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  • BJ Jarrad Pty Ltd (In Liquidation)

    ACN 008 026 533 (BJ Jarrad)

    Jarrad Equipment Holdings Pty Ltd (In Liquidation)

    ACN 137 623 191 (JEH)

    Collectively the Companies

    Annual Report to Creditors

    As at 4 September 2015 in accordance with Section 508(1)(b)(ii) of the Corporations Act 2001 (the Act)

    22 October 2015

  • Annual Report to Creditors 22 October 2015

    Table of Contents

    Section Page

    1 Introduction ....................................................................... 1

    2 Annual meeting of creditors ............................................... 1

    3 Conduct of the liquidation to date ...................................... 2

    3.1 Liquidators acts and dealings to date ..................................... 2

    3.2 Liquidators realisations to date ............................................... 3

    4 Investigations into the Companies affairs ....................... 11

    4.1 Section 533 reports ............................................................... 11

    4.2 Litigation Funding .................................................................. 12

    4.3 Public Examinations .............................................................. 13

    4.4 Insolvent Trading or Other Claims......................................... 14

    4.5 Unfair preferences................................................................. 14

    4.6 Loan Account ........................................................................ 15

    5 Future conduct of the liquidation ..................................... 15

    5.1 Outstanding matters to be addressed ................................... 15

    5.2 Estimated completion of the winding up ................................ 16

    6 Estimate of return to creditors ......................................... 16

    7 Further queries ................................................................ 18

    Glossary of terms ............................................................ 19

    Annexure

    A Summary of receipts and payments BJ Jarrad Pty Ltd (In Liquidation)

    B Summary of receipts and payments Jarrad Equipment Holdings Pty Ltd (In Liquidation)

  • Annual Report to Creditors 22 October 2015| Page 1

    1 Introduction

    We refer to our appointment as Joint and Several Voluntary Administrators of the Companies on 31 July 2014 and to our subsequent appointment as Joint and Several Liquidators pursuant to resolutions passed at a meeting of creditors of the Companies held concurrently on 4 September 2014.

    Pursuant to Section 508(3) of the Act, we now take this opportunity to report to you on the liquidation of the Companies and, in particular, as to:

    An account of the Liquidators acts and dealings in the conduct of the winding up of the Companies from the commencement of the liquidation to date;

    The Liquidators acts and dealings that remain to be carried out to complete the winding up of the Companies;

    Estimated return to creditors from the winding up of the Companies; and

    An estimate of when the winding up of the Companies will be completed.

    As outlined at Section 4, our reports pursuant to Section 533 of the Act have been prepared and lodged with the Australian Securities and Investments Commission (ASIC) on 19 May 2015 detailing our findings in respect of our investigations into the affairs of BJ Jarrad and JEH, the conduct of the Director of both Companies and any breaches of the law. The reports are privileged and we cannot therefore provide creditors with a copy. However, we advise that no statement in this report is inconsistent with our Section 533 reports lodged with ASIC.

    ASIC subsequently requested that we submit a Supplementary Report pursuant to Section 533(2) of the Act for BJ Jarrad. The Supplementary Report will be issued to ASIC in due course. ASIC has advised us that it does not intend to take any action in relation to the matters raised in our JEH report.

    At this point in time, there are insufficient funds available to permit payment of a dividend to any class of creditor for either of the Companies. This is discussed further at Sections 3, 4 and 6 of this report. Any return to priority and / or non-priority unsecured creditors is solely dependent on the outcome of our investigations and successful recovery of voidable transactions which may be pursued by the Liquidators pursuant to Part 5.7B of the Act (discussed further at Sections 4 and 6 of this report).

    Given the matters discussed at Sections 4 and 5 of this report, we estimate a further two years or more may be required to finalise the winding up of the Companies.

    2 Annual meeting of creditors

    In accordance with the provisions of Section 508(4) of the Act, we advise that:

    Having regard to the current circumstances of the Companies, and in the interests of costs, we have decided not to convene an annual meeting of creditors for either of the Companies pursuant to Section 508(1)(b)(i) of the Act;

    We have prepared this report setting out an account of our acts and dealings and the conduct of the winding up for the Companies for the 12 months ended 4 September 2015, being the first 12 months of the liquidations; and

    We have lodged a copy of this report with ASIC.

