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Grant Thornton Australia Limited Level 17 383 Kent Street Sydney NSW 2000 T +61 2 8297 2400
ABN-41 127 556 389 ACN-127 556 389
Grant Thornton Australia Ltd ABN 41 127 556 389 ACN 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation.
www.grantthornton.com.au
ALL CREDITORS AS ADDRESSED
3 August 2020
Dear Sir / Madam
Orient House Investments Pty. Limited (Administrators Appointed)
ACN 100 192 989 (“the Company”)
I refer to the Administrators’ Report dated 29 May 2020 (“Administrators’ Report”) and Second Meeting
of Creditors on 9 June 2020 wherein we recommended, and creditors voted to accept, that the second
meeting be adjourned for a maximum of 45 business days.
The adjournment was recommended for the following reasons:
1. A dividend of 100c in the dollar to creditors being contingent on recovery of AUD$13 million
commission from American Precious Metals Refining Inc. (“APMR”) and that additional time
was required to investigate the status and collectability of this amount;
2. The option to wind-up the Company remained available to creditors at the reconvened Second
Meeting;
3. The Administrators’ powers of investigation and sale remain for the entirety of the voluntary
administration and that the Administrators would continue to take steps to collect all relevant
information to be able to realise the Company’s share and unit holdings during the adjournment
period; and
4. Should the Administrators have determined the 45 business day adjournment was no longer
warranted, they could reconvene the second meeting at any time.
The purpose of this short report is to provide creditors with sufficient information to make an informed
decision about the future of the Company. The report includes:
An update on the findings from our continued investigations;
Details of the proposed Deed of Company Arrangement; and
The options available to creditors and our opinion on what is in creditors’ best interest.
Notice of the reconvened second meeting is attached as Appendix A.
Independence
As disclosed in our Initial Notification to Creditors dated 6 May 2020, we undertook a proper assessment
of the risks in relation to our independence prior to accepting the appointment. Our assessment
identified no real or potential risk to our independence. We confirm that there have not been changes to
© 2019 Grant Thornton Australia Limited. 2
our Declaration of Independence, Relevant Relationships or Indemnities since the Initial Notification to
Creditors.
Reconvened Second Meeting
The reconvened Second Meeting of Creditors will be held via teleconference facilities on Tuesday, 11
August 2020 at 11.00am. Due to the current COVID-19 restrictions, no physical meeting location will be
provided to creditors.
At the reconvened Second Meeting of Creditors, creditors will amongst other things be able to vote on
the Company’s future and to resolve either that:
a. The Company execute a Deed of Company Arrangement;
b. The administration should end; or
c. The Company be wound up.
Attached as Appendix A is formal notice of the meeting.
Proxy forms and Proof of Debts for the meeting are attached as Appendix B and C, respectively. New
Proxy forms are required for the meeting. However, if creditors have already submitted their Proof of
Debt to our office there is no need to submit again.
Administrators’ Report / Update to creditors
There has been no material changes to the Administrators’ Report since it was issued in May 2020,
including any investigation findings. We have provided an update to creditors below.
1. AUD$13 Million Commission
In the Administrators’ Report we reported that the Company acted as an intermediary for a US based
entity, APMR, in respect of a gold bullion trade in January 2020. The Company’s director advised the
Company was due to receive AUD$13 million commission from the trade. We also reported that the
Company’s director expected the commission would be released to the Company by the end of July
2020. At the date of this report, this has not occurred.
The steps required to release the commission to the Company included The High Court for the State of
Telangana, Hyderabad, India stamping the “proof of claim” and once stamped by the Court, approval of
the Reserve Bank of India is required. The most recent update received from the Company’s director is
that the proof of claim is still with the Court for approval and that there had been a delay due to COVID-
19. The Company’s director advised it was expected that the Court would action the proof of claim prior
to 31 July 2020. We have not received any evidence to confirm this has occurred. The Company’s
director also advised that payment in full of the commission into the Company’s bank account (which we
control) is expected by the end of August 2020. No documentation or evidence to support these
statements has been provided despite us requesting same.
In our Administrators’ Report, we also reported that we had put APMR and its director, Mr. Felix Negron,
on notice of our appointment and that the transfer of the commission must be to a bank account the
Administrators control. Despite numerous requests made by this office, Mr. Negron has not been
available for regular weekly update calls. The Company’s director has also failed to respond to written
requests for an update on the status of the commission payment, in breach of his duties as a director of
the Company.
During the course of the voluntary administration, we have continued to communicate with Mr. Negron in
writing requesting an update and asserting the Company’s interest in the commission. Responses from
Mr. Negron have been limited.
At the date of this report, we have not been able to obtain sufficient comfort supported by documentary
evidence from either the Company’s director or Mr. Negron that the commission will be received by 31
August 2020, if at all.
© 2019 Grant Thornton Australia Limited. 3
A further update will be provided at the reconvened Second Meeting of Creditors.
2. Other Assets
In our Administrators’ Report, we reported that the Company has a shareholding/unit entitlement in
various entities. During the course of the voluntary administration we have continued to issue
correspondence to the related and third parties in which the Company holds an interest. Noted below is
an update:
SCM ARIE Fund: We have received an investor statement from Strategic Capital Management
Limited (“SCML”) which as at 31 March 2020, valued the Company shareholding in the SCM ARIE
Fund at c. $1.01 million.
In our Administrators Report, we reported that we had received an investor statement from SCML,
which as at January 2020 valued the Company's unit holding at c. $3.15 million. SCML has advised
that the decline in value of c. $2.14 million was largely attributed to the fund’s investment in Netlinkz
which received a qualified audit opinion with an emphasis of matter due to a material uncertainty in
relation to it continuing to operate as a going concern.
Since February 2020, Netlinkz has entered into numerous trading halts and suspensions from
official quotations. On 31 July 2020, Netlinkz announced that subject to the approval of existing
shareholders it intends to raise up to $18 million through the issue of convertible notes to be used to
payout existing loans and to continue to grow sales in China, relying on its existing infrastructure
and targeting multiple growth opportunities in other regions, such as Japan.
In light of the above, it would appear that a hold strategy be adopted over the coming weeks/
months until a further announcement is made regarding funding.
SCML has advised that an updated investor statement for the quarter ended 30 June 2020 will be
issued shortly. We will disclose the details at the reconvened second meeting if available, together
with an update on the value of the Company’s interest.
NuBlend Pty Ltd: Despite issuing several rounds of formal correspondence to the directors of
NuBlend Pty Ltd (“NuBlend”) seeking financial information to be able to determine the value of the
Company’s interest, we are yet to receive a response. We note the Company’s director is also a
director of this entity.
If creditors resolve to place the Company into liquidation at the reconvened second meeting, we will
continue to pursue NuBlend, which will likely involve us engaging a solicitor to represent us.
The present value of the Company’s interest in this entity is not known.
Imprezario: This entity is based in the United States of America. Despite issuing several rounds of
formal correspondence to the directors of Imprezario seeking financial information to be able to
determine the value of the Company’s interest, we are yet to receive a response.
If creditors resolve to place the Company into liquidation at the reconvened second meeting, we will
continue to pursue Imprezario, which will likely involve us engaging a solicitor to represent us.
The present value of the Company’s interest in this entity is not known.
Turner Investments: We have been advised that Turner Investments LP has been deregistered
with the U.S. Security and Exchange Commission. We await documentation to confirm this.
The value of the Company’s interest in this entity is considered to be nil (i.e. no value).
Grapple: As detailed in the Administrators’ Report, the shares are held by the director in his own
personal capacity. The director has advised that this was an error. However, to date, Grapple has
not provided us with a response to our queries or advised how we can rectify the error.
