G+T has advised Stewart McCallum and Adam Nikitins of Ernst & Young in their capacity as voluntary administrators of certain entities within the Sargon Group (Sargon) in respect of the sale of their business and assets to the Cloverhill Group, which completed on 4 May 2020. Sargon owned and operated businesses in the financial planning, corporate trustee, responsible entity, superannuation and related financial services sectors.
The sale included shares in operating subsidiaries which continued to operate with independent boards and were not under external administration, including CCSL Limited, Diversa Trustees Limited and Tidswell Financial Services Limited. The sale was conducted on an accelerated timeframe to preserve regulatory licences, minimise disruption to operations continuing on a business as usual basis and address the entities’ urgent insurance and funding requirements.
The matter was led by Restructuring + Insolvency partner Peter Bowden, with assistance from lawyers Anna Schwartz, Talia Lirosi, Becci Robinson and Sarah McArthur and graduate Madelaine De-ludicibus, who each played an instrumental role in completing the transaction. The Restructuring + Insolvency team was supported by key members of Gilbert + Tobin’s corporate, intellectual property and tax teams, including partners Craig Semple, Michael Williams, Lisa Lennon, Muhunthan Kanagaratnam and Hanh Chau and lawyers Anna Smyth, Joanna Tsaprounis, Alina Sedmak and Matthew Charman.
The sale was complex and challenging in many respects, particularly given the state of the market, the prevailing risks associated with the COVID-19 pandemic and the extremely limited market for this business and assets.
The transaction required engagement and negotiations with a large number of stakeholders, including external administrators appointed to other parts of the Sargon Group, the independent boards of the operating subsidiaries, secured creditors, unsecured creditors and parties claiming ownership and/or security rights in respect of the assets the subject to the sale. Engagement with regulators, securing regulatory approval for the sale and putting in place urgent insurance arrangements were also key facets of the process, as was ongoing management and resolution of issues deriving from Sargon’s complex intra-group arrangements.
Despite extensive negotiations with various third parties whose consent or participation was required to effect a consensual sale to Cloverhill, the administrators were ultimately required to make an urgent application to the Federal Court of Australia to enable the sale to proceed within the time constraints. The application was heard before the Honourable Justice O’Bryan and on 1 May 2020 his Honour granted leave for the sale to proceed.
Amongst other things, the successful sale provides for continuing employment for all of the relevant entities’ employees (approximately 100 in total) and stability for the $15.5 billion worth of superannuation funds under management and in excess of 230,000 superannuation fund members.
Peter Bowden commented “I am delighted that we were able to achieve this sale for the administrators and the stakeholders of Sargon in extremely complex circumstances and an accelerated timeframe for completion. The outcome is a true testament to the strength of Gilbert + Tobin across multiple practice groups and how we work tirelessly to obtain exceptional results for our clients”.
Gilbert + Tobin’s Restructuring + Insolvency team is recognised by all major legal directories. Gilbert + Tobin was awarded Restructuring & Insolvency Law Firm of the Year (Australia) 2020 by Global Law Experts and won Insolvency & Restructuring Deal of the Year at the 2019 Australasian Law Awards.