Byrnes (Administrator), in the matter of Salads of Australia Pty Limited (Receivers and Managers Appointed) (Administrators Appointed)

This Federal Court decision was an application by administrators to extend the time for convening the second meeting of creditors for two holding companies in the Salads of Australia group. Under the ordinary timetable, the meeting had to be convened by 15 January 2026 and held by 22 January 2026. The Court extended the convening period to 11.59 pm on 22 October 2026 and made related orders allowing the meetings to be convened and held during the extended period, with at least five business days' notice.

The case is important because the Court did not treat the extension as routine. It worked through the usual principle that voluntary administration is meant to be relatively quick, then balanced that against the evidence that a rushed process would likely damage value. The companies in administration mainly held indirect share interests in PMFresh, a large food manufacturer that remained solvent and kept trading. The receivers wanted time to run a proper multi-stage sale process for those interests. The Court accepted that extra time was justified.

On 8 December 2025, the administrators were appointed to Salads of Australia Pty Limited and Salads of Australia Investments Pty Ltd on the instructions of secured creditors. On the same day, receivers and managers were also appointed. The first meeting of creditors was then convened on 17 December 2025.

The group structure mattered. Salads of Australia Pty Limited was the ultimate holding company. Its sole asset was its shares in Salads of Australia Investments Pty Ltd. That company held shares in SPM Fresh Holdings Pty Ltd, which in turn held PMFresh Pty Ltd and other subsidiaries. So the companies in administration did not directly run the trading business. Their value sat in upstream shareholdings that gave indirect exposure to the operating business lower in the group.

PMFresh was the commercial centre of gravity. The Court described it as a significant food manufacturer with a national network of production facilities. It supplied deli salads, salad kits, salad bowls, salad leaf, value added vegetables and fresh snacks in Australia, including to domestic supermarkets. PMFresh employed over 1,000 staff. It was solvent and continued operating business as usual. Its director and management team retained day to day control. PMFresh itself was not in administration or receivership.

The financing background also shaped the dispute. The third plaintiff had borrowed substantial sums from senior and junior lenders. The second plaintiff and PMFresh were among the guarantors. The lenders held first ranking security over the assets of the two companies in administration and subsequent ranking security over assets of other group companies. After events of default under the loan agreements, the lenders enforced their position by appointing receivers and causing the administrators to be appointed to the holding entities.

The receivers then prepared to commence a sale campaign to realise the companies' indirect shareholdings in PMFresh. The evidence was that this would not be a quick disposal. It would be a multi-stage process involving indicative offers and then binding offers, and the receivers expected it to take 7 to 8 months. They also said it was not appropriate to formally launch the process in December 2025 because of the complexity and scale of the business, the fact they were still reviewing books and records, the need to communicate with financiers, customers, suppliers, growers and employees, and the practical reality that Christmas and New Year was both the busiest operational period and a poor time to expect bidders to engage with a complex transaction.

The legal issue was whether the Court should extend the period within which the administrators had to convene the second meeting of creditors under section 439A of the Corporations Act, and make related orders under section 447A about how the meetings could be convened and held during the extended period. The administrators sought an extension to 22 October 2026, which was about nine months beyond the ordinary timetable.

The Court approached the question by applying established principles from earlier administration cases. A key point in the judgment is that an extension is not automatic. The power should not be exercised as of course. The Court's task is to strike an appropriate balance between two competing ideas. First, voluntary administration is intended to be relatively speedy and summary. Second, undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising returns for creditors and, where relevant, shareholders.

That balancing exercise was central here. The Court was not simply asking whether more time would be convenient. It had to decide whether the prospects of a better outcome for creditors through a longer administration outweighed the general expectation of prompt resolution. In practical terms, the question was whether forcing the companies into the ordinary timetable, or into liquidation, would likely undermine a value-preserving sale process for the indirect interests in PMFresh.

The Court had detailed affidavit evidence from one of the receivers and one of the administrators. That evidence did more than assert that extra time would be helpful. It explained why the ordinary timetable was commercially unrealistic and why a longer period was likely to improve outcomes.

