NOTICE OF FILING. Details of Filing

Transcription

1 NOTICE OF FILING This document was lodged electronically in the FEDERAL COURT OF AUSTRALIA (FCA) on 8/09/ :04:16 PM AEST and has been accepted for filing under the Court s Rules. Details of filing follow and important additional information about these are set out below. Details of Filing Document Lodged: Defence - Form 33 - Rule File Number: File Title: Registry: VID527/2016 Mark Francis Xavier Mentha in his capacity as joint and several administrator of Arrium Limited (Administrators Appointed) & Ors v GSO Capital Partners LP & Ors VICTORIA REGISTRY - FEDERAL COURT OF AUSTRALIA Dated: 8/09/ :04:27 PM AEST Registrar Important Information As required by the Court s Rules, this Notice has been inserted as the first page of the document which has been accepted for electronic filing. It is now taken to be part of that document for the purposes of the proceeding in the Court and contains important information for all parties to that proceeding. It must be included in the document served on each of those parties. The date and time of lodgment also shown above are the date and time that the document was received by the Court. Under the Court s Rules the date of filing of the document is the day it was lodged (if that is a business day for the Registry which accepts it and the document was received by 4.30 pm local time at that Registry) or otherwise the next working day for that Registry.

2 Form 33 Rule 16.32zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA First Respondent's Amended Defence No. VID 527 of 2016 Federal Court of Australia District Registry: Victoria Division: Corporations List IN THE MATTER OF ARRIUM LIMITED (ADMINISTRATORS APPOINTED) (ACN ) and OTHERS (according to the Schedule attached) MARK FRANCIS XAVIER MENTHA, CASSANDRA ELYSIUM MATHEWS, MARTIN MADDEN AND BRYAN WEBSTER IN THEIR CAPACITIES AS JOINT AND SEVERAL LIQUIDATORS ADMINISTRATORS OF ARRIUM LIMITED (ADMINISTRATORS APPOINTED) (ACN ) AND OTHERS (according to the Schedule attached) First Plaintiffs ARRIUM LIMITED (ADMINISTRATORS APPOINTED) (ACN ) (according to the Schedule attached) and OTHERS Second Plaintiffs GSO CAPITAL PARTNERS LP AND OTHERS (ACN ) (according to the Schedule attached) and OTHERS DefendantsRespondents To the Plaintiffs' amended statement of claim dated 3 June24 August 2016, the First Respondent (GSO) says by way of defence as follows (adopting the defined terms contained in the amended statement of claim unless otherwise indicated): 1. It admits the allegations in paragraph It admits the allegations in paragraph It admits the allegations in paragraph It admits the allegations in paragraph 4. F iled on behalf of First Respondent Prepared by Law firm Corrs Chambers Westgarth Tel (02) Fax (02) Sam.delaney@corrs.com.auzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA D X Ref SPD/LR/GSOC Address for service 8-12 Chifley Square, Sydney, NSW 2000 [Formapprovedzyxwvutsrqponmlkjihgf 01/08/20111

3 2 5. It admits the allegations in paragraph It admits the allegations in paragraph It admits the allegations in paragraph It admits the allegations in paragraph It admits the allegations in paragraph 9 as says further that: (a) as part of the Recapitalisation Documents, each of Moly-Cop Security Grantors executed an Accession Deeds); Deed (Security Provider)zyxwvutsrqponmlkjihgfedcbaZYXW (Accession Particulars A copy of the Accession Deeds is in the possession of GSO's solicitors and may be inspected by prior appointment. (b) there were terms of the STD, inter alia, that: (i) "Beneficiary" includes, inter alia: (A) (B) (C) (D) BNY Canada and BNY Australia (as "Security Trustees"); BTA Australia (as "Initial Representative"); GSa (as "Recapitalisation Beneficiary"); each Participant as set out in Part A of Schedule 1 to the Interim Facility Agreement (as "IFA Beneficiary") (clause 1.1); (ii) (iii) "Finance Document" includes, inter alia, the PSAs (as "Security") and the Interim Facility Agreement (clause 1.1); "Obligor" includes, inter alia: (A) (B) (C) Arrium Finance (as the "Company"); Arrium Limited (as the "Parent"); each Moly-Cop Security Grantor (as a party to the Accession Deeds in their capacity as a Security Provider) (clause 1.1); (iv) "Secured Money" includes, inter alia, all debts and monetary liabilities of the Obligors to any of the Beneficiaries under, or in relation to, any Finance Document in each case and in any capacity, irrespective of whether the relevant debts or liabilities:

