JW Mailing Services - Case Update

The Court has rejected a request by the Deed Administrators of JW Mailing Services to bless an amended DOCA for the company after its sole shareholder and DOCA proponent varied the terms of payment. The Sydney-based advertising company entered administration in 2021. Under the terms of a DOCA approved by the company’s creditors, the shareholder was to pay all unsecured creditors of the company in full, as well as any unpaid remuneration and disbursements of the administrators. The shareholder sought to vary the DOCA to cap payments to unsecured creditors to 50 cents in the dollar and to limit the administrators’ additional remuneration and disbursements to $65,000. Deed administrators Mitchell Ball and Domenico Calabretta of Mackay Goodwin recommended the amended DOCA to creditors on the basis that seeking to enforce the original DOCA would likely result in additional legal costs, the administrators would not fund the litigation, their solicitors would not undertake the work on a speculative basis and litigation funders were not willing to fund it. The creditors passed a resolution to enter into the amended DOCA. However, the Court refused to make the orders requested by the deed administrators, stating: “The orders in large part seek to bootstrap the obligations of the Amended DOCA by embodying those obligations in Court orders or otherwise to make specific orders in respect of matters that would result from the operation of the relevant provisions of the Act.” As a result, the Court found that it would be inappropriate to make the orders sought, but made clear that the deed administrators are not precluded from commencing other proceedings in relation to the amended DOCA should it become necessary to do so. Read the decision here.