HopgoodGanim advises on Jumbo deal
Deals | 31 March 2011 | The New Lawyer
Queensland law firm HopgoodGanim has helped Jumbo Interactive, creator of the Oz Lotteries website, "cut out the cancer" from an underperforming business. _x000D_
QUEENSLAND law firm HopgoodGanim has acted for ASX-listed technology company Jumbo Interactive, creator of the Oz Lotteries website, in successfully implementing a deed of company arrangement for its troubled subsidiary Manaccom, which had been placed into voluntary administration earlier this year.
The deed of company arrangement will allow priority creditors, including employees, to receive 100 cents in the dollar for debts owed. The remaining unsecured creditors will receive between 43 and 100 cents in the dollar, compared with an estimated two to eight cents had Manaccom gone into liquidation.
HopgoodGanim insolvency partner Paul Betros labelled voluntary administration an effective way for an otherwise financially-strong company to “cut out the cancer” and remove an underperforming subsidiary or business division while maintaining its overall health.
“This is a good example of a voluntary administration getting a result quickly and effectively, and represents a great outcome for all the stakeholders involved," he said.
Manaccom had been generating trading losses over several years, and its total unsecured debts are expected to exceed $7.8 million.
“We worked closely with Manaccom's administrators, Deloitte, to ensure we could generate the best possible return for Manaccom's unsecured creditors," said Betros.