Momenta Resourcing and Momenta Associates - Case Update

The joint administrators of Momenta Resourcing and Momenta Associates have provided a report on the reasons behind the collapse of the contingent workforce provider, as well as their recommendations that creditors accept a DOCA proposal from Momenta Acquisitions, the UK parent. The Momenta Group provides resourcing solutions across six countries, with most of its operations conducted in Australia (through Momenta Resourcing and Momenta Associates) and the UK. The companies’ failure was caused by, among other things, the Commonwealth Bank of Australia’s decision to offshore the financial crime team roles to India, resulting in one of Momenta Resourcing’s largest and longest-running projects ending and an 85% reduction in the number of people working for the companies in Australia today. After their appointment as joint administrators on 1 December, Michael Fung, Melissa Humann and Rebecca Gill of PwC continued to trade the business as usual and sought expressions of interest. The joint administrators were advised that a sale appeared unlikely due to Momenta’s revenue relying almost exclusively on one customer contract and the presence of a secured creditor who would need to agree to release its security in the event of a third-party bid. Ultimately, the administrators received a DOCA proposal from Momenta Acquisitions, which contemplates the continued trading of the companies and the retention of all staff, the payment of a £60,000 contribution, resulting in an expected dividend of just over 2 cents in the dollar for unsecured creditors, and the forgiveness and assumption of various intercompany debts. The administrators have recommended that creditors accept the proposal. The second meeting is scheduled for 10 January.