4 3zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLK (A) (B) (C) are present or future; are actual, prospective, contingent or otherwise; are at any time ascertained or unascertained; (0) are owed or incurred by or for the account of an Obligor alone, severally or jointly with any other person; (E) (F) (G) (H) are owed to, or incurred for the account of, any Beneficiary, alone, severally or jointly with any other person; are owed to any other person as agent (whether disclosed or not) for or on behalf of any Beneficiary; are owed or incurred as principal, interest, fees, charges, Taxes, damages (whether for breach of contract, tort or incurred on any other ground), losses, costs or expenses, or on any other account; are owed to or incurred for the account of any Beneficiary directly or as a result of: the assignment or transfer to any Beneficiary of any debt or liability of an Obligor (whether by way of assignment, transfer or otherwise); or any other dealing with any such debt or liability; (I) are owed to or incurred for the account of a Beneficiary before the date of this deed, before the date of any assignment of this deed to any Beneficiary by any person or otherwise; or (J) comprise any combination of the above (clause 1.1); (v) "Security" includes the PSAs (as "Initial Security") (clause 1.1); (vi) "Security Provider" means a person who has granted Security (clause 1.1); (c) there were terms of each of the PSAs, inter alia, that (i) (ii) all capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the STO (clause 1.1); "Secured Obligations" means the "Secured Money" under, and as defined in, the STO (Article I, clause 1.6);

5 4 (iii) (iv) (v) "Secured Party" means each "Beneficiary" under, and as defined in, the STD (Article I, clause 1.6); "Collateral" means all Accounts, cash, Chattel Paper (including without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper), Commercial Tort Claims, all computer programs and all intellectual property rights therein and all other proprietary information, including but not limited to Domain Names and Trade Secrets, Contracts and Contract Rights arising thereunder, Copyrights, Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts and all monies, securities, Instruments and other investments deposited or required to be deposited in any of the foregoing, Documents, Equipment, Farm Products, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, letters of credit, Letterof-Credit Rights, Licenses, Patents, Permits, Pledged Deposits, all Software and all Software licensing rights, all writings, plans, specifications and schematics, all engineering drawings, customer lists, goodwill and licenses, and all recorded data of any kind or nature, regardless of the medium of recording, Supporting Obligations, Trademarks and Other Collateral, wherever located, in which any Moly-Corp Security Grantor now has or hereafter acquires any right or interest, and the Proceeds (including Stock Rights), insurance proceeds, Proceeds and products of any and all of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto, but excludes any Excluded Asset. For the avoidance of doubt, "Collateral" includes all real and personal property of the Moly-Corp Security Grantors that is not an Excluded Asset (Article I, clause 1.6); each of the Moly-Corp Security Grantors hereby pledges, assigns and grants to BNY Canada or BNY Australia (as the case may be), on behalf of and for the benefit of the Secured Parties, a security interest in all of such Moly-Corp Security Grantor's right, title, interest, whether now owned or hereafter acquired or arising in and to the Collateral to secure the prompt and complete payment and performance of the Secured Obligations. The security interests of the Security Trustee under this Security Agreement extend to all

6 5zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIH Collateral which any Moly-Corp Security Grantor may acquire, or with respect to which any Moly-Corp Security Grantor may obtain rights, at any time during the term of this Security Agreement. For the avoidance of doubt, (a) the grant of the security interest by the Moly-Corp Security Grantors contained herein shall not be deemed to be an assignment of an ownership interest in any intellectual property rights owned by the Moly-Corp Security Grantors and (b) such security interest is granted as security only and shall not subject to the BNY Canada or BNY Australia (as the case may be) or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Moly-Corp Security Grantor or any other Person with respect to or arising out of the Collateral or any agreements related thereto (Article II); and (vi) each Moly-Cop Security Grantor hereby agrees, jointly with the other Moly-Cop Security Grantors and severally, to indemnify, reimburse and hold harmless BNY Canada or BNY Australia (as the case may be) and the Secured Parties, and their respective successors, assigns, directors, agents and employees (each an "Indemnitee" and collectively, the "Indemnitees"), from and against any and all liabilities, obligations, damages, injuries, penalties, claims, demands, suits, costs, and expenses of any kind and nature (including, without limitation, all expenses of litigation or preparation therefor whether or not BNY Canada or BNY Australia (as the case may be) or any Secured Party is a party thereto) imposed on, incurred by or asserted against the Indemnitees, in any way relating to or arising out of this Security Agreement or any other Finance Document, or any other document executed in connection herewith or therewith or in any way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent and other defects, whether or not discoverable by BNY / Canada or BNY Australia (as the case may be) or the Secured

