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22 June 2018
Unlockd Limited (Administrators Appointed) ACN 169 872 502 (Unlockd Limited)
Unlockd IP Pty Ltd (Administrators Appointed) ACN 602 741 355 (Unlockd IP)
Unlockd AU Pty Ltd (Administrators Appointed) ACN 602 741 284 (Unlockd AU)
Unlockd Operations Pty Ltd (Administrators Appointed) ACN 608 719 375 (Unlockd Operations)
(together “Unlockd” or the “Group”)
Circular to all known creditors
Keith Crawford and I were appointed Administrators (Administrators) of Unlockd on 12 June 2018. On 20 June 2018
the Administrators made an urgent application to Court for approval for Unlockd Limited to loan money to Unlockd
Operations and to extend the convening period for the second meeting of creditors to 10 October 2018. A copy of
the originating process for this application is enclosed (Annexure A). The Court heard the application on 21 June
2018. On 22 June 2018 the Court made orders extending the convening period and permitting Unlockd Limited to
loan up to $500,000 to Unlockd Operations subject to certain conditions. A copy of the Court orders is also
enclosed (Annexure B).
Application to extend the Convening Period and the Court’s Order
The application to extend the convening period was made to allow time for the sale / recapitalisation campaign to
be completed and sufficient time for interested party/parties to submit a satisfactory Deed of Company
Arrangement proposal or other proposal for the sale or recapitalisation of Unlockd or its assets. The Court granted
this order and the period within which the Administrators must convene the second meeting of creditors of each of
the Companies has been extended by the Court to 10 October 2018 (Order 1 of Annexure B) which means the
meeting must be held not later than 17 October 2018, unless further extended by the Court.
Application to enable Unlockd Limited to loan money to Unlockd Operations.
The application to enable Unlockd Limited to loan money to Unlockd Operations was sought to permit the
Administrators to cause Unlockd Limited to make loans to Unlockd Operations to allow it to fund expenditure and
limit the Administrators’ personal liability for those loans to the extent that the assets of Unlockd Operations are
insufficient to repay them.
Unlockd Operations cash position
At the time the Administrators were appointed Unlockd Operations, had cash at bank of $86,690.76. In order to
fund the operation of Unlockd Operations for the period from the Administrators’ appointment to 6 July 2018 (in
part to preserve the value of the business and assets of Unlockd IP, Unlockd AU and Unlockd Limited) the
Administrators estimate that an additional amount of approximately $500,000 is required to meet necessary
expenditure to be incurred (on account of matters including staffing costs, rent, web hosting, IT subscriptions,
insurance, legal costs, other general operating costs, and administrators’ remuneration).
Best interests of all creditors of Unlockd
The Unlockd Operations expenses are being incurred for the benefit of all Unlockd entities due to the integrated
nature of the Australian business. The Administrators are of the view that loaning these funds between entities is in
the best interest of Unlockd creditors because it is likely to maximise and preserve the value of Unlockd’s assets.
The Court’s orders
The Court has made the following orders in respect of the loan as set out in Appendix B:
Order 3) The Administrators are justified and acting reasonably in procuring Unlockd Limited to
loan monies to Unlockd Operations for the purpose of payment by Unlockd Operations of
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any amounts in respect of which the Administrators would be entitled to be indemnified
out of the property of Unlockd Operation (Intercompany Administration Loan) (Order 3
of Annexure B).
Order 4) If the property of Unlockd Operations is insufficient to satisfy the debts incurred by the
Administrators in respect of any Intercompany Administration Loans, the Administrators
will not be personally liable, in their capacity as administrators of Unlockd Operations, to
repay such debts to the extent of that insufficiency.
Order 5) The funds to be loaned pursuant to order 3 above are not to exceed the sum of $500,000.
Order 6) The Administrators must not make any payments or transfer any funds the subject of the
Intercompany Administration Loans before 4 pm on Monday 25 June 2018.
Objections to the intercompany loans
The purpose of orders 6, 7(a) and 8 in Annexure B is to provide a measure of protection for creditors who might
wish to challenge those orders, by capping the quantum of the loan at $500,000 in the first instance, and preventing
the loans from being made until 4 pm on 25 June 2018, so as to afford any such creditor with the opportunity to
move the Court to vary or vacate these orders before then.
If you have any objection to, or questions in relation to, the proposed Intercompany Administration Loan you
should raise these with the Administrators in the first instance. If we are unable to resolve any objection that may be
raised, any creditor or person who can demonstrate sufficient interest to apply to the Court for an order discharging
or varying the orders in Annexure B can apply to Court before 4pm on Monday 25 June.
If you have no objection to the Intercompany Administration Loan no action needs to be taken in respect of this
letter.
If you have any queries regarding the above, please contact Emily Seeckts on (03) 9038 3100.