From the receivers, the Court had evidence that they were preparing a multi-stage sale campaign to realise the companies' indirect shareholdings in PMFresh. The process would involve indicative offers and binding offers and was expected to take 7 to 8 months. The receivers also explained why they did not consider it appropriate to formally commence the sale process in December 2025. The reasons included the complexity and scale of the business, the fact they were still reviewing books and records, the need to communicate the appointments to a diverse stakeholder group, and the operational and commercial difficulties of the Christmas and New Year period.

The receivers also gave evidence that, based on their experience, a nine month extension would allow a thorough sale process to be run while the business of the group continued to trade as a going concern, which they anticipated would yield the best return to stakeholders. They considered there was a prospect of a better return to creditors if a sale of the shares occurred while the companies were in administration rather than if the companies entered liquidation. They also said creditors and other stakeholders, including employees, customers and suppliers of PMFresh, would be prejudiced if an extension were not granted because it would be close to impossible to run an appropriate sale process within the statutory timeframe.

From the administrators, the Court had evidence that the receivers had access to the books and records of the companies, while the administrators did not have direct access to those records. The administrators also explained what had happened at the first creditors' meeting. Creditors were invited to form a committee of inspection if they considered it appropriate, but no such committee was proposed. Creditors were informed that, at the receivers' request, the administrators would apply for an extension of time. No creditor objected. The evidence also identified the likely unsecured creditor position, including that the most significant potential unsecured creditor was PMFresh, another was an insurer, and the Australian Taxation Office had confirmed there were no outstanding taxation debts as at the date of appointment.

That combination of evidence mattered. It showed a practical sale plan, a reasoned explanation for the timing sought, a basis for thinking creditors would be better off, and no sign of creditor resistance. It also showed co-operation between receivers and administrators, including an intention to convene the second meeting promptly if the sale campaign finished earlier than expected.

A notable feature of the case was the evidence about the new mandatory merger control regime taking effect from 1 January 2026. The receivers said that part of the reason for the length of the extension sought was that the sale process needed to take account of that regime and would likely require ACCC approval, or a waiver, before the parties could put a sale transaction into effect.

The judgment records the receivers' understanding of the practical timing implications. They said the ACCC expected at least two weeks of pre-engagement before accepting a notification for a non-competitor bidder, and that a longer pre-engagement period might be required for a more complex transaction, such as one in concentrated markets or involving close competitors. They also said the ACCC would only commence the formal review process once the parties had signed a contract or otherwise demonstrated a mutual intention to enter into the transaction, with at least a signed heads of agreement needed. On that understanding, bidders could not obtain approval before being selected by the vendor.

The receivers further referred to a statutory minimum period before the ACCC could provide a determination, a 14 day standstill period after a determination to allow for appeals, and uncertainty about whether a waiver would be available or practical because the waiver process was untested. The Court accepted that these were legitimate timing considerations. It did not decide whether approval would definitely be required in any eventual sale, but it accepted that the likely operation of the new regime was a real reason why the ordinary administration timetable was too short.

For businesses, this part of the judgment is especially practical. It shows how competition approval can become a critical path issue even in an insolvency context. If a buyer cannot realistically obtain approval until after being selected, that can affect bid structure, signing, completion, exclusivity and the overall sale timetable. The Court treated this as part of the commercial reality that administrators and receivers had to manage.

Justice Hespe granted the extension sought. The Court ordered that the period within which the administrators had to convene the second meetings be extended to 11.59 pm on 22 October 2026. The Court also ordered under section 447A that, despite the usual rule, the second meetings could be convened and held at any time during the extended period and up to five business days after it ended, provided creditors and persons claiming to be creditors were given at least five business days' notice.

The Court's reasoning is important. It said the prospects of a better outcome for creditors through a longer period of administration outweighed the general expectation of a prompt resolution. Several factors were identified expressly. Although the only assets of the companies in administration were shares, those shares were indirect interests in a business of some size and complexity. Additional time was needed to execute a sale process. Placing the companies into liquidation would be more likely to prejudice creditors, whereas additional time was likely to enhance the return for unsecured creditors. There was no opposition from creditors, including the secured creditors. The administrators and receivers both considered an extension necessary, and the Court gave weight to their specialised and extensive experience.

