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FAQs for Scheme
Members and Creditors of Environinvest Ltd (Receivers & Managers
appointed) (Administrator appointed) (Environinvest)
What is
KordaMentha's involvement?
On 22 September
2008, Commonwealth Bank of Australia appointed Craig Shepard and Mark
Mentha of KordaMentha as joint and several receivers and managers of
Environinvest Ltd (Receivers and Managers Appointed) (in liquidation) (Environinvest).
What is
receivership?
Receivership is a
process where a person (the receiver or receiver and manager) is appointed
in respect of a corporation to take control of property, in order to
protect the rights of the party entitled to that property.
What is the
role of the receivers?
The role of the
receivers is to take control of and recover property for the benefit of the
secured creditor. The powers and
duties of receivers include, but are not limited to:
(a)
entering
into possession and control of the charged property;
(a)
carrying
on the business of the company;
(b)
leasing
or selling property; and
(c)
doing
all things which the company is empowered to do.
Appointment of
Administrator/Liquidator
On 19 September
2008, Mr James (Jim) Downey was appointed as administrator of Environinvest
by the directors of Environinvest.
On 24 October
2008, the creditors of Environinvest voted to place the company into
liquidation. Jim Downey was
appointed as liquidator of Environinvest.
What is
liquidation?
Liquidation is a
process whereby the assets of a company are collected and realised by the
company's liquidator, the resulting proceeds are applied in discharge of
debts and liabilities, and any balance which remains after paying the costs
and expenses of the winding up is distributed among the members.
What happens
when an administrator and receivers are appointed concurrently?
Provided that the receivers
are appointed within the timeframe stipulated by the Act, the
administrator's functions and powers are subordinate and subject to the
rights of the receivers to deal with the company's property and to the
exercise of the receivers' functions, powers and authorities.
What is
Environinvest's role in relation to managed investment schemes?
Environinvest
manages various projects that were established as managed investment schemes.
Each project has its own members, sometimes referred to as investors or
growers.
Environinvest is
responsible entity of several registered schemes, and in that role has
responsibility for the operation and administration of the schemes. Each scheme is governed by its own
constitution and by Chapter 5C of the Act.
In addition,
Environinvest appears to act as trustee or manager of several unregistered
schemes. Each scheme is governed by its own deed, and may be subject to
Chapter 5C of the Act, if it was required to be registered, or old laws
governing prescribed interest undertakings.
Who should I
contact regarding my investment or debts?
If you are a
scheme member / investor / grower, all queries in relation to the schemes
should be directed until otherwise notified, to the receivers.
If you are a
creditor of Environinvest, including for any goods or services supplied for
use in connection with the schemes, all queries should be directed to the liquidator .
What happens
now?
In the past few
months, Environinvest has been negotiating a sale of the land upon which
three schemes operate, together with the trees growing on the land. The schemes are:
·
Primary Yield
Eucalypt Project ARSN 093 575 270;
·
Primary Yield
Eucalypt Project No. 7 ARSN 108 736 705; and
·
Primary Yield
Eucalypt Project No. 9 ARSN 117 062 601,
(collectively, the Schemes).
Environinvest has
stated that due to extenuating circumstances (in particular, drought
conditions) it is necessary to sell the trees before they reach
maturity.
The receivers will
likely continue the sale process.
The receivers anticipate that finalising any sale process will take
at least two months. The receivers
also intend to seek directions from the Court in relation to the Schemes,
including an order for the winding up of the Schemes.
For the other
schemes, the receivers will prepare a 'fact sheet' noting the current
status of each of the schemes before reverting to the liquidator and/or
ASIC to discuss the appropriate steps forward. .
What will happen to my investment?
It will be at
least two months before the receivers know what return (if any) scheme members
in relation to specific projects may receive on their investment. Returns (if any) will most likely vary
between schemes as the assets and liabilities of each scheme and those of
Environinvest are separately held and identified.
What are my
rights if I owe money to Environinvest in its capacity as responsible
entity of the schemes?
If you owe money
to Environinvest (in its capacity as responsibility entity or trustee or
manager of any of the schemes) in respect of your investment, you are not
entitled to vote at meetings of members.
However, you may repay the amount owing to Environinvest prior to
any meeting in order to have your voting rights restored.
This is important
because the receivers may ultimately, for each scheme, call a meeting of
its members and invite members to wind up the scheme and pass any other
necessary or ancillary resolutions.