7 6zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFE Parties or any Moly-Corp Security Grantor, and any claim for patent, trademark or copyright infringement) (Article VIII, clause 8.17); (d) (e) it was a further term of the PSA with anesteel US Holdings and Moly-Cop USA that this Security Agreement shall be construed in accordance with and governed by the law of the State of New York in the United States of America (Article VIII, clause 8.16); and there were terms of the Recapitalisation Deed, inter alia, that: (i) "Recapitalisation" means the recapitalisation of the Arrium Group in the manner consistent in all material respects with the Term Sheets taken as a whole, involving amongst other things: (A) certain GSa Affiliates providing the Senior Facility to the Arrium Group in the amount of USD665 million; (8) certain members of the Arrium Group entering into a Working Capital Facility of A$500 million or GSa and/or certain GSa Affiliates making available a working capital line of the USD equivalent of A$500 million; (C) (D) (E) (F) the proceeds (net of expenses and restructuring costs) of the debt and equity funding referred to in paragraphs 1 and 6 of this definition being used to repay or redeem, at less than par value, the Compromise Debt; the remainder of the Compromise Debt being extinguished or otherwise retired in full; Arrium Limited issuing Warrants to GSa and/or certain GSa Affiliates on the terms set out in the Warrant Term Sheet; and a fully underwritten renounceable Rights Issue to be conducted by Arrium Limited to raise no less than USD262 million (clause 1.1); (ii) Arrium Limited and GSa acknowledge there will be a number of conditions which will need to be satisfied in order for the Recapitalisation to proceed. Such conditions include: (A) procuring the Debt Compromise as set out in clause 4 (clause 2(b)(1));

8 7zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHG (B) (C) agreeing and finalising the Recapitalisation Documents (clause 2(b)(2)); and (A) completion of due diligence in relation to the business and operation of Arrium Limited (and each of its subsidiaries) to GSO's satisfaction and (B) final investment committee approval of GSO of the Recapitalisationzyxwvutsrqponmlkjihg (GSO Condition) (clause 2(b)(3)). (iii) (iv) (v) W(vi) Arrium Limited and GSO must work together in good faith and use their best endeavours to seek either: (1) a Consensual Agreement; or (2) a binding agreement with at least the Required Majority of Compromise Debt Holders to vote in favour of a Creditor's Scheme, on terms which are acceptable to Arrium Limited and GSO, each acting reasonably (Debt Compromise) by 11:59pm on 31 July 2016 (clause 4(a)); Arrium Limited agrees to present the Recapitalisation to the Compromise Debt Holders and to seek the Debt Compromise as soon as practical after the date of the Recapitalisation Deed (clause!(ill subject to clause 10.1(c), if the Recapitalisation Implementation Agreement has not been signed, Arrium Limited will be liable to pay a fee to GSO and/or the GSO Affiliates as notified by GSO in the specific amount set out below (Work Fee) on the day which is no later than five Business Days after, inter alia, Arrium Limited notifies GSO in writing that it has become aware that such number of Compromise Debt Holders object to the Debt Compromise (under which the Compromise Debt would be repaid or redeemed at less than par using funds received under the Senior Debt Facility Agreement and the Rights Issue) such that Arrium Limited has determined in good faith that it is not reasonably likely that the Debt Compromise will be achieved before 11:59pm on the End Date (clause 10.1(b)(2)); subject to clause 13.2(c) and clause 13.2(d) Arrium Limited will pay to GSO an amount equal to the reasonable out of pocket expenses of GSO, and the reasonable third party accounting, tax and legal advisory expenses (including GST) incurred by GSO from the date

