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15-368MR Failed land banking company Midland Hwy to be wound up following ASIC action
The Federal Court of Australia has made orders to set aside a resolution made by creditors of Midland Hwy Pty Ltd ACN 153 096 069 (administrators appointed) (Midland Hwy) on 21 October 2015 to enter into a deed of company arrangement (DOCA) and for Midland Hwy to be wound up. The DOCA had been proposed by Bilkurra Investments Pty Ltd.
Nicholas Martin and Craig Crosbie of PPB Advisory have been appointed as the liquidators of Midland Hwy.
ASIC sought the wind-up orders as it considered it in the public interest for a proper investigation into the affairs of Midland Hwy to be conducted by independent liquidators (refer: 15-338MR).
In his judgment, his Honour Justice Beach found that the public interest required the winding up of Midland HWY, "particularly where there is no intention for any part of the business of Midland to be salvaged".
His Honour said: 'There is nothing concerning Bilkurra's financial position or status that would give me or the option holders any confidence that the project will proceed to completion. Moreover, the project appears to now be in the hands of entities and persons implicated in the very transactions under which $24 million of option holders' funds have been siphoned off in shadowy circumstances and through the use of phantom like corporate structures.'
ASIC Commissioner Greg Tanzer said that: 'This outcome demonstrates ASIC's commitment to ensuring that DOCA arrangements proposed to be entered into under the Act are not used as a means to avoid proper investigation and scrutiny by independent persons.'
Download the judgment [link]
Midland Hwy was the developer of a land banking scheme known as 'Hermitage Bendigo' (formerly 'Acacia Banks'), located just outside of Bendigo, Victoria and was put into administration on 2 July 2015. At the second creditors' meeting of Midland Hwy held on 21 October 2015, creditors voted in favour of the DOCA despite the Administrators recommending the company be put into liquidation.
ASIC commenced proceedings in the Federal Court to set aside the DOCA on 23 October 2015 (refer: 15-338MR).
ASIC’s proceedings are part of ASIC's wider and ongoing investigation into land banking schemes (refer: 15-214MR).
ASIC previously resolved proceedings against Midland Hwy to remove Mr David Anthony Ross and Mr Richard Albarran of Hall Chadwick as the administrators (refer: 15-203MR).