Limited
Administration Type Voluntary Administration
Period From 01/10/2013 To 21/10/2013
Task Area General Description Includes
Creditors ($6,300.00)
Creditor Enquiries Receive and follow up creditor enquiries via telephone
Maintaining creditor enquiry register
Review and prepare correspondence to creditors and their representatives via facsimile, email and post
Secured creditor reporting
Preparing updates to secured creditor
Responding to secured creditor’s queries
Dealing with proofs of debt
Receipting and filing Proofs of Debt when not related to a dividend
Meeting of Creditors Preparation of circular to creditors to advise of adjourned meeting of creditors
Consider the Deed of Company Arrangement proposed
Preparation of adjourned meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting
Employees ($500.00)
Employees enquiry Receive and follow up employee enquiries via telephone
Maintain employee enquiry register
Review and prepare correspondence to creditors and their representatives via facsimile, email and post
Calculation of Calculating employee entitlements
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Task Area General Description Includes
entitlements Reviewing employee files and company’s books and records
Reconciling superannuation accounts
Reviewing awards
Administration ($1,000.00)
Correspondence
Document maintenance/file review/checklist
Filing of documents
Updating checklists
ASIC Form 524 and other forms
Preparing and lodging ASIC forms including 505, 524, 911 etc
Correspondence with ASIC regarding statutory forms
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Part 4: Calculation of Remuneration Please find attached a calculation of remuneration by staff and task area. Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Part 4 Calculation of remuneration by staff and task area - 5 September 2013 to 30 September 2013
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Part 5: Description of work from the commencement of liquidation to finalisation
Resolution 2a
“That should the Company be wound up, that the remuneration of the Liquidators, their partners and staff for work carried out in relation to Uscon Pty Ltd be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $7,500.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service.”
Company Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Practitioner(s) Shaun McKinnon and Michael Gerard McCann Firm Grant Thornton Australia Limited
Administration Type Voluntary Administration
Period From 21/10/2013 To Finalisation
Task Area General Description Includes
Creditors ($1,500.00)
Creditor Enquiries Receive and follow up creditor enquiries via telephone
Maintaining creditor enquiry register
Review and prepare correspondence to creditors and their representatives via facsimile, email and post
Correspondence with committee of inspection members if appointed
Secured creditor reporting
Preparing updates to secured creditor
Responding to secured creditor’s queries
Creditor reports Preparing reports to creditors
Dealing with proofs of debt
Receipting and filing Proofs of Debt when not related to a dividend
Corresponding with OSR and ATO regarding Proofs of Debt when not related to a dividend
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Task Area General Description Includes
Final Meeting of Creditors
Preparation meeting notices, proxies and advertisements
Forward notice of meeting to all known creditors
Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting.
Preparation and lodgement minutes of meetings with ASIC
Responding to stakeholder queries and questions immediately following meeting
Employees ($2,000.00)
Employees enquiry
Receive and follow up employee enquiries via telephone
Maintain employee enquiry register
Review and prepare correspondence to creditors and their representatives via facsimile, email and post
Preparation of letters to employees advising of their entitlements and options available
Receive and prepare correspondence in response to employees objections to leave entitlements
FEG Correspondence with DEEWR in respect to FEG
Preparing notification spreadsheet
Preparing DEEWR quotations
Preparing DEEWR distributions
Calculation of entitlements
Calculating employee entitlements
Reviewing employee files and company’s books and records
Reconciling superannuation accounts
Reviewing awards
Employee dividend Correspondence with employees regarding dividend
Correspondence with ATO regarding SGC proof of debt
Calculating dividend rate
Preparing dividend file
Advertising dividend notice
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Task Area General Description Includes
Preparing distribution
Receipting Proofs of Debt
Adjudicating Proofs of Debt
Ensuring PAYG is remitted to ATO
Investigation ($1,000.00)
Conducting investigation
Reviewing company’s books and records
Review of specific transactions and liaising with Directors regarding certain transactions
Liaising with Directors regarding certain transactions
Preparation of investigation file
Lodgement of investigation with the ASIC
Preparation and lodgement of supplementary report if required
Litigation / Recoveries (if applicable)
Internal meetings to discuss status of litigation
Preparing brief to solicitors
Liaising with solicitors regarding recovery actions
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Remuneration Request Approval Report Page 13 of 20
Part 6: Description of work from the meeting of creditors to execution of the Deed
Resolution 2b
“That should the Company’s creditors vote in favour of a Deed of Company Arrangement, that the remuneration of the Administrators, their partners and staff for work carried out in relation to Uscon Pty Ltd for the period 22 October 2013 to 11 November 2013, being the period to execution of the Deed, be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $3,200.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service.”