If creditors resolve to place the Company into liquidation at the reconvened second meeting, we will
continue to pursue Grapple, which will likely involve us engaging a solicitor to represent us.
The present value of the Company’s interest in this entity is not known.
© 2019 Grant Thornton Australia Limited. 4
3. Company books and records / Administrators’ investigations
Despite numerous request and undertakings made by the Company’s director, we are yet to receive any
of the Company’s financial statements by the Company’s director or external accountant (instructed by
the Company’s director to prepare the accounts).
The most recent update provided by the Company’s director was that the external accountant was
unable to complete the preparation of the accounts due to missing Business Activity Statements (BAS)
for 2013.
We do not expect to receive the Company’s financial statements by the time of the reconvened Second
Meeting of Creditors, if at all. Failure to maintain adequate books and records represents a breach of
duties pursuant to Section 286 of the Corporations Act. This breach will be reported to ASIC.
To assist with our investigations, we have requested copies of bank statements for the last 7 years from
the Commonwealth Bank of Australia. Once received, we propose to prepare a summary of the
Company’s source and application of funds to better understand how investor funds have been used
and whether there are any recoveries available to a liquidator if the Company is wound up.
As detailed in the Administrators’ Report, a review of the Company’s bank statements for the 12 months
prior to our appointment disclosed that the Company’s director was using Company funds for personal
living expenses.
Deed of Company Arrangement (“DOCA”)
On 29 July 2020, the Company’s director advised that the terms of the original DOCA were still valid. A
copy is attached at Appendix D. For the same reasons set out in our Administrators Report, we do not
recommend this DOCA to creditors for the following reasons:
1. It does not provide a greater or more certain return to creditors than Liquidation;
2. The Deed Fund is comprised of recovery of the AUD$13 million commission at the exclusion of
the Company’s shareholding in other entities; and
3. There is a stay on creditor action against the Company and Director for 120 days.
On 30 July 2020, the Company’s director provided us with an email for an alternate DOCA on the
following terms:
1. The Company’s director, in his own capacity, to act as an intermediary in a sale and purchase
agreement with a third party for the supply of gold bullion; and
2. Out of the commission payable on the trade payable to the Company’s director in his personal
capacity, AUD$8.33 million be paid into a Deed Fund for the benefit of creditors. The
commission to be received in tranches over a 4 month period and that the Company’s director
be entitled retain $15k per month for living expenses before remitting the balance.
In support of the alternative DOCA, the Company’s director provided us with a copy of a sale agreement.
This agreement is deficient insofar as it has not been signed by the seller and there is no reference to
the payment of a commission to any party. The director advised that an agreement regarding the
payment of a commission would be drawn up in due course.
There are no other terms attached to the alternate DOCA proposal and hence it is not in a form that can
be recommended to the Company’s creditors and hence we do not propose to put the alternative
proposal to creditors at the reconvened second meeting.
Estimated Return to Creditors
In the Administrators’ Report, we estimated that the estimated return to unsecured creditors would be as
follows:
Deed of Company Arrangement: Between Nil and 100 cent in the dollar; and
Liquidation: Between Nil and 100 cent in the dollar.
© 2019 Grant Thornton Australia Limited. 5
We note that the estimated dividend is highly dependent upon the commission being received from
APMR. The estimated dividend range also assumes that all creditor claims are accepted in full and that
the claim by the Hall Park Trust ranks as an unsecured claim.
Although it does not affect the estimated dividend range to unsecured creditors, we note that the
estimated realisable value of the ‘other assets’ in the estimated outcome statement at Appendix E has
changed as a result in the significant decrease in the value of the SCM ARIE units. We now estimate the
following estimated realisable value for ‘other assets’:
o Liquidation ‘High Scenario’: c. $2.4 million
o Liquidation ‘Low Scenario’: c. $509k
Attached as Appendix E is the updated estimated outcome statement.
Voluntary Administrators’ Recommendation
For the following reasons, it is the Administrators’ recommendation that the Company be wound up and
placed into Liquidation at the reconvened second meeting of creditors:
1. The Company is insolvent;
2. The DOCA proposal does not provide a better or more certain return to creditors than
Liquidation. The proposed Deed Fund is comprised of the recovery of the AUD $13 million
commission due to the Company and does not include the realisation of the Company’s interest
in other entities. Further, there is a stay on creditor action against the Company and Director for
120 days; and
3. A Liquidator will further investigate the affairs of the Company and conduct of its director.
Voluntary Administrators / Liquidators Remuneration
At the forthcoming reconvened Second Meeting of Creditors, the Administrators will be seeking approval
for their retrospective and future remuneration as follows:
Attached at Appendix F is a copy of the Administrators’ Remuneration Report for creditors review.
Please do not hesitate to contact Lisa Gibb of my office on +61 2 8297 2411 should you have any
queries regarding the above.
Yours faithfully
John McInerney
Joint and Several Administrator
Overview of Remuneration being sought at Reconveyend second meeting $
Administrators' remuneration for the period from 10 June 2020 to 24 July 2020 13,284
Administrators' remuneration for the period from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting) 6,716
Total Administrators' remuneration (to the date of reconvened Second Meeting) 20,000
Administrators' estimated future remuneration for the period 11 August 2020 to execution of the DOCA (if applicable) 15,000
Administrators' remuneration for the period from commencement of the DOCA to the effectuation of the DOCA (if applicable) 40,000
Liquidators' remuneration for the period from commencement to finalisation of Liquidation (if applicable) 50,000
Appendix A
Insolvency Practice Rules
75-15 - 75-35
Corporations Act 2001
NOTICE OF MEETING OF CREDITORS OF COMPANY
Orient House Investments Pty. Limited (Administrators Appointed)
ACN 100 192 989 (the “Company”)
On 4 May 2020 the Company under section 436A of the Corporations Act 2001 (“the Act”) appointed John
McInerney and Said Jahani of Grant Thornton Australia Limited as Joint and Several Administrators of the
Company.
Notice is given that a reconvened Second Meeting of Creditors of the Company will be held as follows:
Date: 11 August 2020
Time: 11:00AM
Address: By teleconference facilities only
Please contact our office ([email protected]) for teleconference details
Agenda
The purpose of the meeting is to:
Consider the Voluntary Administrators’ report and statement and any other matters raised relating to the
Company’s future and then to resolve either that:
a. The Company execute a Deed of Company Arrangement;
b. The administration should end; or
c. The Company be wound up.
Consider the remuneration and internal disbursements of the Administrators;
If the Company executes a Deed of Company Arrangement:
a. To determine the remuneration and internal disbursements of the Deed Administrators;
If the Company is wound up:
a. To determine the remuneration and internal disbursements of the Liquidators;
b. To consider the appointment of a Committee of Inspection (if appropriate); and
c. To consider authorising the Liquidators to dispose of the books and records of the Company after
finalisation, subject to obtaining ASIC approval (if appropriate).
To discuss any other relevant business which may arise.
Attending and voting at the meeting
Creditors are invited to attend the meeting, however they are not entitled to participate and vote at a meeting
unless:
Proof of debt for voting purposes: They have lodged with the Joint and Several Administrators particulars of
the debt or claim and the claim has been admitted, wholly or in part, by the Joint and Several Administrators. If
a proof of debt for voting purposes has already been lodged, they do not need to do so again. Refer to Note 1
for further guidance on entitlement to vote.
