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The voluntary administrators appointed to CBL Corporation Limited have adjourned the creditor’s watershed meeting to keep the specialist insurer in voluntary administration.
On May 18, administrators Brendon Gibson and Neale Jackson of KordaMentha advised that they adjourned the meeting “as it became apparent that, at this point in time, there would be a voting stalemate in relation to the resolutions required to be put forward – either placing the company into liquidation or handing control of the company back to its directors.”
“While the necessary 75% of creditors by value would have supported the resolution to put the company into liquidation at this point in time, a majority by number would not have been achieved which would have caused the liquidation resolution to fail,” the administrators said. “Related party creditors were a factor.
“Correspondingly, the resolution to hand control of the company back to its directors would also have failed,” they added.
In a voluntary administration, at a meeting of creditors, resolutions must achieve 75% by value and 50% by number of creditor votes to pass.
In their statement, the administrators noted the move “to be in the creditors’ best interests in the circumstances.” They said actions outlined in the watershed report, which includes the recommendation to place CBL in liquidation, will continue. They also expressed intent to seek direction from the court on the related party creditor votes.
“The watershed meeting will now be held no later than July 02, or any date prior by giving all creditors no less than five working days’ notice of the proposed meeting date,” they added. “This only affects the CBL Corporation Voluntary Administration and not any other CBL group company.”
On February 26, Gibson and Jackson, of KordaMentha, were appointed as voluntary administrators. This came days after the High Court appointed interim liquidators to the group’s New Zealand arm CBL Insurance following a request from the Reserve Bank of New Zealand (RBNZ). It was later revealed that CBL Insurance breaching directions made by RBNZ prompted the regulator’s move against the company.