Company Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Practitioner(s) Shaun McKinnon and Michael Gerard McCann Firm Grant Thornton Australia Limited
Administration Type Voluntary Administration
Period From 22/10/2013 To 11/11/2013
Task Area General Description Includes
Creditors ($1,000.00)
Creditor Enquiries Receive and follow up creditor enquiries via telephone
Maintaining creditor enquiry register
Review and prepare correspondence to creditors and their representatives via facsimile, email and post
Correspondence with committee of inspection members if appointed
Secured creditor reporting
Preparing updates to secured creditor
Responding to secured creditor’s queries
Creditor reports Preparing reports to creditors
Dealing with proofs of Receipting and filing Proofs of Debt when not related to a dividend
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Remuneration Request Approval Report Page 14 of 20
Task Area General Description Includes
debt Corresponding with OSR and ATO regarding Proofs of Debt when not related to a dividend
Employees ($500.00)
Employees enquiry
Receive and follow up employee enquiries via telephone
Maintain employee enquiry register
Review and prepare correspondence to creditors and their representatives via facsimile, email and post
Administration ($500.00)
Correspondence
Document maintenance/file review/checklist
Filing of documents
Updating checklists
Bank account administration
Bank account reconciliations
Correspondence with bank regarding specific transfers
Planning/Review Discussions regarding status of administration
Statutory ($1,200.00)
Deed of Company Arrangement
Various correspondence to stakeholders and solicitors relating to the Deed preparation
Review of draft Deed
Execution of Deed
Compliance monitoring of the requirements of the Deed
ATO & other statutory reporting
Preparing BAS’
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Part 7: Description of work for the period of the Deed of Company Arrangement to Effectuation of the Deed
Resolution 3
“That the remuneration of the Deed Administrators, their partners and staff for work carried out in relation to Uscon Pty Ltd for the period 12 November 2013 to the effectuation of the Deed, be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $7,500.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service.”
Company Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Practitioner(s) Shaun McKinnon and Michael Gerard McCann Firm Grant Thornton Australia Limited
Administration Type Deed of Company Arrangement
Period From 12/11/2013 To Effectuation of the Deed
Task Area General Description Includes
Creditors ($1,000.00)
Creditor Enquiries Receive and follow up creditor enquiries via telephone
Secured creditor reporting
Preparing updates to secured creditor
Responding to secured creditor’s queries
Creditor reports Preparing reports to creditors
Employees ($500.00)
Employees enquiry
Receive and follow up employee enquiries via telephone
Maintain employee enquiry register
Review and prepare correspondence to creditors and their representatives via facsimile, email and post Statutory ($2,000.00)
Deed of Company Arrangement
Various correspondence to stakeholders and solicitors relating to the monitoring of the Deed terms
Filing of Deed with ASIC
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Task Area General Description Includes
Compliance monitoring of the requirements of the Deed
Any other tasks associated with the Deed including its finalisation
ATO & other statutory reporting
Preparing BAS’
Dividend ($4,000.00)
Processing proofs of debt (if applicable)
Preparation of correspondence to potential creditors inviting lodgement of Proofs of Debt
Receipt of Proofs of Debt
Maintain Proofs of Debt register
Adjudicating Proofs of Debt
Request further information from claimants regarding Proofs of Debt
Preparation of correspondence to claimant advising outcome of adjudication
Dividend procedures (if applicable)
Preparation of correspondence to creditors advising of intention to declare dividend
Advertisement of intention to declare dividend
Obtain clearance from ATO to allow distribution of Company’s assets
Preparation of dividend calculation
Preparation of correspondence to creditors announcing declaration of dividend
Advertise announcement of dividend
Preparation of distribution
Preparation of dividend file
Preparation of payment vouchers to pay dividend
Preparation of correspondence to creditors enclosing payment of dividend
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Remuneration Request Approval Report Page 17 of 20
Part 8: Schedule of remuneration methods and hourly rates
Remuneration Methods
There are four basic methods that can be used to calculate the remuneration charged by an Insolvency Practitioner. They are:
a. Time based / hourly rates This is the most common method. The total fee charged is based on the hourly rate charged for each person who carried out the work multiplied by the number of hours spent by each person on each of the tasks performed.