Proxies or attendance: They are either present in person or by electronic facilities or validly represented by
proxy, attorney or an authorised person under s 250D of the Act. If a corporate creditor or represented, a
proxy form, power of attorney or evidence of appointment of a Company representative pursuant to s 250D of
the Act must be validly completed and provided to the Joint and Several Administrators at or before the
meeting.
A proxy is only valid for a particular meeting and will need to be resubmitted even if previously provided.
To enable sufficient time to review, proofs of debt and proxies (or document authorising the representation)
should be submitted to Chloe Lim on [email protected] by 4:00PM on 10 August 2020.
Electronic facilities
Due to both the state and federal government’s warning regarding the COVID-19 pandemic, we will NOT be
offering a location for the meeting for creditors to attend in person. Should creditors wish to attend the first
meeting, creditors will need to contact our office to obtain relevant teleconference details.
To access those facilities, you need to provide a statement by email to Chloe Lim on [email protected], not
later than 1 business day before the meeting which sets out:
Name: The name of the person and of the proxy or attorney (if any)
Address: An address to which notices to the person, proxy or attorney may be sent
Contact: The method of contacting the person, proxy or attorney for the purposes of the meeting.
On receipt of this statement, you will be provided with instructions on how to access the facilities for the meeting.
Any queries should be directed to [email protected] or +61 2 8297 2437.
Dated 3 August 2020
................................
Signature of John McInerney
Joint and Several Administrator
Note 1: Entitlement to vote and completing proofs
IPR (Corp) 75 85 Entitlement to vote at meetings of creditors
(1) A person other than a creditor (or the creditor’s proxy or attorney) is not entitled to vote at a meeting of creditors. (2) Subject to subsections (3), (4) and (5), each creditor is entitled to vote and has one vote. (3) A person is not entitled to vote as a creditor at a meeting of creditors unless:
(a) his or her debt or claim has been admitted wholly or in part by the external administrator; or (b) he or she has lodged, with the person presiding at the meeting, or with the person named in the notice convening
the meeting as the person who may receive particulars of the debt or claim: (i) those particulars; or (ii) if required—a formal proof of the debt or claim.
(4) A creditor must not vote in respect of: (a) an unliquidated debt; or (b) a contingent debt; or (c) an unliquidated or a contingent claim; or (d) a debt the value of which is not established;
unless a just estimate of its value has been made.
(5) A creditor must not vote in respect of a debt or a claim on or secured by a bill of exchange, a promissory note or any other negotiable instrument or security held by the creditor unless he or she is willing to do the following: (a) treat the liability to him or her on the instrument or security of a person covered by subsection (6) as a security in
his or her hands; (b) estimate its value; (c) for the purposes of voting (but not for the purposes of dividend), to deduct it from his or her debt or claim.
(6) A person is covered by this subsection if: (a) the person’s liability is a debt or a claim on, or secured by, a bill of exchange, a promissory note or any other
negotiable instrument or security held by the creditor; and (b) the person is either liable to the Company directly, or may be liable to the Company on the default of another
person with respect to the liability; and (c) the person is not an insolvent under administration or a person against whom a winding up order is in force.
IPR (Corp) 75-110 Voting on resolutions
(1) For the purposes of determining whether a resolution is passed at a meeting of creditors of a Company, the value of a creditor of the Company who: (a) is a related creditor (within the meaning of subsection 75-41(4) of the Insolvency Practice Schedule
(Corporations)), for the purposes of the vote, in relation to the Company; and (b) has been assigned a debt; and (c) is present at the meeting personally, by telephone, by proxy or attorney; and (d) is voting on the resolution;
is to be worked out by taking the value of the assigned debt to be equal to the value of the consideration that the related
creditor gave for the assignment of the debt.
Appendix B
Insolvency Practice Rules, 75-25 Corporations Act 2001
APPOINTMENT OF PROXY
Orient House Investments Pty. Limited (Administrators Appointed)
ACN 100 192 989 (the “Company”)
*I/We ______________________ (name of signatory) of _______ (creditor name)
a creditor of Orient House Investments Pty. Limited appoint ________________________________ (name of proxy)
of ___________________________________________________________________________ (address of proxy)
or in his or her absence ______ (details of alternate proxy)
as *my/*our *general/*special proxy to vote at the meeting of creditors to be held on 11 August 2020 at 11am, or at
any adjournment of that meeting.
If a special proxy, specify how you wish your proxy to vote for each of the resolutions.
Resolutions
For Against Abstain
1. Consider the Voluntary Administrators’ report and statement and any other matters raised relating to the Company’s future and then to resolve either that:
a. The Company execute a Deed of Company Arrangement;
b. The administration should end; or
c. The Company be wound up.
2. “That the remuneration of the Joint and Several Administrators for the period from 10 June 2020 to 24 July 2020, is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $13,284, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”
3. “That the future remuneration of the Joint and Several Administrators for the period from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting), is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $6,716, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”
IF APPLICABLE (DOCA):
4. “That the future remuneration of the Joint and Several Administrators for the period from 11 August 2020 to execution of the DOCA (if applicable), is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest
$10), up to a capped amount of $15,000, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”
IF APPLICABLE (DOCA):
5. “That the future remuneration of the Deed Administrators for the period from
commencement of the DOCA to the effectuation of the DOCA, is determined at a sum equal to the cost of time spent by the Deed Administrators and his partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $40,000, exclusive of GST, and that the Deed Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”
IF APPLICABLE (LIQUIDATION):
6. “That the future remuneration of the Joint and Several Liquidators for the period
from commencement to finalisation of the Liquidation, is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $50,000, exclusive of GST, and that the Joint and Several Liquidators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”
7. If the Company executes a Deed of Company Arrangement, to consider the appointment of a Committee of Inspection.
8. If the Company is wound up, to consider the appointment of a Committee of Inspection.
9. If the Company is wound up, to consider authorising the Liquidators to dispose of the books and records of the Company after finalisation, subject to obtaining ASIC approval.
*I/*We authorise *my/*our proxy to vote as a general proxy on resolutions other than those specified above
(delete if not required)
Signature:
Dated:
*Omit if inapplicable
Appendix C
FORM 535
subregulation 5.6.49(2)
Corporations Act 2001
FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM)
To the Administrators of Orient House Investments Pty. Limited (Administrators Appointed) ACN 100 192
989 (the “Company”)
1. This is to state that the Company was on 4 May 2020, and still is, justly and truly indebted to:
full name, ABN and address of the
creditor and, if applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a description of the
occupation of the creditor) for dollars and cents
Particulars of the debt are:
Date Consideration Amount Remarks (state how the debt arose) $ (include details of voucher substantiating payment)
2. To my knowledge or belief the creditor has not, nor has any person by the creditor’s order, had or received
any satisfaction or security for the sum or any part of it except for the following:
(insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills
or other negotiable securities are held, show them in a schedule in the following form).
Date Drawer Acceptor Amount Due Date $
3. Signed by (select option):
󠆤 I am the creditor personally.
󠆤 I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied.
󠆤 I am the creditor’s agent authorised in writing to make this statement in writing. I know the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied.
Signature: Dated:
Name: Occupation:
Address:
RECEIVE REPORTS BY EMAIL Yes No
Do you wish to receive all future reports and correspondence from our office via email?
Email……………………………………………………………………………
Appendix D
{KVM\S1968829:1}
PROPOSAL FOR DEED OF COMPANY ARRANGEMENT
29 May 2020
PARTIES
Proponent 1. This proposal is made by Anthony Hartman as Director for Orient House Investments Pty Ltd ACN 100 192 989 (the Company).
Company 2. This proposal is made in relation to Orient House Investments Pty Ltd ACN 100 192 989.
