AFR - Virgin Administrators come under fire for doubtful forecasts

[didrechambers77]

Oh the 4Corners doco, yawn. That's just a freebie for brand engagement, organised by Danii and her blackbook again. Maybe she should go back and get those bunny teeth fixed and a degree first... Let's not forget the cringy full page ad's she signed off in March at $3m.... money down the toilet.

[didrechambers77]

Fraud is right throughout the Business,
Former GM then redundant comes back consulting as 'Reknor' and behold DoGoodLabs are onboard. No tender to market for product, the audacity he even took to email former colleagues for comparable pricing. Old Chin-Moody's husband does(did) a bespoke contract for courier services between the 3 sites in Sydney... highly doubt that was put out to tender.

Don't forget Steffie and Martina (the real dynamic duo) who had a muff affair, and organised a stretch yellow hummer for a team outing the same day the business announced a historic loss in 2016 of $657m.

[Icarus2001]

Do the adminstrators alone get to decide who the winning bid is, or due creditors/shareholders get a say?

The administrators are not in control despite appearances to the contrary.

https://asic.gov.au/regulatory-resou...for-creditors/

The creditors vote for what they want to happen, the administrators simply propose what they think is the the best course of action (but for which party?).

[Buster Hyman]

Originally Posted by flamingmoe

I got it on the 5th pass, speaks in riddles.

Like Nostradamus, only makes sense after the fact...

[crosscutter]

Originally Posted by IBE8720

Do the adminstrators alone get to decide who the winning bid is, or due creditors/shareholders get a say?

Is it as simple as the highest bidder wins, or is there an element subjective opinion involved?

Think of the administrator as the slimy real estate agent who spruiks and markets and then presents the best offers to the home owner (creditor). The real estate agent has no power as the home owner decides if the offers are good enough. Similarly there is nothing stopping another buyer bypassing the real estate agent and going straight to the home owner.

In time the administrator will announce in great fan fare who they perceive has the best offer. However, it’s not even close to a done deal. That’s why final binding offers will be due maybe end of June (I’m not sure) but the actual sale, if there is one, will likely not happen to August. That’s why the extra funding is required.

The horses have only just bolted out of the gates in this race.

[non_state_actor]

The real estate agent has no power as the home owner decides if the offers are good enough

No not exactly. It is decided by a majority of creditors and the majority of the debt holders. If there is no agreement it's the administrator's call.

When a poll is conducted, a resolution is passed if both:

• more than half the number of creditors who are voting (in person or by proxy) vote in favour of the resolution
• those creditors who are owed more than half of the total debt owed to creditors at the meeting vote in favour of the resolution.

This is referred to as a ‘majority in number and value’. If a majority in both number and value is not reached under a poll (often referred to as a deadlock), the chairperson has a casting vote.

[crosscutter]

Yes, very true...just when you think you can be clever, you’re proven wrong...such is life.

Your point is very relevant as is this clause:
The exercise of the casting vote is most appropriate in circumstances where either creditors with a majority in value have such an overwhelming interest that it is inappropriate to allow a majority in number who do not have the same monetary interest to carry the day, or vice versa;

[Colonel_Klink]

Originally Posted by IBE8720

Is the Administrators SOLE aim is the best price or best chance of survival for the company? As someone said, Who are Deloitte working for?
Hypothethically.....
eg:
Bidder A are a group of Investment Bankers. They submit the highest bid as they see more value in the resale value of the company once they break it apart. That is their true motivation.

Bidder B is a Supermarket Chain that wants to buy an airline. They submit a bid $100 million lower. But claim greater industry expertise because they have a former airline CEO involved.

So the Administrator feels/cares that Bidder B have a better chance of survival as a new entity, so recommend to go with the lower bidder.
But the creditors actually get the final vote.

Or a scenario like that is possible?

The Administrator is required to come to a decision based on the interests of ALL creditors - and that includes employees, secured and non secured creditors, leasing Companies, etc.

If Company A in your situation was going to pay $100m more than Company B, but only operate 40 domestic aircraft, versus Company B who were going to pay slightly less but operate more aircraft, and hold on to the WB and VARA - there is a compelling argument that Company B might be in the greater interest of ALL creditors when compared to Company A.

My understanding is that the Administrator will have a recommendation of the preferred bidder - a majority of creditors in both terms of number AND value must approve the sale. Ultimately though, the Administrator has the final say if a consensus can’t be reached by creditors and have the authority to sell the business - although I would imagine if that occurred, the decision would be up for challenge in the courts.

So in summary, it is not necessarily the highest bidder that will be successful.

[Led Zeppelin]

- although I would imagine if that occurred, the decision would be up for challenge in the courts.

If there are no funds available (as is the situation with VAH after June), a court challenge would be meaningless.

