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Federal Court of Australia · [2025] FCA 1357

Crawford, in the matter of Pro-Pac Packaging Limited (administrators appointed)

Crawford, in the matter of Pro-Pac Packaging Limited (administrators appointed) [2025] FCA 1357 is a Federal Court insolvency decision...

Federal Court of Australia

Plain-English explainers, not legal advice. Check the linked official source before you rely on a specific section, and get advice for your situation.

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Quick read

  • Read this case as a practical administration and group-structure decision.
  • Crawford, in the matter of Pro-Pac Packaging Limited (administrators appointed) [2025] FCA 1357 is a Federal Court insolvency decision about keeping a large packaging...

Use this to check

  • Australian and New Zealand companies were both under administration
  • The group depended on secured funding to keep operating
  • Administrator appointments triggered default under existing funding

Decision snapshot

  1. 1

    What happened

    • On 23 October 2025, Keith Crawford and Robert Smith were appointed as joint and several administrators of Pro-Pac Packaging Limited and its Australian subsidiaries.
    • On the same day, administrators were also appointed to two New Zealand companies in the same group, Integrated Packaging Limited and Pro-Pac Finance (NZ) Limited.
    • The wider Pro-Pac group also included entities in Malaysia and the United States, although those entities were not under external appointment at that stage.
    • Pro-Pac Packaging Limited was an ASX-listed packaging business operating across several divisions in Australia and New Zealand, including Integrated Packaging, Integrated Machinery, Integrated Recycling, Perfection Packaging and Speciality Packaging.
  2. 2

    What the court had to decide

    • The Federal Court had to decide whether, in the voluntary administration of the Pro-Pac group, it should make orders under Part 5.3A of the Corporations Act and the Insolvency Practice Schedule to facilitate continued trading and orderly administration.
    • That included whether to extend the convening period for the second creditors' meetings, modify the process for creditor information requests, direct how money could be paid from the administration account, and protect the administrators from personal liability in relation to proposed funding arrangements with ScotPac and Kin Group.
  3. 3

    What the court decided

    • The Federal Court granted the relief sought.
    • Beach J extended the period for convening the second meetings of creditors to 20 May 2026 and allowed the meetings to be held during that period or within five business days after it, provided at least five business days' notice was given.
    • The Court ordered that liabilities incurred under the identified funding deeds be treated as debts incurred by the administrators in performing their functions, while limiting the administrators' personal liability where their indemnity from company assets was insufficient.

Practical impact

Practical read

  • Read this case as a practical administration and group-structure decision.
  • The Court did not rewrite lease law.
  • What it did was support administrators trying to preserve value in a large cross-border group by allowing continued trading and giving them procedural and funding protection.
  • The property angle matters because the administrators' early investigations suggested some dormant entities still sat on leases that had not been formally moved to the active trading company.

Useful next steps

  • Australian and New Zealand companies were both under administration
  • The group depended on secured funding to keep operating
  • Administrator appointments triggered default under existing funding
  • Parallel court applications were being made in Australia and New Zealand
  • The Court recognised practical cross-border cooperation outside the Model Law

The story

This case arose out of the voluntary administration of the Pro-Pac group, an ASX-listed packaging business with operations in Australia and New Zealand. The administrators were appointed on 23 October 2025 to Pro-Pac Packaging Limited and its Australian subsidiaries. On the same day, administrators were also appointed to two New Zealand companies in the group.

The group was large and operationally significant. The Court was told it had about 545 employees, 139 secured creditors and around 1,200 unsecured creditors. Its businesses included manufacturing and distribution activities across several packaging divisions. The administrators' immediate task was to decide whether the businesses could keep trading long enough for recapitalisation or sale options to be explored, rather than collapsing straight into shutdown and liquidation-style outcomes.

The commercial difficulty was not just cash flow. It was also structure. The administrators' preliminary investigations suggested that a number of entities in the group were no longer trading and were largely dormant because operations had been transferred to active companies in 2020. In Australia, trading appeared to occur mainly through Pro-Pac Group Pty Ltd. In New Zealand, trading appeared to occur mainly through Integrated Packaging Limited.

But the legal paperwork had not necessarily kept pace with the operational reality. The reasons say some dormant entities still appeared to be parties to property leases that had not been novated to Pro-Pac Group Pty Ltd, and there also appeared to be inter-company loans. That is a familiar problem in corporate groups. The business moves, staff move, customers deal with the new operating entity, but the signed contracts may still sit with an older company.