Deed Administrators 3. The Administrators of the proposed Deed of Company Arrangement (DOCA) will be the administrators John McInerney and Said Jahani.
PURPOSE
Purpose and Objective 4. The purpose of this proposal is to provide for the following outcomes:
(a) Maximising the prospects of the Company, or as much as possible of its business, continuing in existence; and
(b) To increase the return to Creditors.
OUTLINE
Stage 1 - setup 5. Prior to 5 June 2020, the Proponent is to pay $50,000.00 into the Grant Thornton, Sydney trust account as security for the proposal. If the proposal is not approved by resolution of the meeting of creditors, the said sum is to be returned to the Proponent, less the aggregate amount of properly incurred expenses of the Administrators and remuneration of the Administrators fixed by creditors or otherwise by law. If the proposal is approved, the sum of $50,000 will be dealt with in accordance with paragraph 6 (b) below.
6. Upon execution of the DOCA: (a) Any monies held by the Administrators will be
transferred into the Deed Fund.
(b) The sum of $50,000.00 referred to in paragraph 5 (Irrevocable Payment) shall be released irrevocably into the Deed Fund.
7. Within 80 days after the execution of the DOCA, the Company anticipates recovering $US9,000,000.00 subject to currency fluctuation) as commission from American Precious Metals Refineries Inc. Of that amount, the Proponent will ensure that:
{KVM\S1968829:1}
2
(a) secured creditor claims of Turner and Hall are
satisfied;
(b) $AUD6,000,000.00 is paid to the Deed Fund for distribution in accordance with this proposal. Any resultant balance will be paid to the Company.
8. Control of the Company will revert to the Directors upon
execution of the DOCA.
Stage 2 9. The Deed Administrators will control and distribute the
Deed Fund in accordance with the priorities set out in section 556(1) of the Corporations Act 2001 (Cth) in satisfaction of:
i. Properly incurred expenses of the
Administrators; ii. Remuneration of the Administrators fixed by
resolution of creditors or otherwise by law; iii. Properly incurred expenses of the Deed
Administrators; iv. Remuneration of the Deed Administrators
fixed by resolution of creditors or otherwise by law; and
v. A claim of a priority, statutory and other class of creditor whose claim is admitted to proof in the Deed Fund
Any balance available after all such admitted claims are satisfied in full with interest upon such amounts, is to be paid to the Company.
10. Subject to paragraph 11 below, the claims of all pre-appointment unsecured creditors will be extinguished if admitted to proof or if within the prescribed time the claim of any such creditor entitled to prove in the Deed is not submitted to proof in the Deed.
11. The Proponent will not participate in the Deed Fund. In that regard, the claim of the Proponent will be preserved but subordinated to the claims of other creditors.
12. The DOCA will be effectuated upon distribution of the Deed Fund in manner specified above.
13. Compliance with the DOCA will be monitored and reported to creditors under the supervision of the Deed Administrators.
14. The DOCA is estimated to produce a return to creditors of 100 c in $ plus interest at the prescribed rate.
{KVM\S1968829:1}
3
15. OTHER TERMS
16. The Proposer nor any related parties will participate as
an unsecured creditor in any way in distributions made under the DOCA.
17. All assets of the company remain in the company and therefore subject to administrator's control until return of control of company to Director.
18. The DOCA will continue in operation until it is terminated.
19. Except to the extent that they are inconsistent with the terms of the deed, the provisions of Schedule 8A of the Corporations Regulations 2001 (Cth) will be included in the DOCA.
20. The DOCA is liable to be terminated in the event that there is a breach of either clauses 6(b) or 7, and otherwise in the circumstances and manner provided for in the Corporations Act 2001 (Cth).
21. The Administrators and Deed Administrators will be entitled to be renumerated out of the Deed Fund in accordance with this proposal.
22. During the period of the deed: (a) Creditors must not apply to wind up the Company
or make any claims of commence proceedings against the Company or any assets of the Company; and
(b) Directors, former directors, shareholders, former shareholders or related parties must not take any steps to wind up the Company or commence proceedings against the Company.
23. During the period of the deed the Proponent will not,
and must procure that the appointor of the ACH Trust does not take any step to remove or replace the Company as trustee for the ACH Trust or vest that trust.
Appendix E
Estimated Outcome Statement
Low High Low High$ $ $ $
AssetsCash at bank - - - - Debtors - 6,000,000 - 13,000,000 Other assets - - 509,584 2,419,167 Voidable TransactionsVoidable transactions N/A N/A - - Insolvent trading N/A N/A - - DOCA contribution 50,000 50,000 - - Total available for priority costs 50,000 6,050,000 509,584 15,419,167 Less: Priority expenseAdministrators' fees and disbursements (98,394) (93,394) (103,394) (83,394) Deed Administrators' fees and disbursements (60,000) (40,000) N/A N/ALiquidators' fees and disbursements N/A N/A (100,000) (50,000) Total priority expenses (158,394) (133,394) (203,394) (133,394) Funds available for distribution (108,394) 5,916,606 306,190 15,285,773 Secured creditorRobert and Carol Turner Principle (2,542,276) (2,542,276) (2,542,276) (2,542,276) Robert and Carol Turner Statutory Interest (estimated) - (114,402) - (133,469) Funds available for unsecured creditors (2,650,670) 3,259,928 (2,236,086) 12,610,028 Unsecured creditorsHall Park Trust (2,589,138) (2,589,138) (2,589,138) (2,589,138) Gills Delaney Lawyers (8,333) (8,333) (8,333) (8,333) Mr Anthony Hartman - - (120,000) (120,000) Unsecured Creditors Statutory Interest (estimated) - (116,886) - (142,667) Surplus/(Deficit) to unsecured creditors (5,248,141) 545,570 (4,953,557) 9,749,890 Dividend rate for unsecured creditors N/A 100 c/$ NA 100 c/$Return to shareholders N/A 545,570 N/A 9,749,890
DOCA Liquidation
Appendix F
Remuneration Approval Report
ORIENT HOUSE INVESTMENTS PTY. LIMITED (ADMINISTRATORS APPOINTED) ACN 100 192 989 (“the Company”)
Remuneration Approval Report 1
This remuneration approval report provides you with the information you need to be able to make an
informed decision regarding the approval of our remuneration for undertaking the Voluntary
Administration of Orient House Investments Pty. Limited.
This report has the following information included:
Contents
Part 1: Declaration 3
Part 2: Executive Summary 3
Part 3: Remuneration 5
3.1 Remuneration claim resolutions 5
3.2 Details of remuneration 6
3.3 Total remuneration reconciliation 13
3.4 Likely impact on dividends 13
3.5 Remuneration recovered from external sources 13
Part 4: Disbursements 14
Part 5: Report on Progress of the Administration 14
Part 6: Summary of Receipts and Payments 14
Part 7: Queries 14
Schedule 1 – Resolution 1 Table of major tasks for remuneration 15
Schedule 2 – Resolution 2 Table of major tasks for remuneration 16
Schedule 3 – Resolution 3 Table of major tasks for remuneration 17
Schedule 4 – Resolution 4Table of major tasks for remuneration 18
Schedule 5 – Resolution 5 Table of major tasks for remuneration 20
Schedule 6 – Summary of Receipts and Payments 23
Contents
Remuneration Approval Report 2
You should read this report and the other documentation that we have sent you and then attend the
meeting of creditors in order to voice your opinion by casting your vote on the resolutions put to the
meeting. The meeting will also give you an opportunity to ask any questions that you may have.
