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A judge has weighed in following yesterday’s news that Magnolia would be appointing voluntary administrators to The Agency.
An injunction hearing was held today in the Federal Court of Australia to consider the appointment of administrators to The Agency Group Pty Ltd by Magnolia.
In the Perth hearing, Justice Colvin ordered that the purported appointment of BDO as voluntary administrator would have no effect at this point in time (barring various technical matters) — effectively restraining BDO from acting in any capacity as voluntary administrator.
This injunction also means that until the proceedings are completed, or any other order is provided, control of The Agency is to remain in the hands of the directors.
The court also ordered that the administration — or purported administration — will end at 4pm on 1 February 2021. At this point in time, a hearing has been scheduled for 9.15am (AWST) on that date to allow for applications to discharge or vary orders to end the purported administration.
Magnolia had suggested it had lost confidence in the company’s board and alleged an “unknown” financial position as reasons for the appointment — in pursual of what it called an outstanding secured debt.
Later in the day, Magnolia had said it would be withdrawing its plans to bid for shares in the business as a result of the voluntary administrator appointment — despite never gaining shareholder approval for the plan in the first place.
REB understands that The Agency’s position is that the alleged appointment by Magnolia — a company controlled by former The Agency director Mitchell Atkins — was a misguided attempt to destabilise The Agency and force the company into paying a disputed and undeserved fee, not a debt.
The Agency has revealed that the purported appointment was based on an alleged and disputed “debt” of approximately $385,000.
This amount, according to The Agency, was related to alleged fees on a financing mandate Magnolia had not delivered any funding on.
REB also understands that The Agency considers itself to be in a strong financial position, with recent AGM results demonstrating overwhelming support for the Peters Proposal moving forward.
It’s worth noting that day-to-day operations of the business, network offices and clients of the business are not impacted by the voluntary administrator proceedings in any way.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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