Magnolia Capital's purported appointments of administrators BDO to The Agency Group (ASX: AU1) will have no effect, following a Federal Court order after the targeted company applied for an injunction.
Magnolia-affiliated MCL 105 Pty Ltd, which is controlled by AU1 minority shareholder and former director Mitchell Atkins, claimed to have appointed voluntary administrators to the property group over alleged debts.
The Agency states the alleged and disputed debt of approximately $385,000 relates to "alleged fees on a financing mandate where MCL 105 Pty Ltd delivered nothing".
"This morning the Federal Court ordered that the purported appointments would have no effect (other than in relation to various technical matters) pending the determination of the proceedings or other order and control of The Agency remains in the hands of the directors," The Agency said.
The Federal Court in WA also ordered the purported administration to end at 4pm on 1 February 2021, and a hearing will take place that same day at 9.15am AWST to give any creditor or sufficiently interested party the opportunity to discharge or vary the orders.
"The Company's position is that the alleged appointment by MCL 105 Pty Ltd was undertaken for the purpose of destabilising the Agency and compelling the Company to pay a disputed a disputed fee," The Agency said.
"The Agency is in a strong financial position and the recent AGM results demonstrate the overwhelming support for the Board's strategy to continue to drive shareholder value."
Yesterday the group sought to reassure staff that their day-to-day operations, jobs and clients were not affected by Magnolia's actions, highlighting the company was was well financed with $27 million worth of cash and other assets along with a positive cash flow.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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