Alternatively, you are also able to appoint a representative to attend on your behalf by lodging a proxy
form. Lodging a specific proxy form allows you to specify how your proxy must vote. Lodging a general
proxy form allows your representative to choose how your vote is exercised.
Information about the meeting of creditors is provided in the Voluntary Administrators’ Report dated 29
May 2020 and Supplementary Report dated 3 August 2020.
If you have any questions or need any assistance, please contact Chloe Lim on +61 2 8297 2437 or via
email on [email protected].
What do you need to do
next?
Remuneration Approval Report 3
Part 1: Declaration John McInerney and Said Jahani of Grant Thornton Australia Limited have undertaken a proper
assessment of this remuneration claim for our appointment as Joint and Several Administrators of Orient
House Investments Pty. Limited 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 Voluntary Administration.
Part 2: Executive Summary The total remuneration for this appointment is estimated to be $138,394 (excluding GST) if a Deed of
Company Arrangement is entered into, or $133,394 (excluding GST) if the Company is placed into
Liquidation.
In our Voluntary Administrators’ report dated 29 May 2020, we estimated remuneration for the Voluntary
Administration period (to date of Second Meeting) would be $56,694 (excluding GST) for the Company.
We note that the Voluntary Administration estimate (to date of Second Meeting) was increased to
$63,394 (excluding GST) compared to our previous estimate. This remuneration was approved by
creditors at the Second Meeting of Creditors on 9 June 2020.
We also note that total remuneration for the Voluntary Administration period (to date of reconvened
Second Meeting) is $83,394 (excluding GST) because of the following additional tasks that have been
conducted during the Voluntary Administration:
Preparing for and convening the adjourned Second Meeting of Creditors and preparing a
Supplementary Report to creditors;
Difficulties with receiving information from entities that the Company holds shares in;
Conducting a detailed review in regards to the Company’s current contracts/agreements;
Holding telephone discussions and sending emails to the Director regarding the outstanding
commission;
Notifications and discussions with various third parties; and
Difficulties in obtaining books and records.
Remuneration Approval Report 4
Remuneration currently claimed and previously approved is summarised below:
Period Report Reference
Amount (excl. GST)
Past remuneration approved Resolution period: 4 May 2020 to 22 May 2020 31,694.00 Resolution period: 23 May 2020 to 9 June 2020 (date of Second Meeting) 31,700.00
Total past remuneration approved 63,394.00
Remuneration approval sought 1. Voluntary Administration Future Remuneration Claim: Resolution 1: 10 June 2020 to 24 July 2020 Section 3, Sch 1 13,284.00 Resolution 2: 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting)
Section 3, Sch 2 6,716.00
Total – Voluntary Administration $83,394.00
Resolution 3: 11 August 2020 to execution of the DOCA (if applicable) Section 3, Sch 3 15,000.00
2. Deed of Company Arrangement (if applicable)* Future Remuneration Claim: Resolution 4: Commencement of the DOCA to the effectuation of the DOCA (if applicable)
Section 3, Sch 4 40,000.00
Total – Voluntary Administration and Deed of Company Arrangement
$138,394.00
3. Liquidation (if applicable)* Future Remuneration Claim: Resolution 5: Commencement to finalisation of Liquidation Section 3, Sch 5 50,000.00
Total – Voluntary Administration and Liquidation $133,394.00
Total remuneration claimed and approved
Voluntary Administration and Deed of Company Arrangement 138,394.00
Voluntary Administration and Liquidation 133,394.00
* 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 in the above table for full details of the calculation and
composition of the remuneration approval sought.
Remuneration Approval Report 5
Part 3: Remuneration 3.1 Remuneration claim resolutions
We will be seeking approval of the following resolutions to approve our remuneration. Details to support
these resolutions are included in section 3.2 and in the attached Schedules.
1. Voluntary Administration
Resolution 1: 10 June 2020 to 24 July 2020: “That the future remuneration of the Joint and Several
Administrators for the period from 10 June 2020 to 24 July 2020, is determined at a sum equal to the
cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the
hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased
at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of
$13,284, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration
from available funds as time is incurred on a monthly basis or as funds become available.”
2. Voluntary Administration
Resolution 2: 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting): “That the
future remuneration of the Joint and Several Administrators for the period from 25 July 2020 to 11
August 2020 (date of reconvened Second Meeting), is determined at a sum equal to the cost of time
spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates
as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of
up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $6,716,
exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from
available funds as time is incurred on a monthly basis or as funds become available.”
3. Voluntary Administration
Resolution 3: 11 August 2020 to execution of the DOCA (if applicable): “That the future
remuneration of the Joint and Several Administrators for the period from 11 August 2020 to execution of
the DOCA (if applicable), is determined at a sum equal to the cost of time spent by the Joint and Several
Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated
3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year
(rounded to the nearest $10), up to a capped amount of $15,000, exclusive of GST, and that the Joint
and Several Administrators can draw the remuneration from available funds as time is incurred on a
monthly basis or as funds become available.”
4. Deed of Company Arrangement
Resolution 4: Commencement of the DOCA to the effectuation of the DOCA (if applicable): “That
the future remuneration of the Deed Administrators for the period from commencement of the DOCA to
the effectuation of the DOCA, is determined at a sum equal to the cost of time spent by the Deed
Administrators and his partners and staff, calculated at the hourly rates as detailed in the Report dated 3
August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year
(rounded to the nearest $10), up to a capped amount of $40,000, exclusive of GST, and that the Deed
Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or
as funds become available.”
Remuneration Approval Report 6
5. Liquidation
Resolution 5: Commencement to finalisation of the Liquidation: “That the future remuneration of
the Joint and Several Liquidators for the period from commencement to finalisation of the Liquidation, is
determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their
partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided
to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest
$10), up to a capped amount of $50,000, exclusive of GST, and that the Joint and Several Liquidators
can draw the remuneration from available funds as time is incurred on a monthly basis or as funds
become available.”
3.2 Details of remuneration
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 time based /
hourly rates method. This is because:
We will only be paid for work done, subject to sufficient realisations of the Company’s assets.
Or, if there are insufficient assets realised, subject to the indemnity provided to us (please refer
to our Declaration of Independence, Relevant Relationship and Indemnities);
It ensures creditors are only charged for work that is performed. Our time is recorded and
charged in six minute increments and staff are allocated to duties according to their relevant
experience and qualifications;
We are required to perform a number of tasks which do not relate to the realisation of assets,
for example responding to creditor enquiries, reporting to ASIC, distributing funds in
accordance with the provisions of the Corporations Act or the Bankruptcy Act;
We are unable to estimate with certainty the total amount of fees necessary to complete all
tasks required in the external administration;
We have a time recording system that is able to produce a detailed analysis of time spent on
each type of task by each individual staff member utilised in the Administration; and
The method provides full accountability in the method of calculation.
Remuneration Approval Report 7
Explanation of Hourly Rates
Title Description Hourly Rate (excl. GST)
Appointee Registered Liquidator / Trustee. Partner bringing specialist skills to Administrations and Insolvency matters. Controlling all matters relating to the assignment.
$695
Director Qualified accountant (CA/CPA) and may be a registered Liquidator/Trustee. Minimum 7/8+ years’ experience. Likely to be appointed as a partner or principal in due course. Highly advanced technical and commercial skills. Planning and control of all Administration and Insolvency tasks. Controlling substantial matters relating to the assignment and reporting to the appointee.
$615
Senior Manager Qualified accountant (CA/CPA). 7/8+ years’
experience. Well developed technical and commercial
skills. Planning and control of all Administration and
Insolvency tasks. Controlling substantial matters
relating to the assignment and reporting to the
appointee.