Funding pressure and the cross-border setting

The group relied heavily on secured funding, especially facilities with Scottish Pacific Business Finance Pty Ltd, known as ScotPac. The reasons explain that ScotPac had provided debtor finance and a chattel mortgage facility, supported by guarantees, indemnities and security interests across much of the group. The appointment of administrators was a default event under the ScotPac facility agreement. That meant the administrators could not simply assume funding would continue on the same basis.

The administrators told the Court they needed funding to keep the businesses trading. They estimated monthly costs of the Australian companies at between AUD15 million and AUD25 million, excluding their own remuneration and disbursements. They said liquidity was needed to pay employee wages, PAYG, payroll tax, superannuation, rent and other critical trading expenses while they worked on recapitalisation or sale options.

There was also a cross-border dimension. The Australian application ran in parallel with a similar application by the New Zealand administrators in the High Court of New Zealand. The Federal Court recorded that the administrators had considered whether to proceed under the UNCITRAL Model Law on Cross-Border Insolvency, but no such application was made. The Court noted that cross-border cooperation with New Zealand could still occur outside the Model Law framework.

That matters for business readers because cross-border groups often assume insolvency steps will be neatly coordinated. In practice, administrators may need to move quickly in more than one jurisdiction, and the procedural path chosen can depend on timing, local relief needed and practical cooperation between courts and officeholders.

Practical sense check

  • Australian and New Zealand companies were both under administration
  • The group depended on secured funding to keep operating
  • Administrator appointments triggered default under existing funding
  • Parallel court applications were being made in Australia and New Zealand
  • The Court recognised practical cross-border cooperation outside the Model Law

What the administrators asked the Court to do

The administrators sought a package of orders aimed at stabilising the administration. First, they wanted relief connected with revised funding arrangements. The proposed arrangements involved ScotPac and also Kin Group. The administrators said they were not willing or able to enter into the funding deeds or draw on the facilities without protection against personal liability beyond the assets available for indemnity.

Second, they asked for more time to convene the second meetings of creditors. In a large administration, the standard timetable may not be enough to investigate the business, understand inter-company positions, assess creditor claims and test restructuring or sale options. Here, the administrators sought a six-month extension.

Third, they sought directions about handling funds in the administration account. The reasons say that most funds received, including some from the New Zealand companies, were received into Pro-Pac Group Pty Ltd's bank account in Australia, from which liabilities of group companies were paid. That raised the need for court directions about how money could be paid out of the relevant administration account.

Fourth, they sought an extension of time to respond to creditor requests for information, from five business days to ten business days, and permission to provide information through a creditor portal on the McGrathNicol website. Given the number of creditors and the complexity of the group, the administrators presented this as a practical communication measure.

Practical sense check

  • Orders supporting entry into and performance of funding deeds
  • Protection against administrators' personal liability beyond available indemnity
  • An extension of the convening period for second creditors' meetings
  • Directions about payments from the administration account
  • More time and a portal process for creditor information requests

What the Court had to decide

The legal question was whether the Court should make orders under Part 5.3A of the Corporations Act and the Insolvency Practice Schedule to support the administration of a large and complex corporate group. In practical terms, the Court had to decide whether giving the administrators more time, more operational flexibility and protection in relation to funding arrangements would better serve the administration than forcing a more immediate collapse.

The Court also had to consider whether the proposed funding and account arrangements were appropriate in a group where operations, liabilities and cash handling did not sit neatly within one entity. The reasons show that the Court accepted the administration was complicated by dormant entities, inter-company arrangements, leased premises and cross-border operations. The issue was not whether any particular lease had been breached.

It was how the administration framework should operate where the legal and commercial structure had become untidy.

What the Court decided

Beach J made the orders sought. The Court extended the period within which the administrators had to convene the second meetings of creditors to Wednesday, 20 May 2026. It also ordered that, despite the usual position, the second meetings could be convened and held at any time during the extended convening period or within five business days after it, provided creditors were given at least five business days' notice.

The Court further ordered that liabilities incurred in connection with the Kin Funding Deed, the Australian ScotPac Funding Deed and the NZ ScotPac Funding Deed were to be treated as debts incurred by the administrators in performing their functions. At the same time, the Court limited the administrators' personal liability to the extent their indemnity out of company property was insufficient to satisfy those debts or liabilities.

The Court also directed that the administrators were justified and acting reasonably in causing most of the Pro-Pac companies, other than Integrated Machinery Pty Ltd, to enter into and perform the relevant funding deeds. On funds handling, the Court ordered that money not be paid out of the relevant administration account except for purposes related to the external administration of the Pro-Pac companies and their related New Zealand entities, in accordance with the Act, or under further court direction.

