ABC Learning Centres, is one of the largest and most complex receiverships in Australia's corporate history, involving a unique restructure of the business before its sale and cross-border issues.
At the start of the receivership, ABC operated over 1,000 childcare centres in Australia. This included a number of centres that were underperforming under ABC's business model. We advised the receivers in a unique restructure, which involved transferring 262 centres to a new entity, ABC2, to which the Australian government had receivers appointed by the court. ABC2 sold those businesses to other operators.
The sale of ABC2 enabled ABC to restructure its operations and return it to profitability. After a period of trading, the majority of the ABC Australian business was sold to a special purpose vehicle set up by a number of prominent charities. The sale has involved dealing with a number of key stakeholders including employees, unions, landlords and government, and the resolution of licensing issues across all Australian states and territories.
As ABC had significant childcare operations in NZ, USA, UK and a smaller interest in childcare Centres in Canada, some significant and complex cross-border issues have evolved.
Henry Davis York has assisted the receivers of ABC on a number of cross-border issues.
ABC's UK business, Busy Bees Group, was held and financed through a cross-border tax effective structure which complicated the enforcement of the security and made the sale process and the return of funds to Australia challenging.
We have worked with the receivers to protect the significant interests that the ABC group of companies hold in the United States. In addition to protecting its shareholding in the Learning Care Group, the receivers have also been involved in proceedings in a number of locations, including Nevada and Arizona.
Henry Davis York is also assisting the receivers in conjunction with US counsel and the liquidators, to bring Chapter 15 proceedings in Delaware to obtain the protection of the US Bankruptcy Court for ABC's US assets.
A large team of HDY lawyers was embedded with the receivers in ABC's head office in Brisbane to provide "on-the-ground" legal advice throughout the receivership and prior to the sale of the Australian business. We also had a large team of partners and lawyers in Sydney working on the sale of the entity, employee matters, recovery and other receivership issues.
In addition, we are advisers to the banking syndicate on the examinations being conducted by the administrator after it obtained funding from the litigation funder, IMF. We are also assisting the banking syndicate and receivers in the ongoing ASIC investigations, including examinations, into the collapse of ABC.
Henry Davis York was awarded Insolvency and Restructuring Deal of the Year 2010 by Australasian Legal Business for its work on ABC Learning Centres.