$590
Manager Typically CA/CPA Qualified. 5-8 years’
experience. Well developed technical and commercial
skills. Planning and control of Administration and
Insolvency tasks with the assistance of the appointee.
$530-545
Senior Associate Typically CA/CPA Qualified. 3-5 years’ experience. Required to control the fieldwork on Administrations and Insolvency tasks.
$430-485
Associate Typically undertaking CA/CPA Qualifications. Up to 3 years’ experience. Required to conduct the fieldwork on smaller Administrations and Insolvency tasks and assist with fieldwork on medium to large Administrations and Insolvency tasks.
$285-360
Treasury Specifically responsible for the treasury function of Administrations and Insolvency matters as well as statutory lodgements.
$245
Undergraduate Not CA/CPA Qualified, with less 1-2 years’ experience. Required to conduct the fieldwork on smaller Administrations and Insolvency tasks and assist with fieldwork on medium to large Administrations and Insolvency tasks.
$225
EA/PA Carries out all secretarial functions relating to an Administration and all aspects relating to administering the accounts function.
$220
The basis of calculating the remuneration claims are summarised below and the details of the major
tasks performed and the costs associated with each of those major tasks are contained in Schedules 1
to 5.
Remuneration Approval Report 8
1. Voluntary Administration
Resolution 1 from 10 June 2020 to 24 July 2020: “That the future remuneration of the Joint and Several Administrators for the period from 10 June 2020 to
24 July 2020, is determined at a sum equal to the cost of time spent by the Joint and Several Administrators and their partners and staff, calculated at the
hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to
the nearest $10), up to a capped amount of $13,284, exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from
available funds as time is incurred on a monthly basis or as funds become available.”
The below table sets out time charged to each major task area by staff members working on the Voluntary Administration for the period from 10 June 2020 to
24 July 2020 which is the basis of the Resolution 1 claim. More detailed descriptions of the tasks performed within each task area, matching the amounts
below, are contained in Schedule 1.
Position $/Hr (excl. GST) Total Hours Hrs $ Hrs $ Hrs $ Hrs $ Hrs $
Partner - 1 695.00 6.4 0.3 208.50 3.5 2,432.50 1.1 764.50 1.5 1,042.50
Senior Manager - 2 590.00 12.1 6.0 3,540.00 4.0 2,360.00 2.1 1,239.00
Manager - 1 400.00 0.2 0.2 80.00
Manager - 1 345.00 0.2 0.2 69.00
Associate - 1 285.00 4.6 1.0 285.00 2.0 570.00 1.6 456.00
Treasury 245.00 0.8 0.2 49.00 0.6 147.00
Associate - 1 205.00 0.2 0.2 41.00
24.5 7.3 4,033.50 9.5 5,362.50 3.2 2,003.50 2.1 1,212.50 2.4 672.00
403.35 536.25 200.35 121.25 67.20
7.3 4,436.85 9.5 5,898.75 3.2 2,203.85 2.1 1,333.75 2.4 739.20
607.79 620.92 688.70 635.12 308.00
Total (Incl. GST) 14,612.40
Average hourly rate
Total 13,284.00
GST 1,328.40
Eva Petalio 196.00
Catherine Sawyer 41.00
David Trehy 69.00
Chloe Li Ying Lim 1,311.00
Lisa Gibb 7,139.00
David Trehy 80.00
Administration Statutory
Employee
Total Cost
excl. GST ($)
John McInerney 4,448.00
Assets Creditors Investigations
ARITA TASK AREA
Remuneration Approval Report 9
2. Voluntary Administration
Resolution 2 from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting): “That the future remuneration of the Joint and Several
Administrators for the period from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting), is determined at a sum equal to the cost of time
spent by the Joint and Several Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020
provided to creditors, that may be increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $6,716,
exclusive of GST, and that the Joint and Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as
funds become available.”
The below table sets out time charged to each major task area by staff members working on the Voluntary Administration for the period from 25 July 2020 to 11
August 2020 (date of reconvened Second Meeting) which is the basis of the Resolution 2 claim. More detailed descriptions of the tasks performed within each
task area, matching the amounts below, are contained in Schedule 2.
Assets Creditors Investigation Administration Statutory
$ $ $ $ $
Total 6,700.00 1,700.00 2,200.00 1,800.00 400.00 600.00
GST 670.00 170.00 220.00 180.00 40.00 60.00
Total (Incl. GST) 7,370.00 1,870.00 2,420.00 1,980.00 440.00 660.00
ARITA Task Area
Remuneration Approval Report 10
3. Voluntary Administration
Resolution 3 from 11 August 2020 to execution of the DOCA (if applicable): “That the future remuneration of the Joint and Several Administrators for the
period from 11 August 2020 to execution of the DOCA (if applicable), is determined at a sum equal to the cost of time spent by the Joint and Several
Administrators and their partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be
increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $15,000, exclusive of GST, and that the Joint and
Several Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”
The below table sets out time charged to each major task area by staff members working on the Voluntary Administration for the period from 11 August 2020 to
execution of the DOCA (if applicable) Which is the basis of the Resolution 3 claim. More detailed descriptions of the tasks performed within each task area,
matching the amounts below, are contained in Schedule 3.
Assets Creditors Administration Statutory
$ $ $ $
Total 15,000.00 4,000.00 4,500.00 3,000.00 3,500.00
GST 1,500.00 400.00 450.00 300.00 350.00
Total (Incl. GST) 16,500.00 4,400.00 4,950.00 3,300.00 3,850.00
ARITA Task Area
Remuneration Approval Report 11
4. Deed of Company Arrangement
Resolution 4 from commencement of the DOCA to the effectuation of the DOCA (if applicable): “That the future remuneration of the Deed Administrators
for the period from commencement of the DOCA to the effectuation of the DOCA, is determined at a sum equal to the cost of time spent by the Deed
Administrators and his partners and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be
increased at a rate of up to 7.5% at 1 July each year (rounded to the nearest $10), up to a capped amount of $40,000, exclusive of GST, and that the Deed
Administrators can draw the remuneration from available funds as time is incurred on a monthly basis or as funds become available.”
The below table sets out time charged to each major task area by staff members working on the Deed of Company Arrangement for the period from
commencement of the DOCA to the effectuation of the DOCA (if applicable) which is the basis of the Resolution 4 claim. More detailed descriptions of the
tasks performed within each task area, matching the amounts below, are contained in Schedule 4.
Assets Creditors Dividend Administration Statutory
$ $ $ $ $
Total 40,000.00 10,000.00 9,000.00 8,500.00 5,500.00 7,000.00
GST 4,000.00 1,000.00 900.00 850.00 550.00 700.00
Total (Incl. GST) 44,000.00 11,000.00 9,900.00 9,350.00 6,050.00 7,700.00
ARITA Task Area
Remuneration Approval Report 12
5. Liquidation
Resolution 5 from commencement to finalisation of the Liquidation: “That the future remuneration of the Joint and Several Liquidators for the period from
commencement to finalisation of the Liquidation, is determined at a sum equal to the cost of time spent by the Joint and Several Liquidators and their partners
and staff, calculated at the hourly rates as detailed in the Report dated 3 August 2020 provided to creditors, that may be increased at a rate of up to 7.5% at 1
July each year (rounded to the nearest $10), up to a capped amount of $50,000, exclusive of GST, and that the Joint and Several Liquidators can draw the
remuneration from available funds as time is incurred on a monthly basis or as funds become available.”
