Camelia Grove Hotel - Case Update

Two sets of insolvency practitioners appointed to Jon Adgemis’ embattled Public Hospitality Group are at odds over one of the hotels falling under his umbrella.

When Mr Adgemis’ businesses entered voluntary administration in September, he owned the Camelia Grove Hotel (the “Hotel”) and the adjacent property (which included a cool room used for the Hotel restaurant and a bottle shop). These two properties were financed by different lenders, leading to different sets of insolvency professionals being appointed.

Duncan Clubb and Andrew Sallway of BDO were appointed voluntary administrators (the “Administrators”) of various companies involved in the Hotel operations, while Richard Albarran and Kathleen Vouris of Hall Chadwick were appointed receivers and managers (the “Receivers”) of the adjoining property.

Following their appointment, the Receivers took steps to take possession of the adjoining property, including the cool room and the bottle shop used by the Hotel, by erecting a wire fence around the property and posting a notice of possession.

The Administrators urgently sought orders requiring the Receivers to remove the fence, arguing that the Receivers’ steps in erecting the fence had contravened s 440B of the Corporations Act 2001 (Cth), which provides that an owner of property "used by" a company that is in administration cannot take possession of the property without the administrator’s consent or leave of the Court.

The Court ultimately found that the Administrators had at least a seriously arguable case and likely a strong case that these steps had contravened s 440B, and ordered the Receivers to remove the notices of possession and wire fencing. The Court also restrained the Receivers, until the date of the final hearing, from taking possession of or otherwise restricting the Administrators’ access to the adjoining property.

The decision can be found here.

Professionals involved:

• Counsel for the Administrators: Shelley Scott of University Chambers

• Solicitors for the Administrators: William James

• Counsel for the Receivers: B Payne (Solicitor)

• Solicitors for the Receivers: Ronayne Owens Lawyers

• Counsel for the Interested Party: Emma Beechey of New Chambers

• Solicitors for the Interested Party: Clayton Utz