Originally Posted by
Blackout
Mick,
Fair to say it's all about the DOCA. There are still steps to be taken by Bain to reach a DOCA. The way I read it, the door is still open for Legal action against Deloitte.
Interesting times.
Yes, it will come down to the presentation of a DOCA at the second creditors' meeting.
The mechanics of the second creditors' meeting, in particular a vote on a DOCA, are fairly straightforward. If Bain has the secured creditors and the unions on side, the DOCA will be approved. If Bain has only the secured creditors on side but everyone else votes against the DOCA, the vote will be split between value and number; in this case the administrator casts the deciding vote. No prizes for guessing how that vote will be cast.
Where the outcome relating to a DOCA is determined by the exercise of the administrator’s casting vote, any creditor may apply to the court for a review of the outcome and appropriate order. Thus it is best to have the DOCA approved by a majority by value (secured creditors) and number (employees). Deloitte and Bain understand this - where do you think their efforts will be focussed over the next month?
With respect to legal action, yes, that's always a recourse - whether the action has any merit or not is an entirely different matter (see rejection of recent Broad Peak/Tor application to the Federal Court).
Originally Posted by
Lead Balloon
Yes, I think Mick overstated the effect of Middleton J's decision.
Yes, 'unequivocally' might have been a bit strong. The point though is that the court rejected the application by Broad Peak Investment and Tor to be granted access to the details of the Bain bid and Justice Middleton awarded Deloitte and Bain costs. The bottomline is that the bondholders have no special entitlement to information above that of any other creditor.
In terms of sharing information, the administrator needs to ensure that the creditors have sufficient information regarding the state of the business and a recommendation on a DOCA to cast a considered vote at the second creditors' meeting. That information is typically circulated a week or so ahead of the meeting.