Yours Faithfully
Robert Smith
Administrator
Enclosures:
A. Originating process for this application
B. The Court order
Version: 4
Published: 28 AUG 2014
Form 2A
Rules 2.2 and 15A.3
IN THE SUPREME COURT OF VICTORIA AT MELBOURNE
COMMERCIAL COURT
REDCREST CORPORATIONS LIST
IN THE MATTER OF UNLOCKD LIMITED (ADMINISTRATORS APPOINTED) AND
OTHERS
ACN: 169 872 502
KEITH ALEXANDER CRAWFORD AND ROBERT BRUCE SMITH IN THEIR
CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF UNLOCKD LIMITED
(ADMINISTRATORS APPOINTED) ACN 169 872 502, UNLOCKD IP PTY LTD
(ADMINISTRATORS APPOINTED) ACN 602 741 355, UNLOCKD AU PTY LTD
(ADMINISTRATORS APPOINTED) ACN 602 741 284 AND UNLOCKD OPERATIONS
PTY LTD (ADMINISTRATORS APPOINTED) ACN 608 719 375 (and others according to
schedule 1)
Plaintiffs
ORIGINATING PROCESS–REDCREST (CORPORATIONS)
Date of document: 20/06/2018
Filed on behalf of: The Plaintiffs
Prepared by:
Herbert Smith Freehills
Lawyers
101 Collins Street Melbourne VIC 3000
Solicitor's Code: 420
DX: 240 Melbourne
Tel: (03) 9288 1234
Fax: (03) 9288 1567
Ref: 82667707
Case Manager: Siba Diqer
Case Manager Email: [email protected];
A. DETAILS OF APPLICATION
This application is made under sections 439A and 447A of the Corporations Act 2001 (Cth)
(Corporations Act) and division 90-20 of the Insolvency Practice Schedule to the Corporations Act
(the IPS).
This is an application for the Court to extend the period for the convening of the second meeting of
creditors of companies in administration, being the Second to Fifth Plaintiffs (together,
Companies) and for orders in relation to the funding of certain debts of the Fifth Plaintiff.
On the facts stated in the supporting affidavit, the Plaintiffs claim–
Case Number: S ECI 2018 00141Filed on: 20/06/2018 12:38 PM
ANNEXURE A: Originating process for this application
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Convening period
1. An order pursuant to section 439A(6) of the Corporations Act extending the period within
which the First Plaintiffs must convene the second meeting of creditors of each of the
Companies under section 439A of the Corporations Act to 10 October 2018.
2. An order pursuant to section 447A(1) of the Corporations Act that Part 5.3A of the Act
operate such that, notwithstanding section 439A(2) of the Act, the meeting of the creditors of
each of the Companies required by section 439A of the Corporations Act may be convened
at any time before the end of the convening period (as extended by Order 1) or within five
business days thereafter, provided that the First Plaintiffs give notice of any such meeting in
accordance with division 75-225 of the Insolvency Practice Rules (Corporations) 2016
(Cth).
Funding arrangements
3. An order pursuant to division 90-15 of the IPS that the First Plaintiffs are justified and acting
reasonably in procuring the Second Plaintiff to loan monies to the Fifth Plaintiff for the
purpose of payment by the Fifth Plaintiff of any amounts in respect of which the First
Plaintiffs would be entitled to be indemnified out of the property of the Fifth Plaintiff under
s 443D of the Corporations Act (Intercompany Administration Loans).
4. An order pursuant to section 447A(1) of the Corporations Act that Part 5.3A of the
Corporations Act is to operate as if section 443A(1) of the Corporations Act provides that, if
the property of the Fifth Plaintiff is insufficient to satisfy the debts incurred by the First
Plaintiffs in respect of any Intercompany Administration Loans, the First Plaintiffs will not
be personally liable, in their capacity as administrators of the Fifth Plaintiff, to repay such
debts to the extent of that insufficiency.
Other
5. An order that any person who can demonstrate sufficient interest may apply to the Court for
an order discharging or varying any of orders 1 to 4 above.
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6. An order that within 2 business days the First Plaintiffs cause notice of this Originating
Process and the orders made and reasons for the making of those orders to be given to the
creditors of the Companies by:
(a) placing copies of the said documents on the website maintained by the First Plaintiffs
at http://www.mcgrathnicol.com; and
(b) emailing the said documents to those creditors of the Companies who have provided
the First Plaintiffs with email addresses, or sending the said documents to those
creditors of the Companies by prepaid post.
7. An order that the costs of this application be costs and expenses in the administration of the
Second Plaintiff.
8. Such other orders as the Court considers appropriate.
Application Hearing Time Estimate:
0.5 days
Date: 20 June 2018
/s/ Herbert Smith Freehills
…………………………………………. Solicitors for the Plaintiffs
This application will be heard by on Thursday, 21 June 2018 at 10:30am in the Commercial Court
of the Supreme Court of Victoria at 210 William Street, Melbourne VIC 3000.
B. NOTICE TO DEFENDANT(S)
There is no defendant to this application.
This originating process has been filed electronically in the Court's Case Management System
known as RedCrest.
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If you or your legal practitioner do not appear before the Court at the time fixed by the Court, the
application may be dealt with, and an order made, in your absence. As soon after that time as the
business of the Court will allow, any of the following may happen–
(a) the application may be heard and final relief given;
(b) directions may be given for the future conduct of the proceeding;
(c) any interlocutory application may be heard.