9 8zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIH immediately following the date of this deed to the date of termination of this deed in connection with: (A) (B) (C) (D) its negotiation, development and implementation of the Recapitalisation, including its due diligence investigations into Arrium Limited; is negotiation of an agreeable structure for the Recapitalisation with Arrium Limited; its negotiation and drafting of this deed and Recapitalisation Documents; and all reasonable incidental professional advice in connection with the Recapitalisation,zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPON (Costs Reimbursement) (clause 13.2(b)); fhffiylllarrium Limited must pay the full amount of the Costs Reimbursement payable to GSa and/or the GSa Affiliates as notified by GSa in accordance with clauses 13.2(b) and 13.2(c) into one or more accounts nominated by GSa within 10 Business Days after receiving a written demand by GSa for payment of such Costs Reimbursement (such written demand to be provided by GSa to Arrium Limited no more than once a month) provided GSa has provided Arrium Limited with reasonable evidence and copies of its invoices (which copies may redact privileged information) in support of its demand (clause 13.3(b)). 1O. As to paragraph 10, it (a) (b) refers to and repeats paragraphs 9(a) to (c) above; and otherwise does not admit the allegations. 11. Subject to production of the Recapitalisation Deed and reference to its full terms and effect at trial, it admits the allegations in paragraph It admits the allegations in paragraph As to paragraph 13, it refers to and repeats paragraphs 9(e)(ii)-=-9(e)(v) above and says that (a) on 1 April 2016, the Compromise Debt Holders (as defined in cl 1.1 of the Recapitalisation Deed) rejected the Debt Compromise (as defined in ci 1.1 and 4(a) of the Recapitalisation Deed) and gave notice of that rejection in writing to Arrium;

10 9zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFE Particulars Letter from Ms Annie Truong on behalf of National Australia Bank Limited to Mr Andrew Roberts and Ms Naomi James of Arrium Limited dated 1 April 2016, and letter from Ms Renee M. Dailey of Morgan, Lewis & Bockius LLP to the Boards of Directors of Arrium Limited and its subsidiaries (c/o Mr John Nestel of Herbert Smith Freehills) dated 1 April 2016 (GSa Rejection Notices). Copies of the GSa Rejection Notices may be inspected at the offices of GSa's lawyers by appointment. (b) on 1 April 2016, the Compromise Debt Holders represented by National Australia Bank gave notice to Arrium Limited inter alia that the Debt Compromise will not be achieved before 11.59pm on 31 July 2016 or at all; Particulars Letter from Ms Annie Truong on behalf of the National Australia Bank to Mr Andrew Roberts and Ms Naomi James of Arrium Limited dated 1 April (c) on 1 April 2016, Arrium Limited notified GSa in writing that Arrium Limited had become aware that the Compromise Debt Holders had objected to and had rejected the Debt Compromise; Particulars from Ms James of Arrium Limited to Mr Michael Whitman of GSa dated 1 April 2016 which attached copies of the GSa Rejection Notices. A copy of the and its attachments may be inspected at the offices of GSa's lawyers by appointment. (d) (e) (f) by 5pm on the day prior to the End Date (4 April 2016), Arrium Limited and GSa had not agreed or finalised the Recapitalisation Documents in accordance with clause 2(b)(2) of the Recapitalisation Deed; in the premises, by 5pm on the day prior to the End Date (4 April 2016), it was known to GSa and Arrium Limited that the Debt Compromise (as defined in ci 1.1 and 4(a) of the Recapitalisation Deed) could not be procured in accordance with clause 2(b)(1) of the Recapitalisation Deed or at all; on a proper construction of clauses 9 and 10.1(c) of the Recapitalisation Deed, GSa was not required to provide confirmation to Arrium Limited by no later than 5pm on the day prior to the End Date (4 April 2016) whether or not the GSa Condition had been fulfilled as a condition of payment of the Work Fee in circumstances where:

