VIRGIN COURT BATTLE OVER ‘SUPERIOR’ BID
DISGRUNTLED investors in collapsed Virgin Australia say they have a “superior” alternative rescue plan for the carrier but have taken a swipe at administrators Deloitte for stymieing the proposal.
Lawyers for unsecured bond holders in Virgin told the Federal Court on Friday they risked being shut out of being able to develop the plan if they were not given timely access to confidential information held by administrators Deloitte on how the successful Bain Capital proposal was structured.
Barrister Ian Jackman for the bond holders told the court that his clients wanted to put a superior proposal at a second meeting of creditors due in August that would result in a better return for creditors and ensure the viability of the airline.
The bond holders – Singapore’s Broad Peak Investment Advisers and Hong Kong Tor Investment Managers – are upset their own earlier proposal to recapitalise the airline was rejected by the administrators, despite assurances made throughout the sale process.
Mr Jackman said the bond holders would only be informed about the structure of the Bain deal in a report just prior to the August meeting, which would not be enough time to formulate details of its own deed of company arrangement (DOCA) for Virgin.
“The difficulty for my client is that period is too short a time to formulate its own DOCA,” Mr Jackman said. “We wish to exercise our statutory rights to make an alternative proposal but we need the information on how the Bain deal was structured.”
Judge John Middleton said while it was important administrators Deloitte communicated and informed creditors in preparation for the creditors meeting, he would not overturn his earlier order to keep details of the deal under wraps.
Virgin Australia went into voluntary administration on April 21 with debts of $6.8bn, including $2bn owed to bondholders. Bondholders fear they will get as little as 6.5c in the dollar for their investment.