FACTUAL BACKGROUND
13 On 7 June 2018, Mr Hughes was engaged by the Virgin Group to assist in deregistering or winding up dormant entities or entities with limited or no assets within the Virgin Group.
14 The Companies were identified as falling into that category and, on 26 April 2019, Mr Hughes was appointed as the liquidator of each of the Companies pursuant to s 491(1) of the Corporations Act 2001 (Cth) (the ‘Corporations Act’) by special resolution passed by Virgin Australia Airlines Holdings Pty Ltd, the sole shareholder of each of the Companies. Declarations of solvency were signed by the directors.
15 The Liquidator prepared statutory lodgements and invited proofs of debt to be lodged, but thus far no proofs have been lodged and no claims have been notified.
16 While it was initially thought that the Companies were dormant entities with no liabilities, Mr Hughes says he now understands that:
(1)
VB Investco and VAH Newco 2 is each a party to a deed of cross-guarantee dated 18 June 2007 (the ‘DOCG’), including with certain other companies in the Virgin Group, which provides that upon the winding up of an entity to the DOCG (either in insolvency or as a creditor voluntary winding up), each other entity to the DOCG is liable for its debts; and
(2) VAH Newco 2 is a guarantor of the following notes (the ‘Notes’) issued by VAH:
(a) the ‘VAH Unlisted 2018 Notes’: AUD$150,000,000 (face value) of 8.25% unsecured Fixed Rate Notes issued by VAH on 30 May 2018 and due for repayment on 30 May 2023;
(b) the ‘VAH Unlisted 2019 Notes’: AUD$250,000,000 (face value) of 8.075% unsecured Fixed Rate Notes issued by VAH on 5 March 2019 and due for repayment on 5 March 2024; and
(c) the ‘USD 2016 Senior Notes’: USD$350,000,000 (face value) of 7.875% Senior Notes issued by VAH and due for repayment on 15 October 2021.