Before appearing before the Court, you must file a notice of appearance in the prescribed form and
serve a copy of it on the Plaintiffs. The procedure for filing a notice of appearance is set out in
Schedule 2 below.
Note: Except with the leave of the Court, a defendant that is a corporation cannot appear at a
hearing otherwise than by a legal practitioner.
C. FILING
This originating process is filed by Herbert Smith Freehills for the Plaintiffs.
D. SERVICE
The Plaintiffs’ address for service is c/- Herbert Smith Freehills, Level 43, 101 Collins Street
Melbourne VIC 3000.
The name or firm and the business address within Victoria of the case manager legal practitioner for
the Plaintiffs is: Herbert Smith Freehills, Level 43, 101 Collins Street Melbourne VIC 3000.
Name of the case manager legal practitioner within the firm is: Siba Diqer
Individual email address of the case manager legal practitioner within the firm is:
[email protected]; [email protected]; [email protected].
Contact telephone number of the case manager legal practitioner is: (03) 9288 1234.
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It is intended to serve a copy of this originating process on the Australian Securities & Investments
Commission of Level 7, 120 Collins Street, Melbourne VIC 3000, pursuant to rule 2.8 of the
Supreme Court (Corporations) Rules 2013 (Vic).
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SCHEDULE 1
SCHEDULE OF PARTIES
Keith Alexander Crawford and Robert Bruce Smith in their capacity as joint and several
administrators of Unlockd Limited (Administrators Appointed) ACN 169 872 502, Unlockd IP Pty
Ltd (Administrators Appointed) ACN 602 741 355, Unlockd AU Pty Ltd (Administrators
Appointed) ACN 602 741 284 and Unlockd Operations Pty Ltd (Administrators Appointed) ACN
608 719 375
First Plaintiffs
Unlockd Limited (Administrators Appointed) ACN 169 872 502
Second Plaintiff
Unlockd IP Pty Ltd (Administrators Appointed) ACN 602 741 355)
Third Plaintiff
Unlockd AU Pty Ltd (Administrators Appointed) ACN 602 741 284
Fourth Plaintiff
Unlockd Operations Pty Ltd (Administrators Appointed) ACN 608 719 375
Fifth Plaintiff
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SCHEDULE 2
FILING AN APPEARANCE IN REDCREST
RedCrest
All documents to be filed in this proceeding must be filed in RedCrest unless the Court has
otherwise ordered in a particular case or unless documents cannot be filed in RedCrest because of
an impediment affecting RedCrest itself or affecting general access to RedCrest.
These Instructions
The Notice of Appearance is an important document. These instructions set out the basic steps for
filing a Notice of Appearance in RedCrest.
Self-represented persons – Filing a Notice of Appearance
A self-represented person who is served with an Originating Process–RedCrest and who wishes to
contest the claim must–
1. Complete the Notice of Appearance–RedCrest (Corporations) (Form 4A); and
2. Within the time stated in the Originating Process–RedCrest (Corporations), deliver the
Notice of Appearance to the Supreme Court Registry.
Assistance will be given by Registry staff to ensure that the Notice of Appearance is correctly
completed. Registry staff will then file the Notice of Appearance into the electronic file for the
proceeding. There will also be an instruction manual available at Registry for all users.
Persons Represented by a Solicitor – Filing a Notice of Appearance
A solicitor who is required to file a Notice of Appearance on behalf of a client must follow the steps
below. These are described in more detail in the online instruction manual available on the
RedCrest public homepage www.redcrest.com.au.
1. If you do not have a username and password for RedCrest, complete and submit the
application form available on the RedCrest public homepage at: www.redcrest.com.au
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("Username and Password Applications"), and await processing and email advice for the
assigned username and password. This will usually be provided within 24 hours (weekdays).
2. Assign your practitioner particulars to this case in accordance with the instruction manual.
3. Complete the Notice of Appearance–RedCrest (Corporations) (Form 4A) using the online
form available from the RedCrest public homepage.
4. File the Notice of Appearance in the case page file for the matter in the manner described in
the online instruction manual.
5. If, by virtue of an order of the Court you are not required to file the Notice of Appearance in
RedCrest or the Notice of Appearance cannot be filed in RedCrest because of an impediment
affecting RedCrest itself or affecting general access to RedCrest, then you must file a Notice
of Appearance–RedCrest (Corporations) (Form 4A) in paper form or such other form or
manner as the Prothonotary may allow at the Supreme Court Registry.
6. For further filings, follow the online instruction manual for the operation of RedCrest
available on the RedCrest public homepage www.redcrest.com.au.
Any Questions?
If you have any questions, please call the RedCrest Help Desk or contact the Supreme Court
Registry.
RedCrest Help Desk Contact Details: See RedCrest public homepage.
Supreme Court Registry Level 1, 436 Lonsdale St Melbourne, Tel: (03) 9603 9300, Hours. 9:30 am
to 4:00 pm each business day.
ANNEXURE B: The Court order