Originally Posted by
Blackout
G'day Mick,
I haven't really looked that hard into all these documents, but insolvent trading might be an issue if not fixed?
G'day Blackout,
No, not really. Entering voluntary administration is usually undertaken on the assumption or knowledge that the business is or is about to become insolvent. And while just because a parent entity is insolvent doesn't necessarily mean that a subsidiary is insolvent, that's moot in this case because VARA was already under administration anyhow.
This particular matter is really just a clerical error. Newco 2 was assumed to have been dormant and solvent and able to be wound up as a simple desk top exercise. There's a reference in one of the filings to an understanding
that "the company be wound up voluntarily" and "that the remuneration of the Liquidator from the date of appointment to the date of completion is agreed at $4,500 exclusive of GST, being the amount calculated in the remuneration approval report dated 21 march 2019 and sent to the members"
At least part of the reason for the application is that Deloitte have realised that the fees allocated for the task are inadequate given that the matter couldn't be resolved as first contemplated.
A point that is worth reiterating though is that VARA was always part of the administration. The VARA Group, A.C.N. 098 904 262 and VARA itself, were the Nineteenth and Twentieth Plaintiffs on the original filing for voluntary administration. That business was always up for grabs as part of the sale process undertaken by the administrator.
Originally Posted by
Blackout
"On 22 January 2020, the Companies obtained Foreign Investment Review Board (FIRB) approval for an internal reorganisation allowing for the transfer of shares in other entities in the Virgin Group that are held by the Companies (other than those in liquidation (and as identified above)), to VAAH. These actions were scheduled to occur this year but were put on hold due to the onset of the COVID-19 pandemic."
VAH
^
Newco 2 (100%)
^
VARA
I haven't gotten my head fully around that but it appears that Virgin were in the process of trying to simplify some of their corporate structures. It sounds like they were going from a structure that looked like VAH > Newco 2 > A.C.N. 098 904 262 > VARA to something more like VAH > VAAH > VARA.
They couldn't have been too advanced with that work otherwise you would have expected that they would have picked up the fact that Newco 2 wasn't dormant.