11 10 (i) the Debt Compromise as set out in clause 4 had been rejected by the Compromise Debt Holders; and (ii) the Recapitalisation Documents had not been agreed or finalised; (g) (h) it otherwise denies the allegations; and in the alternative to paragraph 13(f) above, says that in the circumstances pleaded above it would be unconscionable for Arrium Limited to rely on its strict legal rights under clause 10.1(c)(2) of the Recapitalisation Deed.zyxwvutsrqponmlkjih Particulars Gsa repeats the matters pleaded at paragraphs 9(e)(ii)_=-9(e)(vL,13(a) :_13(e) above. 14. It admits the allegations in paragraph As to paragraph 15: (a) (b) it refers to and repeats paragraph 13 above; and otherwise denies the allegations. 16. Subject to production of the Recapitalisation Deed and reference to its full terms and effect at trial, it admits the allegations in paragraph 16. ~.1L._Subject to production of the s and reference to their full terms and effect at trial, it admits the allegations in paragraphzyxwvutsrqponmlkjihgfedcbazyxwvutsrqponmlkjihgfedcba ~1L 44.-.HL_Subject to production of the demand and reference to its full terms and effect at trial, it admits the allegations in paragraph a-N_As to paragraphzyxwvutsrqponmlkjihgfedcbazyxwvutsrqponmlkjihgfedcba 4-5~: (a) (b) 4-e:-~Subject it admits the allegations in sub-paragraph (a); and it does not admit the allegations in sub-paragraph (b). to production of the letters and reference to their full terms and effect at trial, it admits the allegations in paragraph :-~As to paragraph 4-721: (a) (b) it admits that the PSAs have not been released; and it otherwise does not admit the allegations. 4-&.-22. As to paragraph 22: (a) #-itdenies the allegations and in paragraph 18 and says further that:

12 11 (i) (ii) the Plaintiffs have failed or refused to pay the amounts referred to in paragraph 4-&-22 of the amended statement of claim; the amounts referred to in paragraph 4-&-22 of the amended statement of claim are liabilities, damages and/or expenses imposed on and/or incurred by an Indemnitee (GSO) in any way relating to and/or arising out a Finance Document (the Interim Facility Agreement) or a document executed in connection herewith or therewith (the Recapitalisation VIII, clause 8.17 of the PSAs; Deed) for the purposes of Article (iii) accordingly, each Moly-Corp Security Grantor is liable to indemnify, reimburse and/or hold harmless GSO from and against the amounts referred to in paragraph 4-&-22 of the amended statement of claim pursuant to Article VIII, clause 8.17 of the PSAs; (iv) further, the amounts referred to in paragraph 4-&-22 of the amended statement of claim are debts and/or monetary liabilities owed by an Obligor (each Moly-Corp Security Grantor) to a Beneficiary (GSO) under, or in relation to, a Finance Document (PSAs) for the purposes of the definition of Secured Monies in clause 1.1 of the STD and Secured Obligations and in Article I, clause 1.6 of the PSAs; (v) in the premises, the amounts referred to in paragraph 4-&-22 of the amended statement of claim are secured by the terms of Article II of the PSAs.zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA Particulars GSO refers to and repeats its Statement of Cross-claim filed in this proceeding. 4-Q.,.~lt denies the allegations in paragraph

13 12zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDC Jed by Sam Y'e..I a....n.. e y. Corrs Chambers Westgarth Lawyer for the First DefendantRespondent This pleading was prepared by Nicholas De Young and settled by Peter Jopling of counsel.

14 13zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFE SCHEDULE 1 Federal Court of Australia District Registry: Victoria Division: Corporations List IN THE MATTER OF ARRIUM LIMITED (ADMINISTRATORS APPOINTED) ACN (AND EACH OF THE COMPANIES LISTED IN SCHEDULE 1) First Plaintiffs Mark Francis Xavier Mentha, Cassandra Elysium Mathew, Martin Madden and Bryan Webster in their capacities as joint and several administrators of Arrium Limited (ACN ) (administrators appointed), Arrium Finance Pty Limited (ACN ) (administrators appointed) and Arrium Iron Ore Holdings Pty Limited (ACN ) (administrators appointed) Second Plaintiffs Arrium Limited (ACN ) (administrators appointed) Arrium Finance Pty Limited (ACN ) (administrators appointed) Arrium Iron Ore Holdings Pty Limited (ACN ) (administrators appointed) OefendantsRespondents GSO Capital Partners LP First OefendantRespondent BTA Institutional Services Australia Limited (ABN ) Second RespondentDefendant BNY Trust Company of Australia Limited (ABN ) Third RespondentDefendant BNY Trust Company of Canada Fourth RespondentDefendant