Restructuring and Insolvency

Multiple confidential matters arising from turmoil in global debt markets: Since August 2007 our restructuring and insolvency practice has experienced a surge in the flow of significant and complex matters, all of which can be traced to the sub-prime meltdown. These matters relate, amongst others, to Centro Property Group, Allco Finance Group, RAMS Home Loans Group and other providers of property and auto finance through securitisation structures.

Lehman Brothers: Advising the administrators dealing with the assets and liabilities of this investment bank.

Discount variety retail group: Advising the receivers and managers of a discount variety retail group with more than 350 stores and 2,500 employees across all mainland states of Australia.

Storm Financial Limited: Representing Korda Mentha as Receivers and Managers of Storm Financial Limited (Administrators Appointed) (Receivers and Managers Appointed) and other companies within the Storm group. Our role includes advising the Receivers and Managers in relation to the realisation of the assets of Storm Financial Limited.

Westpoint: One of the biggest events in corporate Australia in 2006 was the collapse of Westpoint. This event has received international commentary and, more importantly, an almost continual scrutiny by media, parliamentarians, investors and others affected by the collapse.

In a truly national effort, partners in Perth, Sydney and Melbourne represent the liquidators of certain companies in the Westpoint Group, an insolvent property development managed investment scheme and trust arrangement conglomerate with projects based in Brisbane, Sydney, Melbourne, Perth and elsewhere, partly financed via mezzanine finance from the public. The liquidators are presently appointed to 16 companies, though the broader group encompasses over 150 corporate entities and various trusts.

Creditors are estimated to be owed up to $600 million by the companies operating the schemes.

With a document library thought to encompass three million documents, multiple ASIC actions and actions by receivers and other liquidators, matters are still evolving but are likely to include winding up, restructuring, unravelling and investigations into and possible proceedings against the operators of the schemes and the complex web of companies and transactions involved in the schemes. Media has also speculated actions against auditors, lawyers and financial planners.

Ajax Fasteners: The Clayton Utz team was called on by the voluntary administrators appointed to the car parts manufacturer Global Engineered Fasteners Pty Ltd (known as "Ajax Fasteners") to help negotiate a rescue package with the key automotive customers of the business and to assist in negotiations with the first ranking secured creditor in relation to the continued operation of the company during the voluntary administration.

This task had potential far-reaching implications as making each of the agreements was pivotal to the continued operation of the company and, therefore, the automotive supply chain in Australia and some parts of Asia and the United States. The agreements ultimately struck ensured the ongoing employment of approximately 10,000 automotive employees.

The role of Clayton Utz extended beyond the primary role, of acting for and seeking to protect the interests of the administrators, to facilitating agreement in the shortest possible period of time amongst the other parties who came to the negotiating table with divergent legal and commercial interests.

Following the appointment of receivers and managers by the second ranking secured creditor, the agreement with the key automotive customers came to an end and Clayton Utz assisted the administrators with the sale of the business and issues arising from the subsequent liquidation of the company

Retravision: Retravision was a state-based purchasing entity of electrical items and whitegoods for retail sale. Its shareholders owned and operated Retravision retail outlets in New South Wales and the Australian Capital Territory. Until the appointment of the voluntary administrators, Retravision controlled approximately 26 percent of the NSW and ACT electrical and whitegoods market. Retravision's annual revenue exceeded $300 million per annum.

We originally acted for the voluntary administrators and now act for the deed administrators of Retravision (NSW) Limited ("Retravision").

In acting for the administrators our team proposed various solutions which ultimately saw Retravision enter into a deed of company arrangement. The deed was approved by creditors and resulted in a win/win/win situation for the secured creditors, unsecured creditors and Retravision's former retailers. The deed ensures that Retravision's former retailers become affiliated to other state based Retravision buying groups and all purchases made though those buying groups by Retravision's former retailers result in a commission paid to Retravision for a period of three years.

This creative solution will result in all secured creditors being paid 100 cents in the dollar and all unsecured creditors achieving a return of approximately 20 cents in the dollar. Importantly, Retravision's former retailers will continue to operate their businesses under the Retravision brand.