ob体育

ob体育 has applied to the Federal Court of Australia for the appointment of provisional liquidators to Aviation 3030 Pty Ltd (Aviation) related to that company鈥檚 operation of a property investment scheme involving land at Point Cook, Victoria.

ob体育 is seeking:

• the appointment of George Georges and John Lindholm of Ferrier Hodgson as provisional liquidators of Aviation; and
• orders requiring the provisional liquidators to provide a report to the court which sets out, among other things, the identity of Aviation investors (which includes shareholders and unitholders), the financial position of Aviation, and an opinion as to the validity of the issue of 63% of shares in Aviation to a director and former director.

The grounds of ob体育鈥檚 application include that:

• there is a justifiable lack of confidence in Aviation鈥檚 management;
• Aviation issued shares without a prospectus when one was required; and
• the Aviation scheme is an unregistered managed investment scheme which was required to be registered with ob体育.

ob体育鈥檚 application has been listed for hearing in the Federal Court of Australia in Melbourne on 27 September 2018 at 10:15am.

Once the provisional liquidators鈥� report has been provided to the Court, ob体育 will consider whether it should seek orders from the Court for the winding up of Aviation and the managed investment scheme it operates through five separate trusts (the Aviation scheme). ob体育 will also consider whether to seek orders to wind up all of the trustee companies involved in the Aviation scheme, each of which are controlled by Aviation directors, as follows:

1.聽聽聽聽聽 Aviation3030 Investment Pty Ltd

2.聽聽聽聽聽 Aviation3030 Holdings Pty Ltd

3.聽聽聽聽聽 Aviation 3030 Heng Ly Pty Ltd

4.聽聽聽聽聽 Point Cook Aviation3030 Pty Ltd

5.聽聽聽聽聽 Aviation 3030 HL Pty Ltd.

Background

Aviation purchased property at Point Cook for $7.8 million in 2011 with a view to rezoning the property to increase its value. To facilitate the purchase and rezoning of the property, Aviation raised around $10.59 million from approximately 73 shareholders and unitholders. On 13 September 2012 the Aviation property was rezoned from Green Wedge Zone to Farming and appears to have significantly increased in value.

On 6 July 2018 Aviation entered into a contract for the sale of the land at Point Cook. This contract was formally terminated on 17 August 2018 and ob体育 is not aware of there being any current sale contract.

Previous ob体育 action

ob体育 has previously, in 2016, issued court proceedings against Aviation to limit the ability of Aviation to deal with the proceeds of the sale of the Aviation property, pending further disclosures being made to investors about a share issue in 2016 to companies owned by a director and former director, and an opportunity to obtain independent advice concerning their investments (refer: 16-326MR).

By agreement with ob体育, Aviation provided corrective disclosure to investors in September 2016 about the 2016 share issue to companies owned by a director and former director. The freezing order was vacated when it became apparent that the sale would not then proceed.

Editor's note:

At the first case management hearing on 27 September 2018 the Court directed that:

• ob体育鈥檚 application to appoint provisional liquidators to Aviation 3030 Pty Ltd be listed for hearing on 29 October 2018 with an estimate of 5 days;
• Lao Holdings Pty Ltd and Khay Suong Taing Aviation 3030 Pty Ltd be joined as intervenors; and
• the Defendants and the Intervenors serve their evidence by 24 October 2018.

Editor鈥檚 note 2:

On 4 October 2018, the Court ordered that Aviation must not deal with its assets in any way unless it has provided聽two business days prior written notice to ob体育, with two exceptions:

• for the incurring of reasonable legal expenses; and
• entering into a transaction for an amount less than $50,000 individually or $100,000 in aggregate over a seven day period.

Editor's note 3:

Following the commencement of ob体育鈥檚 proceedings, on 25 October 2018 Aviation聽entered into a new contract to sell its only significant asset, which is the land at Point Cook (sale contract).

At ob体育鈥檚 request, on 29 October 2018, Aviation and its lawyers provided two sets of undertakings to the Court. The first set of undertakings (by Aviation and its lawyers) covers the proceeds of the sale contract. These proceeds are required to be kept in a trust account maintained by Aviation鈥檚 lawyers, and ob体育 is to be provided with weekly statements. In the second set of undertakings, Aviation has provided undertakings to the Court in relation to Aviation鈥檚 future expenditure. In summary (and until the final hearing), ob体育 is required to be given five聽days' notice of all expenditure unless:聽

• that expenditure is less than $25,000 individually (or聽$50,000 in aggregate over 7 days); or
• it is in relation to legal fees for the litigation聽being undertaken by Aviation; or
• it is necessary for the sale contract; or
• it is to meet the costs of the agents instructed to聽sell Aviation鈥檚 land. 聽

In light of these undertakings, ob体育 agreed to further orders being made by the Court on 29 October 2019 (to which Aviation consented) which have provided that:聽

• ob体育鈥檚 application for provisional liquidation be聽adjourned; and that
• ob体育鈥檚 applications for the winding up of Aviation and聽the managed investment scheme it operates be listed for hearing on 25聽February 2019, with an estimated duration of聽five days.

The Court has also ordered that an investor group, represented by HWL Ebsworth, be joined to the proceedings.

Editor's note 4:

The hearing of ob体育鈥檚 applications聽to wind up聽Aviation and聽the managed investment scheme it operates has concluded and judgment has been reserved.