The matter
Aston Chace was appointed as receivers of six companies within the LJ Hooker Group, following the appointment of voluntary administrators. The secured creditor, who had issued a $42 million facility to the Group that was structurally subordinated to other secured creditors, appointed Aston Chace Group as receivers over a General Security Deed. It also sought to establish itself as a creditor of the primary operating entity.
The solution
Despite extensive legal proceedings, the voluntary administrators did not allow the secured creditor to prove as a creditor of the primary operating entity. Aston Chace then sought to enforce security against one of the entities and gain control of the franchise side of the LJ Hooker business through a Deed of Company Arrangement (DOCA) process that multiple turnaround funds and the company director were participating in.
The outcome
Competing DOCA proposals were put forward to recapitalise the business and bring it out of insolvency. The director subsequently gained control after obtaining support from the other secured creditor, whose debt was restructured with provisions to pay it down over a longer time period. Aston Chace’s strategy was then focussed on enforcing the security over one of the entities and legal proceedings.