    As previously advised, at the second meeting of creditors held in the Voluntary Administration period, the following creditors were elected to the Committee of Inspection (COI) for BJ Jarrad:

  • Annual Report to Creditors 22 October 2015| Page 2

    Creditor Represented by

    Civil Pipelines Australia Pty Ltd (Civil Pipelines) (1)

    Mr James Rankin

    Big Chief Hire Pty Ltd Mr Joe Tripodi

    Allused Pty Ltd Mr Gary Silcock

    Willmurph Pty Ltd trading as Flexable Force Mr Peter Murphy

    (1) We note that on 4 March 2015, Civil Pipelines was placed into Voluntary Administration creating a casual vacancy on the COI pursuant to Section 550(2) of the Act.

    Since the commencement of the liquidation, we have regularly consulted with the COI, including holding meetings of the COI on 26 September 2014, 1 May 2015 and 10 September 2015. Minutes of these meetings have been lodged with ASIC. With the approval of the COI on 10 September 2015 pursuant to Section 550(6) of the Act, the casual vacancy created by Civil Pipelines was filled by a representative of the Commonwealth of Australias Department of Employment (Commonwealth). This matter is discussed further at Section 4.2 of this report.

    3 Conduct of the liquidation to date

    3.1 Liquidators acts and dealings to date

    Since our appointment as Liquidators of the Companies, the following matters have been attended to:

    Concluded negotiations with interested parties in relation to a potential sale of the Companies assets and / or Work in Progress (WIP), however a sale was not able to be achieved;

    Finalising BJ Jarrads existing contracts with SA Water in order to maximise the recovery of debtors and WIP and return of bank guarantees;

    Liaising with SA Water, Adelaide Hills Council and Bardavcol in relation to the return of bank guarantees;

    Ongoing correspondence, telephone attendances and meetings with SA Water regarding completion of the WIP;

    Liaising with SA Water regarding handover of contracts, practical completion and the defects liability period;

    Liaising with SA Water regarding unpaid invoices raised during our administration of BJ Jarrad relating to the Balhannah/Verdun contract;

    Ongoing correspondence with Baulderstone Abigroup Joint Venture (BAJV) in relation to the Southern Expressway Subcontracts, including instructing solicitors in relation to an independent adjudication of BJ Jarrad claims against BAJV and subsequent negotiations with BAJV regarding settlement of the claims;

    Sale of the Companies plant and equipment by public auctions held in December 2014 and February 2015 and accounting to secured creditors in relation to same;

    Closure of the Companies head office in December 2014;

    Terminating all remaining employees of BJ Jarrad;

    Collection, listing and review of the books and records of the Companies;

    Liaising with former employees and the Commonwealth in relation to verification and distribution of amounts advanced pursuant to the Fair Entitlements Guarantee Act (FEG);

    Communicating with the secured creditor of BJ Jarrad and creditors with security interests in relation to JEH;

  • Annual Report to Creditors 22 October 2015| Page 3

    Communicating with unsecured creditors of the Companies;

    Communicating with the COI for BJ Jarrad (as indicated above);

    Detailed investigation into the affairs of the Companies and preparation and lodgement of our reports pursuant to Section 533 of the Act with ASIC;

    Liaising with solicitors in relation to pursuit of unfair preference claims;

    Reviewing draft letters of demand to recipients of unfair preference claims;

    Negotiating settlements with recipients of unfair preference claims including review and execution of settlement deeds (where applicable);

    Reviewing draft proceedings in respect of several unfair preference claims;

    Preparation of substantial legal brief and liaising with solicitors and Senior Counsel in relation to public examinations;

    Preparation of applications to litigation funders and subsequent negotiations and correspondence in relation to funding for the purpose of conducting public examinations and funding of potential claims that may arise thereafter;

    Commencing the public examination process in conjunction with our solicitors and Senior Counsel;