1 October 2008
Court orders
The receivers made
an urgent application to the Supreme Court of Victoria on Wednesday 1
October 2008, to obtain directions regarding insurance of trees in
relation to the three tree Schemes referred to above. Please click on this link to view a copy of the Court's orders.
Winding Up
Application
The receivers
filed a further application with the Supreme Court of Victoria on Tuesday
14 October 2008 in respect of the Schemes (Winding Up Application).
By way of summary,
the Winding Up Application seeks orders, among others, that:
(a)
the
Schemes be wound up pursuant to section 601ND(1) of the Corporations Act
2001 (Cth) (Act) or section 601NF of the Act;
(b)
the
receivers cause Environinvest to conduct the winding up of the Schemes, or
the receivers be appointed to conduct the winding up of the Schemes; and
(c)
the
receivers are entitled to be indemnified out of Scheme assets in respect of
the costs, expenses and remuneration incurred in effecting the windings up,
or causing Environinvest to effect the windings up and in respect of the
Application.
Please click on
this link to view a copy of the receivers' Winding
Up Application.
The Winding Up
Application is supported by affidavits sworn by Craig Peter Shepard on 14
October 2008, 16 October 2008 and 31 October 2008. Please click on this link to view a copy of Mr Shepard's affidavits
and each of the exhibits.
The Winding Up Application
was first returnable for directions on 17 October 2008 at 10.00am. At the hearing on 17 October 2008, the
Court made orders, among others that:
(a)
that
by 20 October 2008, the receivers send by ordinary prepaid post to
each member (at the address recorded on the member registers for each
Scheme) a notice regarding the intended Application. Please click on this link to view a copy of the
Notice; and
(b)
by 31
October 2008, any member who seeks to appear in the proceeding is to file
and serve on the solicitors for the plaintiffs a Notice of Appearance in
Form 4 of the Corporations Rules 2003 (Vic).
The Winding Up Application
is listed for further directions on 7 November 2008.
The Application has been
served upon, among others, ASIC, Environinvest's liquidator,the receivers
and managers of Primary Yield Finance Pty Ltd (receivers and managers
appointed) (liquidator appointed), and solicitors representing several
groups of Growers.
23 October 2008
Court orders
The receivers made
a further urgent application to the Supreme Court of Victoria on Tuesday 21
October 2008, to obtain directions regarding the spraying of trees
and general fire prevention in relation to the three tree Schemes referred
to above. The application was
returnable on 23 October 2008.
Please click on this link to view a copy of the Court's
orders.
Additional
Scheme Members
The
Receivers have recently determined that certain tree projects which were
previously considered to be unregistered or 'private' (and which spanned
the years 1998, 1999 and 2000):
(a)
have
been operated and managed by Environinvest in conjunction with other projects
that form part of Primary Yield Eucalypt Project ARSN 093 575 270 (PYEP)
being one of the Schemes which is the subject of the Winding Up
Application;
(b)
cannot
continue to operate independently of the other projects which form part of
PYEP;
(c)
may,
in any event, themselves form part of PYEP; and
(d)
if
not part of PYEP, have been operating without any written constitution or
trust deed.
Accordingly, in all of the
circumstances, these additional project are now also the subject of the Winding
Up Application as set out in the Proceeding. The additional projects are:
(a)
the
1998 BEP project;
(b)
the
1999 BEP project; and
(c)
the
2000 BEP project,
(Additional
Projects).
Letters have been
sent to each of the relevant Growers advising them of this development and
inviting them to file a notice of appearance by 6 November 2008, should
they wish to be heard in respect of the Winding Up Application.
Variation to
the Winding Up Application
At the directions
hearing on 7 November 2008, the Receivers will be seeking an order that the
Winding Up Application be amended.
The amendments sought will be:
(a)
to
seek all costs reasonably incurred by the Receivers in causing
Environinvest to perform or in otherwise supporting the role of responsible
entity of the Schemes the subject of the Proceeding; and
(b)
to
amend the originating process to include for the winding up of Additional
Projects referred to above.
How can I
obtain further information?
Members can check
the KordaMentha website for developments.
Creditors should
contact the liquidator, Mr Jim Downey as follows: email@jpdowney.com.au
Please return
to this website periodically to view any updates. This website was last updated on 3
November 2008
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