The decision to liquidate the Australian Institute of Professional Photography was made at a 13-minute meeting of creditors on December 21, 2021 chaired by the Administrator, Mathew Gollant (CJG Advisory).
There were only four creditors entitled to vote at the ‘Second Meeting of Creditors’: The ATO was an unsecured creditor seeking $15K; plus three AIPP employees each owed small amounts. As well as being Chair for the meeting, Adminstrator Mathew Gollant acted as Special Proxy for the ATO, voting under its instructions. The four creditors combined to unanimously pass a series of motions, among which was the following:
‘That the company be wound up and Mathew Gollant be appointed as liquidator.’
According to the minutes of the meeting, director Les Morrison was present, while the rest of the Board attended via Zoom. Employees Mathew Palmer (owed $667), Jennifer Barnett ($518) and Sheryn Ellis ($520) attended but its not clear from the minutes whether that was in person or via Zoom.
Against the $164K in the bank, the AIPP owed $15K to the ATO as an unsecured creditor, according to Mathew Gollant, and around $1600 to the three employees.
Even though the AIPP had more than enough in the bank to cover these debts, they remained unpaid, which led via the Voluntary Administration process to the creditors having the right to decide the fate of the venerable professional photographers’ association.
After the AIPP Board – Les Morrison, Joshua Holko, Benjamin Kopilow, David Simmons, Felisha Mina, Geoff Comfort, and Louise Bagger – decided to put the AIPP into Voluntary Administration, there were three options to resolve the administration:
1. The directors could have come back to the administrator with a ‘Deed of Company Arrangement’:
A deed of company arrangement (DOCA) is a binding arrangement between a company and its creditors governing how the company’s affairs will be dealt with — and is agreed to after the company enters voluntary administration. The DOCA is generally proposed by the director (or any third party) and is administered by a deed administrator (usually the registered liquidator who was the voluntary administrator). The DOCA aims to:
– maximise the chances of the company, or as much as possible of its business, continuing, and/or
– provide a better return for creditors than an immediate winding up of the company. – ASIC
The Administrator recommended against this option because ‘no DOCA proposal has been received from any party’ (generally this would come from directors intent on saving their organisation). He continues, ‘Without a formal proposal it is impossible for me to recommend that creditors accept a DOCA proposal’.
2. End the voluntary administration and return the company to the directors’ control.
This option is open to creditors ‘if it appears the Company is solvent’, (which the administrator concedes it was) ‘or for some other reason control of the Company should revert to its directors.’
The Administrator recommended against this option because, ‘the company would be in the same position as faced prior to placing the Company into administration.’ (That is, with some challenges, but also with $16.5K in debts and $164K in the bank. But perhaps more importantly, a Board which had concluded that there was no viable future for the organisation it administered. )
3. That the Company be wound up and Mathew Gollant be appointed as Liquidator.
The Administrator recommended this option because there was no DOCA proposal. ‘Without a DOCA proposal I believe it is in the best interest of creditors for the Company to be placed in liquidation which will allow a dividend to occur, paying creditors in full.’
The Administrator elsewhere notes that ‘the realisation of assets and distribution of proceeds to creditors will proceed in the form of a liquidation rather than in the form of an administration.’ That is, creditors would have been paid in full without the liquidation being enforced.
‘The Chairperson advised that the special proxy from the ATO directed him to vote for the resolution. The Chairperson declared the resolution on the voices was passed unanimously.’
There were a range of other resolutions, mainly related to levels of remuneration for Administration and Liquidation (after which the Administrator estimated is that the former AIPP will have something between $46 and $86K in surplus funds.)
One further resolution which may be distressing to former AIPP members was Resolution 6:
That the creditors direct the Liquidator to apply to ASIC when appropriate or upon finalisation of the liquidation for consent to destroy the books and records within the retention period in accordance with IPS 70-35.
This was also passed unanimously by the creditors.
The article above has been compiled from the following two documents, sourced (at some cost) from ASIC. The Administrator, CGJ Advisory, has provided minimal assistance to our attempts to report to the professional photography community on the voluntary administration and liquidation of their association.
Administrators Report 10 Dec
AIPP Creditors Meeting, Dec 21