[KRUSTY 34]

[QUOTE=Colonel_Klink;10795699]

If Company A in your situation was going to pay $100m more than Company B, but only operate 40 domestic aircraft, versus Company B who were going to pay slightly less but operate more aircraft, and hold on to the WB and VARA - there is a compelling argument that Company B might be in the greater interest of ALL creditors when compared to Company A.

Only if the Administrators have a fundamental lack of understanding as to what led VA into this mess in the first place.

[chookcooker]

If it was “telling” that Brookfield pulled their bid, is it equally “telling” they’re back? Or does that not suit the rhetoric?

[Colonel_Klink]

[QUOTE=KRUSTY 34;10796105]

Originally Posted by Colonel_Klink

If Company A in your situation was going to pay $100m more than Company B, but only operate 40 domestic aircraft, versus Company B who were going to pay slightly less but operate more aircraft, and hold on to the WB and VARA - there is a compelling argument that Company B might be in the greater interest of ALL creditors when compared to Company A.

Only if the Administrators have a fundamental lack of understanding as to what led VA into this mess in the first place.

For what it’s worth Krusty, I don’t think that’s actually a credible scenario. I was just trying to make the point that the highest bidder isn’t necessarily going to be the preferred option by the administrator.

From all the media - it’s hard to think the WBs survive. If they do - it will only be one of the current types.

And as for VARA - there is essentially no mention of them. All I keep hearing is one NB type. If you take that literally, then no more ATR or West Coast 320/F100. I just wonder if the advisors of the international bidders seriously understand the WA charter market. It makes money, has significant on carriage and is a pretty good for those WA corporate accounts....I sincerely hope that it survives.

[KRUSTY 34]

Thanks Colonel, I did take some of your remarks literally.

Hopefully the value of the West Coast Operations won’t be lost on the bidders, but I’m afraid if past airline administrations are anything to go by, I’ll doubt it.

[Ragnor]

[QUOTE=Colonel_Klink;10796528]

Originally Posted by KRUSTY 34

And as for VARA - there is essentially no mention of them. All I keep hearing is one NB type. If you take that literally, then no more ATR or West Coast 320/F100. I just wonder if the advisors of the international bidders seriously understand the WA charter market. It makes money, has significant on carriage and is a pretty good for those WA corporate accounts....I sincerely hope that it survives.

Is VARA under administration? legit question. I thought they were two separate AOC and business. ATR use to be on the VARA/Skywest books but now on Virgin

[Colonel_Klink]

[QUOTE=Ragnor;10797033]

Originally Posted by Colonel_Klink

Is VARA under administration? legit question. I thought they were two separate AOC and business. ATR use to be on the VARA/Skywest books but now on Virgin

They are.....the only part of VA that is not under administration is Velocity. Why you ask? I have no idea!

[Ragnor]

Just wondering, after reading SMH this morning s$%t is getting real for VA. With Brookfield back on the scene yesterday this could cause legal action by the other 4 delaying the process. Government rejecting Deloitte request for funds to keep operating escalating fears among the 4 remaining bidders and unions liquidation could happen before a deal is reached.

[Denied Justice]

This from a post re the expected British Airways redundancies:

Employees often fail to grasp that the CEO has a list of priorities; The first is that 'The company must still be in business when the sun rises tomorrow.'.
The second is the stock-price
Third; The stock-holders.
Employees don't even come within the top 20. All the 'management-speak' about the employees being the company's greatest asset etc is pure BS.. In the eyes of a CEO, employees are a costly necessity, nothing more.

Employees are nothing more than a cost centre for any of the bidders. No one should be under any illusion that there is benevolence in their minds.

[ANstar]

I wonder how many of these "serious bidders" have just used this as an opportunity to get access to the "data room" to see where the money is made and lost before walking away and using that data to start up from scratch without the high debt load and industrial issues? Yes it takes time to get an AOC, startup etc... but now is the best time to do it as the market is pretty much non existant for the next 6-12 months anyways.

[Ragnor]

Originally Posted by ANstar

I wonder how many of these "serious bidders" have just used this as an opportunity to get access to the "data room" to see where the money is made and lost before walking away and using that data to start up from scratch without the high debt load and industrial issues? Yes it takes time to get an AOC, startup etc... but now is the best time to do it as the market is pretty much non existant for the next 6-12 months anyways.

That, would be smart of them. why buy an airline in the current environment QF and JQ will come back slowly. In the mean time they could start their own operation whilst confidence grows, and hey, there will be 100s of pilots keen and they will work for much less than what JQ pay just to get back in the game.

[chookcooker]

Originally Posted by Ragnor

That, would be smart of them. why buy an airline in the current environment QF and JQ will come back slowly. In the mean time they could start their own operation whilst confidence grows, and hey, there will be 100s of pilots keen and they will work for much less than what JQ pay just to get back in the game.

Well lucky for the rest of us your genius is wasted flying the line at QF, those fools at Deloitte and Clayton Utz wouldn’t stand a chance against your cunning prowess.