REX AIRLINES Trading Halt

[KittyKatKaper]

Originally Posted by ozbiggles

From the ABC news site
a week before Rex announced a trading halt, it issued a statement to the ASX with a new set of conditions entitling Mr Howell to 12 months' notice for his termination period.

Perhaps more importantly, the new provisions allowed that in the event there was a "significant change to his duties or responsibilities, or a change which substantially diminishes his position, the company will immediately terminate his employment and make payment in lieu of 12 months notice".

also at https://michaelwest.com.au/rex-has-a...whats-the-scam
Rex has a Howeller – what’s the scam?

by Michael West | Aug 1, 2024 | What's the scam?


What’s the scam with Rex suddenly tarting up the employment contract of its chief executive Neville Howell a few days before he bit the dust? How fortuitous is that!

This week, Regional Express Holdings (Rex Airlines) was placed into voluntary administration. Rex’s fleet of Boeing 737 aircraft are stranded. Rex’s 600 plus employees await their fate. Rex’s shareholders know a haircut is coming but they can’t be sure yet whether it will be clipper number 2, clipper number 1 or a razor and a full shave.

Voluntary administration is the Australian euphemism for a bankruptcy procedure or a corporate collapse. The term voluntary administration has pleasing phonics. It’s voluntary and its administration, what could possibly be bad about that? Voluntary administration might not sound as bad as ‘bankruptcy’ for unwitting shareholders and employees, but it almost invariably is.

Various of them have or are about to, sick Rex. It’s feeding time, and Rex Airlines is the main dish. Maybe it will take a decade to digest Rex, just like Ansett Airlines beforehand, or maybe it will take less time. The clock is ticking. Voluntary administration means a gaggle of suits and ties with timesheets appear at the scene of the corporate crash to offer their opinions on what to do with the wreckage. There will be lots of handwringing, meetings and reports and, of course, the toing and froing with interested parties, including the Federal Government.

External accountants take over the management of the company. Their timesheets fill up quickly as do those of the lawyers and the bills for consultants and other experts that are deemed indispensable to the stage management of a voluntary administration. There will be so much correspondence; so many emails and they all need to be read by everybody with a timesheet.

In practical terms, the first order of business in a voluntary administration is usually managing the team. The CEO needs to be taken care of, so to speak, in order that they will co-operate with the external accountants and show them where the skeletons are hidden and, of course, not rock the boat.

And so it was that on 25 July 2024, six days before the bankruptcy procedure began, the Board of Rex notified the ASX that it had upgraded the CEO’s employment agreement. Previously, the CEO Neville Howell was entitled to 5 weeks’ notice. The Board changed 5 weeks; notice to 12 months’ notice. They also added that the CEO would be immediately terminated and receive a payment in lieu of 12 months’ notice if something significant happened to degrade the CEO’s position, for example, entering voluntary administration in six days’ time.

What a charade. Line up the deck chairs for the impending bankruptcy procedure as if it is business as usual and then, and only then, the Board can turn its mind to whether the company is insolvent and make an announcement to the ASX.

The pilots of the grounded Boeing 737s, and perhaps other employees of Rex must wonder why can’t be immediately terminated and receive a “kiss off” payment of 12 months’ salary just like the CEO.

Perhaps ASIC is watching. After all, ASIC is responsible for corporate insolvency laws in Australia, and they are good at watching but not acting. The Australian Senate recently found that ASIC had “comprehensively failed to fulfil its regulatory remit.” They could have added “no more so than in voluntary administrations.”

What nobody wants is an Ansett, whose voluntary administration turned into a liquidation which took some 17 years and hundreds of millions billions in costs to unwind.