The below table sets out time charged to each major task area by staff members working on the Liquidation for the period from commencement to finalisation
of the Liquidation which is the basis of the Resolution 5 claim. More detailed descriptions of the tasks performed within each task area, matching the amounts
below, are contained in Schedule 5.
Assets Creditors Investigation Dividend Administration Statutory
$ $ $ $ $ $
Total 50,000.00 12,500.00 11,500.00 6,500.00 7,000.00 5,500.00 7,000.00
GST 5,000.00 1,250.00 1,150.00 650.00 700.00 550.00 700.00
Total (Incl. GST) 55,000.00 13,750.00 12,650.00 7,150.00 7,700.00 6,050.00 7,700.00
ARITA Task Area
Remuneration Approval Report 13
3.3 Total remuneration reconciliation
At this point in time, we estimate that the total remuneration for the Voluntary Administration (to date of
reconvened Second Meeting) will be $83,394 (excluding GST). In the event a DOCA is voted upon, we
estimate the total remuneration for the Voluntary Administration and Deed of Company Arrangement will
be $138,394 (excluding GST). If the Company enters into Liquidation, we estimate the total
remuneration for the Voluntary Administration and Liquidation will be $133,394 (excluding GST).
We have provided an explanation of tasks remaining to be completed, including our estimated costs to
complete those tasks, to support our current remuneration approval request, at section 3.2 of the report
and in Schedules 1 to 5.
In preparing this remuneration approval report, we have made our best estimate at what we believe the
Voluntary Administration and Deed Administration or Liquidation will cost to complete and we do not
anticipate that we will have to ask creditors to approve any further remuneration. However, should the
Voluntary Administration and Deed Administration or Liquidation not proceed as expected, we will
advise creditors and we may seek approval of further remuneration and provide details on why the
remuneration has changed. Matters that may affect the progress and the cost of the Voluntary
Administration and Deed Administration or Liquidation, include:
Further investigations into the failure of the Company;
Protracted complications with adjudicating on creditor claims;
Further investigations into potential voidable transactions and insolvent trading claims;
Unforeseen complexities in negotiating the DOCA;
Unforeseen complexities in administrating the DOCA; and
Legal action with respect to potential insolvent trading claims, voidable transactions and/or
other claims.
3.4 Likely impact on dividends
The Corporations Act sets the order for payment of claims against the Company and it provides for
remuneration of the Joint and Several Administrators to be paid in priority to other claims. This ensures
that when there are sufficient funds, the Joint and Several Administrators receives payment for the work
done to recover assets, investigate the Company’s affairs, report to creditors and ASIC and distribute
any available funds. Even if creditors approve our remuneration, this does not guarantee that we will be
paid, as we are only paid if sufficient assets are recovered.
Any dividend to creditors will also be impacted by the amount of assets that we are able to recover and
the amount of creditor claims that are admitted to participate in any dividend.
At this stage, we estimate that creditors will be repaid 100 cent in the dollar. However, we note this is
contingent upon the Company receiving the outstanding commission payable. If this is not received, the
dividend will range from 0 to 100 cent in the dollar. If we do declare a dividend, any creditor whose claim
has not yet been admitted will be contacted and asked to submit a proof of debt.
3.5 Remuneration recovered from external sources
As previously advised in our Declaration of Independence, Relevant Relationships and Indemnities
dated 5 May 2020, the Director has provided an indemnity of $50,000. To date, we have received into
our trust account $25,000 which was subsequently called upon to meet the costs of the Administration.
The Director is due to remit a further $25,000 into the trust account. This funding is in respect to any
shortfall in assets to pay claims and expenses arising out of, in connection with or incidental to the
external administration(s) of the Company (including Liquidation). The Administrators (and Liquidators)
may call upon the indemnity funding should the assets of the Company be insufficient to meet the costs
and expenses of the external administration(s).
Remuneration Approval Report 14
There are no conditions on the conduct or outcome of the Administration attached to the provision of the
indemnity funding.
Part 4: Disbursements Disbursements are divided into three types:
Externally provided professional services – these are recovered at cost. An example of an
externally provided professional service disbursement is legal fees.
Externally provided non-professional costs – these are recovered at cost. Examples of externally
provided non-professional costs are travel, accommodation and search fees.
Internal disbursements such as photocopying, printing and postage. These 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. The recovery of these costs must be on a reasonable commercial basis. Details of
the basis of recovery of each of these costs is discussed below.
We have undertaken a proper assessment of disbursements claimed for Orient House Investments Pty.
Limited in accordance with the law and applicable professional standards. We are satisfied that the
disbursements claimed are necessary and proper.
We will not be seeking creditor approval to pay our internal disbursements from creditors.
Part 5: Report on Progress of the Administration A report on the progress of the Voluntary Administration is provided in the Report dated 29 May 2020
and Supplementary Report dated 3 August 2020.
Part 6: Summary of Receipts and Payments A summary of the receipts and payments for the Voluntary Administration as at 30 July 2020 is at
Schedule 6 to this report.
Part 7: Queries If you have any queries in relation to the information in this report, please contact our staff:
Contact Name: Chloe Lim
Contact Number: +61 2 8297 2437
Email: [email protected]
You can also access information which may assist you on the following websites:
ARITA at www.arita.com.au/creditors
ASIC at www.asic.giv.au (search for “insolvency information sheets”).
Remuneration Approval Report 15
Schedule 1 – Resolution 1 Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period
from 10 June 2020 to 24 July 2020.
Task Area General Description Includes
Assets
7.3 hours
$4,033.50
Debtors Continue to follow up APMR
Discussions with the Director re APMR payment
Formal notice and directions to pay to APMR
Other Assets Liaise with entities that the Company holds shares in
Continue to follow up entities that the Company holds shares in
Creditors
9.5 hours
$5,362.50
Secured creditor reporting Responding to secured creditor’s queries
Formal updates to the secured creditor regarding payment from AMPR
Telephone discussions with the secured creditor
Creditor reports Preparing Supplementary Report to Creditors ahead of reconvened Second Meeting of Creditors
Adjourned Second Meeting of Creditors
Preparation of meeting notices, proxy forms and advertisements
Forward notice of meeting to all known creditors
Preparation of meeting file, including agenda, attendance register, list of creditors and draft minutes of meeting
DOCA Holding further discussions regarding DOCA proposal with the Director
Discussions internally regarding DOCA proposal
Conducting investigation Review of transactions with APMR
Document maintenance/file review/checklist
Filing of documents
Updating checklists
Investigation
3.2 hours
$2,003.50
General Reviewing bank statements
Review of Company books and records
Emails to third parties
Administration
2.1 hours
$1,212.50
Planning / Review Discussions regarding status of administration
Statutory
2.4 hours
$672.00
ASIC Forms Preparing and lodging ASIC forms
Total
$13,284.00
Remuneration Approval Report 16
Schedule 2 – Resolution 2 Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period
from 25 July 2020 to 11 August 2020 (date of reconvened Second Meeting).
