Keybridge Capital (ASX:KBC) - Case Update

The Supreme Court of New South Wales has ordered that the voluntary administration of Keybridge Capital (ASX:KBC) be brought to an end under section 447A of the Corporations Act 2001 (Cth), finding the company solvent following the offer of a bridge funding facility by its largest shareholder WAM Active (ASX:WAA).

We recently wrote about how the Court upheld the administrator’s appointment following a challenge by WAM. The Court also invited submissions on ending the administration, noting that a funding facility offered by WAM may be able to restore Keybridge’s solvency. Now, the Court has ruled that this facility, backed by substantial assets and available cash from WAM and its affiliates, was sufficient to establish that Keybridge could meet its debts as they became due.

Certain directors of the company and one of its subsidiaries, chocolate and toy company Yowie Group (ASX: YOW), opposed the termination of the administration, raising numerous new concerns late in the process, including challenges to the independence of Keybridge’s current directors and the adequacy of WAM’s offer. The Court did not uphold these objections, finding them to be either procedurally improper or substantively unconvincing, and noting they were raised too late or without supporting evidence.

The Court emphasised that continuing the administration of a solvent company would not serve the objectives of Part 5.3A of the Corporations Act, and found no reason to doubt that the funding facility would be finalized and implemented or that Keybridge would be able to repay the funding through a combination of capital raising and asset realization. As a result, the administration was terminated, restoring control of Keybridge to its reconstituted board, which included directors supported by WAM.

Read the decision HERE.

Professionals involved:

• Daniel Krochmalik of 3 St James' Hall Chambers and David Monteith of Banco Chambers (instructed by Mills Oakley) for WAM and the other plaintiffs

• Gideon Gee of New Chambers (instructed by Tisher Liner FC Law) for Keybridge and the administrator

• Andrew Broadfoot KC of Dever’s List and Andrew Byrne of 7 Wentworth Selborne of Sixth Floor Selborne Wentworth Chambers (instructed by Cornwalls) for Mr Bolton, Mr Patton and Richard Dukes

• Jonathan Burnett of Eleven Wentworth for Frank Catalano

• David Weinberger of 9 Wentworth Chambers (instructed by KCL Law) for Yowie Group