b. Fixed Fee The total fee charged is normally quoted at the commencement of the administration and is the total cost for the administration. Sometimes a Practitioner will finalise an administration for a fixed fee.
c. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets realisations.
d. Contingency The practitioner’s fee is structured to be contingent on a particular outcome being achieved.
Method chosen
Given the nature of this administration we propose that our remuneration be calculated on a time based / hourly rated basis. This is because:
• It ensures that creditors are only charged for work that is performed. Our time is recorded and charged in six minute increments.
• We will be required to perform a number of tasks that do not specifically relate to asset realisation.
Explanation of Hourly Rates
The rates for our remuneration calculation are set out in the attached table together with a general guide showing the qualifications and experience of staff engaged in the administration and the role they take in the administration. The hourly rates charged encompass the total cost of providing professional services and should not be compared to an hourly wage. Refer Appendix C.
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Remuneration Request Approval Report Page 18 of 20
Part 9: Statement of Remuneration Claim Resolution 1 “The remuneration of the Administrators, their partners and staff, incurred in relation to the Administration of Uscon Pty Ltd for the period 5 September to 30 September 2013, not previously approved, and for the period 1 October 2013 to 21 October 2013, be hereby calculated on a time basis and by reference to the hourly rates of Grant Thornton – Recovery & Reorganisation Services (plus GST). Such remuneration is to be capped at $8,895.00 plus GST and should be drawn to the extent of available funds.” Resolution 2 (whichever is applicable) (a) Description of work from the commencement of liquidation to finalisation “That should the Company be wound up, that the remuneration of the Liquidators, their partners and staff for work carried out in relation to Uscon Pty Ltd be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $7,500.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service.” (b) Description of work from the meeting of creditors to execution of the Deed “That should the Company’s creditors vote in favour of a Deed of Company Arrangement, that the remuneration of the Administrators, their partners and staff for work carried out in relation to Uscon Pty Ltd for the period 22 October 2013 to 11 November 2013, being the period to execution of the Deed, be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $3,200.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service.”
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
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Resolution 3 (if applicable) Description of work from execution of the Deed to Effectuation of the Deed
“That the remuneration of the Deed Administrators, their partners and staff for work carried out in relation to Uscon Pty Ltd for the period 12 November 2013 to the effectuation of the Deed, be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $7,500.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service.” Part 10: Disbursements Disbursements are divided into three types: A, B1, B2.
A disbursements are all externally provided professional services. These are recovered at cost. An example of an A disbursement is legal fees.
B1 disbursements are externally provided non-professional costs such as travel, accommodation and search fees. B1 disbursements are recovered at cost.
B2 disbursements are internally provided non-professional costs such as photocopying, printing and postage. B2 disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs.
I have undertaken a proper assessment of disbursements claimed for the Company, in accordance with the law and applicable professional standards. I am satisfied that the disbursements claimed are necessary and proper.
All disbursements are claimed at cost except for faxing which is charged as follows:
- Local - $1 per page
- National - $2 per page
Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)
Remuneration Request Approval Report Page 20 of 20
- International - $3 per page.
Creditors have the right to question the incurring of disbursements and can challenge disbursements in court.
Part 11: Report on Progress of the Administration Please refer to the attached report and the report to creditors dated 16 September 2013 for an update on the progress of the Administration.
