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FAQs for Scheme Members and Creditors of
Environinvest Ltd (Receivers & Managers appointed)
(in liquidation) (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;
(b)
carrying on the business of the company;
(c)
leasing or selling property; and
(d)
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 within the eucalypt industry, 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.
The relevant 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).
In addition, Environinvest appears to act as trustee or
manager of several unregistered schemes (refer below).
What will happen to my investment?
It will be at least several months before the growers
know what return (if any) they 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.
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 here 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 sought
orders, among others, that:
(e)
the Schemes be wound up pursuant to section
601ND(1) of the Corporations Act 2001 (Cth) (Act) or section
601NF of the Act; and
(f)
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, 31
October 2008, 24 November 2008, 3 December 2008 and 10 December 2008. Please click on this link to
view a copy of Mr Shepard's affidavits and each of the exhibits.
17 October 2008 Directions Hearing
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:
(g)
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
(h)
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 was otherwise listed for
further directions on 7 November 2008.
23 October 2008 Hearing
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 subsequently
determined that the projects which
were previously considered to be unregistered or 'private' (and which
spanned the years 1998, 1999 and 2000):
(i)
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;
(j)
cannot continue to operate independently of
the other projects which form part of PYEP;
(k)
may, in any event, themselves form part of
PYEP; and
(l)
if not part of PYEP, have been operating
without any written constitution or trust deed.
Accordingly, these additional projects were added to the
Winding Up Application as set out in the Proceeding. The additional projects are:
(m)
the 1998 BEP or Excluded Offer project;
(n)
the 1999 BEP or Excluded Offer project; and
(o)
the 2000 BEP or Excluded Offer project,
(Additional Projects).
Letters were 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 sought an order that the Winding Up Application be amended. The amendments sought were:
(p)
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
(q)
to amend the originating process to include
for the winding up of Additional Projects referred to above.
Please click on this link to
view a copy of the Amended Originating Process orders.
7 November 2008 Directions Hearing
The Winding Up Application was again returnable for
further directions on 7 November 2008.
Please click on this link to
view a copy of the Orders made by his Honour Justice Judd at the directions
hearing on 7 November 2008.
At the directions hearing on 7 November 2008, the Winding
up Application was fixed for trial on 26 November 2008 (as noted below,
this date has since been rescheduled to 4 December 2008). .
Receivers' Submissions
As required by the Orders, the receivers filed and served
their submissions on 21 November 2008.
Further submissions were filed by the receivers on 3 December 2008,
15 December 2008 and 18 December 2008.
Please click on this link to view a copy of each
of the receivers' submissions.
Application to adjourn Winding Up Application
On 21 November 2008, Brian Ward & Partners (who act
on behalf of a number of growers) advised that they would be seeking an
adjournment of the Winding Up Application.
The adjournment application was heard on 25 November 2008 at
12.00pm. Justice Judd ordered that
the Winding Up Application be adjourned to 4 December 2008. The hearing of the Winding Up application
spanned 4, 5, 8, 9, 10, 11 and 16 December 2008.
Judgment
On 12 February 2009, Justice Judd handed down his
judgment in the Winding Up Application.
A copy of the judgment is available on this link.
Orders
The orders of His Honour Justice Judd made on 23 February
2009 (Final Orders) are available on this link
Among other matters, the Court ordered that the Schemes
be wound up and a Scheme Liquidator be appointed.
Pursuant to the Final Orders, the Prothonotary was to
nominate an Official Liquidator from the Court roll to act as the 'Scheme
Liquidator'.
Scheme Liquidator
Appointment
Five (5) successive Official Liquidators were selected
from the Court role, all declined to accept the position of Scheme
Liquidator on the grounds of either a conflict of interest or placing a
burden on their firm. In light of the above, the Receivers sought to amend
the Orders to achieve their purpose of appointing a Scheme Liquidator,
On 30 April 2009 the Final Orders were amended (Amended Final Orders) to allow the
Scheme Liquidator costs to rank Pari Passu with the other parties involved
in bringing the proceedings. Jim Downey was nominated as Scheme Liquidator under
the Amended Final Orders and has accepted the appointment. The Amended Final
Orders are available on this link.
The Scheme Liquidator has been provided with the required
scheme information and is currently in the process of assessing his course
of action.
Appeal
Certain members who appeared in the Proceeding have
lodged a notice of appeal. A copy of
the notice of appeal is available on this link.
Once the Court of Appeal has made orders governing the
conduct of the appeal, an update will be provided on this website.
Who should I contact regarding my investment?
If you are a scheme member / investor / grower, we
suggest all queries should be directed to Jim Downey of J P Downey &
Co.
Contact details for Mr Jim Downey are as follows:
Phone: (03) 9642 2811
Email: email@jpdowney.com.au
How can I obtain further information?
Members can check the KordaMentha website for developments.
Please return to this website periodically to view any
updates. This website was last
updated on 08 May 2009
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