The Court also addressed the fact that the extension sought was lengthy. It accepted that the reasons for the length had been explained, particularly the anticipated sale schedule, the potential for slippage, the impact of the new merger regime, and the need to enter into an agreement before the ACCC would consider approval under that regime. The Court said a material part of the length of the extension was due to uncertainty about how the new merger regime would operate in practice.

So the extension was not granted simply because a sale was proposed. It was granted because the evidence persuaded the Court that more time was likely to produce a better creditor outcome and that the reasons for the requested period were concrete and commercially grounded.

The Court also made a limited confidentiality order over discrete parts of a shareholder dispute notice. This is a practical point that businesses often care about in distressed transactions. The Court accepted that the information was commercially sensitive and that disclosure was likely to adversely affect the receivers' ability to conduct a confidential sales process that promoted the objects of Part 5.3A of the Corporations Act.

Importantly, the suppression order was narrow and time limited. The Court was not satisfied that the information needed to be suppressed indefinitely. Instead, it ordered suppression only until any sale by the receivers was completed or the sale process was abandoned. The Court also noted that the suppressed information was of no relevance to understanding the working of the Court or the reasons for the decision.

For businesses, the practical lesson is that confidentiality concerns can be recognised by the Court where they are tied to the integrity of a sale process and the proper administration of justice. But the order must be justified and proportionate. A request for indefinite secrecy will not necessarily be accepted.

If you run a business, this case is best read as a transaction planning decision inside an insolvency framework. The Court did not say every administration should be extended. It did not say every sale in the food sector will need ACCC approval. It did say that where value depends on a careful sale process, the Court may allow more time if there is a strong evidentiary basis and if the likely benefit to creditors outweighs the normal expectation of speed.

The case is also a reminder that a holding company administration can still have major consequences for an operating business lower in the group, even if that operating company remains solvent and keeps trading. A sale of upstream shares can determine who ultimately controls the operating business. That is why the Court paid attention not only to creditors, but also to the practical effects on employees, customers and suppliers.

Another practical point is the division of control after enforcement. Here, the administrators did not have direct access to the books and records because the receivers had that access. That kind of split can affect how quickly information can be gathered, how reports are prepared and how realistic the statutory timetable is. Businesses and lenders should factor that into planning from the outset.

Finally, the case shows the value of creditor communication. Creditors were told at the first meeting that an extension application would be made, and no objection was raised. The secured lenders supported the proposal. That did not make the extension automatic, but it helped show the Court that the application was commercially sensible and not controversial among those most directly affected.

The administrators were appointed on 8 December 2025. The first creditors' meeting was convened on 17 December 2025. The application for an extension was dated 19 December 2025. Justice Hespe gave judgment and made orders on 23 December 2025, and the reasons were published on 24 December 2025.

Without Court intervention, the second creditors' meeting had to be convened by 15 January 2026 and held by 22 January 2026. The Court extended the convening period to 22 October 2026 and allowed the meetings to be convened and held during the extended period and up to five business days after it ended, provided at least five business days' notice was given.

The judgment should be read as an insolvency administration decision with transaction timing implications. It is especially relevant where a distressed sale may intersect with the merger control regime referred to in the evidence before the Court.

This page is based on the Federal Court of Australia decision Byrnes (Administrator), in the matter of Salads of Australia Pty Limited (Receivers and Managers Appointed) (Administrators Appointed) [2025] FCA 1686. The judgment was delivered on 23 December 2025 and the reasons were published on 24 December 2025.

The case concerned an application under sections 439A and 447A of the Corporations Act, together with a limited confidentiality order under sections 37AF and 37AG of the Federal Court of Australia Act. It should be read primarily as a case about extending the administration timetable to support a sale process, with practical relevance for merger control timing and confidential transaction management.