Part 12: Queries Arrangements can be made to inspect the time and costs records which give greater detail of the work performed by contacting Lyle Fernandes of this office on (07) 3222 0394. We would appreciate it if this could be done no later than 2:00pm on Friday, 18 October 2013 to allow sufficient time for a review of the information.
Part 13: Information Sheet
The ASIC Creditors Information Sheet (INFO 85) that outlines further information regarding the remuneration approval and payment process can be obtained from the following web address: www.asic.gov.au/insolvencyinfosheets.
(RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 058 849 479
I/We (Note 1)________________________________________________________________ (name of creditor)
Of________________________________________________________________________ address of creditor)
A creditor of Uscon Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) hereby appoint:
_______________________________________________________________________(name of proxy)(Note 2)
Of__________________________________________________________________________(address of proxy)
Or in his absence,_____________________________________________________(name of alternative proxy)
Of_________________________________________________________________(address of alternative proxy)
As my/our special/general (Note 3) proxy to vote at the concurrent meeting of creditors to be held in the above matter on 21 October 2013 or at any adjournment thereof. If special proxy please select ONE of
the following:
To vote specifically in the following manner: FOR AGAINST ABSTAIN
1. The remuneration of the Administrators, their partners and staff, incurred in relation to the Administration of Uscon Pty Ltd for the period 5 September 2013 to 30 September 2013, not previously approved, and for the period 1 October 2013 to 21 October 2013, be hereby calculated on a time basis and by reference to the hourly rates of Grant Thornton – Recovery & Reorganisation Services (plus GST). Such remuneration is to be capped at $8,895.00 plus GST and should be drawn to the extent of available funds.
2. That should the Company’s creditors vote in favour of a Deed of
Company Arrangement that the remuneration of the Administrators, their partners and staff for work carried out in relation Uscon Pty Ltd for the period 22 October 2013 to 11 November 2013, being the period prior to execution of the Deed be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $3,200.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service.
3. Please choose one of the below
a) That the Company execute a Deed of Company Arrangement; OR
b) That the Company be Wound Up; OR
c) That the Voluntary Administration should end.
FOR AGAINST ABSTAIN
4. Please choose one of the below a) That should the Company execute a Deed of Company
Arrangement, that the Committee of Inspection be appointed; OR
b) That should the Company be wound up, that a Committee of Inspection be appointed.
5. Please choose one of the below
a) That should the Company be wound up, that the remuneration of the Liquidators, their partners and staff for work carried out in relation to Uscon Pty Ltd be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $7,500.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service; OR
b) That the remuneration of the Deed Administrators, their partners and staff for work carried out in relation to Uscon Pty Ltd for the period 12 November 2013 to the effectuation of the DOCA, be hereby calculated by reference to the current and future hourly rates of Grant Thornton – Recovery and Reorganisation Services. Such remuneration is to be capped at $7,500.00 excluding GST and disbursements, and should be drawn to the extent of available funds. In respect to remuneration calculated by reference to future hourly rates, any increase to hourly rates charged will not exceed 10% of the current hourly rates of Grant Thornton – Recovery and Reorganisation Service.
6. That should the Company be wound up, the Liquidator be authorised
to destroy the books and records of the Company six months after the date of its deregistration, subject to consent of the Regional Commissioner of the Australian Securities and Investments Commission in accordance with Section 542(4) of the Corporations Act 2001.
DATED this day of 2013 Signature ___________________________(Note 4)
CERTIFICATE OF WITNESS (NOTE 5)
I, of , certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxy and read to him before he attached his signature or mark to the instrument. DATED this day of 2013 Signature of Witness____________________________ Description ___________________________________ Place of Residence ______________________________ NOTE: 1. If a firm, strike our “I” and set out the full name of the firm. 2. Insert the name, address and description of the person appointed. 3. If a special proxy add the words “to vote for” or the words “to vote against” and specify the particular resolution. 4. The signature of the creditor, contributory, debenture holder or member must not be attested by the person nominated as proxy. 5. This certificate is to be completed only where the person giving the proxy is blind or incapable of writing.