Task Area General Description Includes
Assets
$1,700.00
Debtors Continue to follow up APMR
Discussions with the Director re APMR payment
Other Assets Liaise with entities that the Company holds shares in
Continue to follow up entities that the Company holds shares in
Creditors
$2,200.00
Secured creditor reporting Responding to secured creditor’s queries
Formal updates to the secured creditor regarding payment from AMPR
Telephone discussions with the secured creditor
Creditor reports Preparing Supplementary Report to Creditors ahead of reconvened Second Meeting of Creditors
Adjourned Second Meeting of Creditors
Preparation of meeting notices, proxy forms and advertisements
Forward notice of meeting to all known creditors
Preparation of meeting file, including agenda, attendance register, list of creditors and draft minutes of meeting
Holding adjourned Second Meeting of Creditors
Preparation and lodgement of minutes of meetings with ASIC
Responding to stakeholder queries and questions immediately following meeting
DOCA Holding further discussions regarding DOCA proposal with the Director
Discussions internally regarding DOCA proposal
Conducting investigation Review of transactions with APMR
Document maintenance/file review/checklist
Filing of documents
Updating checklists
Investigation
$1,800.00
General Undertaking investigations into the Company’s asset position
Administration
$400.00
Planning / Review Discussions regarding status of administration
Statutory
$600.00
ASIC Forms Preparing and lodging ASIC forms
Total
$6,716.00
Remuneration Approval Report 17
Schedule 3 – Resolution 3 Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period
from 11 August 2020 to execution of the DOCA (if applicable).
Task Area General Description Includes
Assets
$4,000.00
Debtors Continue to follow up APMR
Discussions with the Director re APMR payment
Formal notice and directions to pay to APMR
Creditors
$4,500.00
Creditor Enquiries, Requests & Directions
Receive and respond to creditor enquiries
Review and prepare correspondence to creditors and their representatives
Secured creditor reporting Responding to secured creditor’s queries
Formal updates to the secured creditor regarding payment from AMPR
DOCA Further discussions regarding terms of DOCA proposal
Internal discussions regarding DOCA
Preparation of estimated return to creditors calculations
Finalisation and execution of DOCA
Administration
$3,000.00
Correspondence Preparing correspondence to various parties
Document maintenance/file review/checklist
Filing of documents
Updating checklists
Bank account administration Requesting bank statements
Bank reconciliations
Planning / Review Discussions regarding status of administration
Statutory
$3,500.00
ASIC Forms Preparing and lodging ASIC forms
Attending to statutory reporting and requirements
Total
$15,000.00
Remuneration Approval Report 18
Schedule 4 – Resolution 4Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period
from commencement of the DOCA to the effectuation of the DOCA (if applicable).
Task Area General Description Includes
Assets
$10,000.00
Debtors Continue to pursue payment from APMR
Issue formal demand (if required)
Instruct solicitors if required to chase payment from APMR
Creditors
$9,000.00
Creditor Enquiries, Requests & Directions
Receive and respond to creditor enquiries
Review and prepare initial correspondence to creditors and their representatives
Preparing circular to creditors advising of DOCA execution
Secured creditor reporting Responding to secured creditor’s queries
Formal update to secured creditors
Dealing with proofs of debt Receipting and filing POD
Corresponding with ATO regarding POD
Circular to Creditors Preparation of Circular to Creditors advising of DOCA execution
Dispatch Circular to Creditors by email and mail
Dividend
$8,500.00
Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD
Receipt of POD
Maintain POD register
Adjudicating POD
Request further information from claimants regarding POD
Preparation of correspondence to claimant advising outcome of adjudication
Dividend procedures 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 entries to pay dividend
Preparation of correspondence to creditors enclosing payment of dividend
Legal (if required) Seek legal advice on adjudication of PODs
Remuneration Approval Report 19
Task Area General Description Includes
Respond to creditors and/or their representatives enquiries regarding adjudication
Administration
$5,500.00
Correspondence General correspondence to various parties
Document maintenance/file review/checklist
Six monthly administration reviews
Filing of documents
File reviews
Updating checklists
Bank account administration Preparing correspondence opening and closing accounts (Voluntary Administration to DOCA)
Requesting bank statements
Bank account reconciliations
ATO and other statutory reporting
Notification of appointment of Deed Administrators
Planning / Review Discussions regarding status of DOCA
Statutory
$7,000.00
ASIC Forms Preparation of lodgements with ASIC in relation to the execution of DOCA and appointment of Deed Administrators
Preparation of lodgements with ASIC in relation to effectuation of DOCA
Total
$40,000.00
Remuneration Approval Report 20
Schedule 5 – Resolution 5 Table of major tasks for remuneration The below table provides a description of the work undertaken in each major task area for the period
from commencement to finalisation of the Liquidation.
Task Area General Description Includes
Assets
$12,500.00
Debtors Continue to pursue payment from AMPR
Issue formal demand (if required)
Instructing solicitors regarding payment from AMPR (if required)
Other Assets Liaise with entities that the Company holds shares in
Continue to follow up entities that the Company holds shares in
Realising shareholding if payment from AMPR is not received
Creditors
$11,500.00
Creditor Enquiries, Requests & Directions
Receive and respond to creditor enquiries
Review and prepare initial correspondence to creditors and their representatives
Considering reasonableness of creditor requests
Obtaining legal advice on requests
Secured creditor reporting Responding to secured creditor’s queries
Creditor reports Preparation of Circular to Creditors advising the outcome of Second Meeting of Creditors and the appointment of Liquidators
Preparing Statutory Report by Liquidator, investigation, proposal without meeting
Dealing with proofs of debt Receipting and filing POD when not related to a dividend
Corresponding with ATO regarding POD when not related to a dividend
Proposals to Creditors (if applicable)
Preparing proposal notices and voting forms
Forward notice of proposal to all known creditors
Reviewing votes and determining outcome of proposal
Preparation and lodgement of proposal outcome with ASIC
Investigation
$6,500.00
Conducting investigation Conducting further investigations into director offences
Conducting further investigations into potential voidable transactions and insolvent trading claims
Review of specific transactions and liaising with directors regarding certain transactions
Preparing statutory investigation reports
Preparation of investigation file
Lodgement of investigation with ASIC
Examinations (if applicable) Preparing brief to solicitor
Liaising with solicitor(s) regarding examinations
Remuneration Approval Report 21
Task Area General Description Includes
Attendance at examination
Reviewing examination transcripts
Liaising with solicitor(s) regarding outcome of examinations and further actions available
Litigation / Recoveries (if applicable)
Internal meetings to discuss status of litigation
Preparing brief to solicitors
Liaising with solicitors regarding recovery actions
Attending to negotiations
Attending to settlement matters
Dividend
$7,000.00
Processing proofs of debt Preparation of correspondence to potential creditors inviting lodgement of POD
Receipt of POD
Maintain POD register
Adjudicating POD
Request further information from claimants regarding POD
Preparation of correspondence to claimant advising outcome of adjudication
Dividend procedures 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 entries to pay dividend
Preparation of correspondence to creditors enclosing payment of dividend
Administration
$5,500.00
Correspondence Correspondence with various parties
Document maintenance/file review/checklist
Administration reviews
Filing of documents
File reviews
Updating checklists
Bank account administration Preparing correspondence for closing accounts
Requesting bank statements
Bank account reconciliations
ATO and other statutory reporting
Notification of appointment of Liquidators
Notification of cessation
Finalisation Notifying ATO of finalisation
Cancelling ABN / GST / registration
Completing checklists
Remuneration Approval Report 22
Task Area General Description Includes
Finalising WIP
Planning / Review Discussions regarding status of administration
Statutory
$7,000.00
ASIC forms Preparing and lodging ASIC forms
Correspondence with ASIC regarding statutory forms
Documents of appointment Preparation, review and execution of the documents of appointment
Total
$50,000.00
Remuneration Approval Report 23
Schedule 6 – Summary of Receipts and Payments
Administrators' Receipts and Payments as at 30 July 2020
($)
Receipts
Indemnity funding 25,000.00
Interest income 0.68
Total Receipts 25,000.68
Payments
Administrators' remuneration 25,000.00
Bank charges 0.44
Total Payments 25,000.44
Net Receipts / (Payments) 0.24
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