On creditor communications, the Court modified the rules so the administrators had ten business days, rather than five, to respond to creditor requests, and could provide requested information by publishing it on the creditor portal maintained on the McGrathNicol website.

The reasons explain why the Court accepted the administrators' position. Continued funding would allow the businesses to trade on, make urgent payments and receive income while recapitalisation or sale options were explored. The Court accepted that this could increase the pool available to creditors compared with an immediate winding up scenario.

The Court also accepted that continued trading could preserve business value, avoid immediate termination of hundreds of employees and reduce the immediate crystallisation of termination entitlements and other claims.

The Court also made confidentiality orders over parts of the evidence and some related documents. That means some commercial details of the funding arrangements are not publicly available.

Documents and conduct: the lease and group structure point

The most useful property lesson in this case comes from one factual finding in the administrators' preliminary investigations. Some dormant entities still appeared to be parties to property leases that had not been novated to Pro-Pac Group Pty Ltd. That is not unusual in growing or reorganised groups. A site may be occupied by one company, invoices may be paid by another, and management may assume everyone knows which entity is really running the business.

But the legal tenant is the entity named in the lease unless the documents have been properly changed.

That distinction can sit quietly in the background while the business is healthy. Once administration begins, it becomes critical. Administrators need to know which company is liable for rent and other lease obligations. Landlords need to know which entity they can claim against. Buyers and recapitalisation proponents need to know where occupancy rights and liabilities actually sit. If the paperwork does not match the trading reality, the administration becomes more complex and potentially more expensive.

The same logic applies beyond leases. The reasons also refer to inter-company loans and group-wide funding and security arrangements. In many businesses, internal restructures happen faster than document clean-up. Operations move from one entity to another, but guarantees, finance documents, customer contracts, supplier agreements and property arrangements remain in the old names. In distress, that can produce disputes about liability, priority, indemnity and who has authority to deal with assets or contracts.

For landlords, this case is a reminder to insist on formal assignment or novation documents when a tenant group says another entity will take over the site. For tenant groups, it is a reminder to keep a contract register by entity and to update legal documents when operations move. Conduct on the ground does not automatically replace signed legal obligations.

Documents to keep in order

  • Identify the named tenant on every lease
  • Check whether any assignment or novation was actually completed
  • Review guarantees, indemnities and security linked to the lease
  • Compare occupancy and payment practice with the signed documents
  • Check whether dormant entities still carry hidden liabilities
  • Audit inter-company arrangements when operations move within a group

How businesses should read it

If your business is not in financial distress, this case is still a useful governance warning. It shows how quickly a complicated entity structure can create legal uncertainty once external administrators arrive. The administrators in Pro-Pac had to deal with multiple companies, cross-border operations, secured lenders, employee liabilities, inter-company arrangements and leases that may not have been moved to the right entity. Those are not rare problems.

They are common in groups that have grown by acquisition, restructured internally or centralised operations over time.

If your business is under pressure, the case shows that continued trading in administration often depends on available funding, lender cooperation and court orders that give administrators enough time and protection to preserve value. The Court did not say such orders are automatic. It accepted them here because the administrators put forward evidence that continued trading could improve creditor outcomes, preserve business value and avoid immediate crystallisation of very large employee claims.

For landlords and counterparties, the case is a reminder that insolvency analysis starts with the documents. Who signed the lease, who gave the guarantee, who holds the security, and whether any transfer was formally completed can matter more than who has been using the premises in practice. For directors and managers, the message is to clean up entity-level documentation before a crisis. Once administrators are appointed, untidy records become a live legal and commercial problem.

For creditors, the decision also shows that courts may support practical communication measures in large administrations, such as longer response times and portal-based publication, where the creditor body is large and the administration is complex.

Quick questions for your own business

Practical sense check

  • Which entity is the legal tenant for each site your group uses?
  • Have any internal restructures been matched by signed lease transfers or novations?
  • Do your finance documents and guarantees still sit with old entities?
  • If one entity receives group cash, is that arrangement properly documented?
  • Could administrators or creditors quickly work out who owes what if the business failed?

Source notes

This page is based on the published Federal Court orders and reasons in Crawford, in the matter of Pro-Pac Packaging Limited (administrators appointed) [2025] FCA 1357. The public reasons identify the appointments, the relief sought, the orders made, the cross-border context, the funding position, the existence of confidentiality orders, and the administrators' preliminary observations about dormant entities, leased premises and inter-company arrangements.

Some details are not public because the Court ordered parts of the evidence and related documents to remain confidential. In addition, the published reasons available here are truncated. For that reason, this page focuses on the parts of the decision that are clearly supported by the public judgment and avoids drawing conclusions beyond what is stated there.

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