From FH website Westmoon29 January 2009COMPASS RESOURCES LIMITED...

From FH website Westmoon

29 January 2009
COMPASS RESOURCES LIMITED ACN 010 536 820
(Administrators Appointed) (¡§CMR¡¨)
(Formerly Compass Resources NL)
CIRCULAR TO CREDITORS
I advise that Martin Jones, Steven Sherman and I were appointed Joint and Several
Administrators of the above Company and its subsidiary, Compass Mining Pty Ltd
(¡§CMPL¡¨) pursuant to Section 436A of the Corporations Act 2001 (¡§the Act¡¨) on 29
January 2009.
We now control the Company¡¦s operations and are assessing the Company¡¦s financial
position. The Company¡¦s directors have been requested to prepare a statement about the
Company¡¦s business, property, affairs and financial circumstances as at the date of our
appointment. I raise the following matters regarding the administration.
1. First Meeting of Creditors
We are required to call a first meeting of creditors within eight business days of our
appointment pursuant to Section 436E of the Act. The purpose of this meeting is to
provide creditors with an opportunity to:-
„X Appoint a Committee of Creditors; and,
„X Appoint an alternative Administrator, if they so desire.
In this regard, I enclose the following documents:
(a) Notice of Meeting of Creditors. Please note that a meeting for CMR will be held at
the Holiday Inn, 122 The Esplanade, Darwin, NT on 10 February 2009,
commencing at 9:00am (Central Standard Time). A meeting for CMPL will follow
this at 10:0am at the same location. Please note that you should arrive for
registration at least 20 minutes prior to the meeting.
Telephone conference facilities will be available for the CMR meeting only. If you
wish to participate by telephone, please contact Clinton Roberts or Georgina
Luck of my office before the meeting and, in any event, no later than 4.00pm on
the day prior to the meeting to make arrangement of same.
Page 2
CMR-FIRST CIRCULR TO CREDITORS-LPO 2009.01.29
(b) Informal Claim Form for Voting Purposes.
A person is not entitled to vote at the meeting unless they provide particulars of the
debt or claim to the Administrators before the meeting. Please note this form is for
voting purposes only. All creditors must furnish full details of their claims,
indicating whether they rank as secured, preferential or unsecured, and whether they
claim title to any goods supplied to the Company or any lien over goods in their
possession which are property of the Company.
(c) Appointment of Proxy form. The form enables you to appoint a person to act on
your behalf at the meeting.
(d) A publication of the Insolvency Practitioners Association of Australia (¡§IPA¡¨) and
the Australian Securities and Investments Commission concerning insolvency
information for creditors.
The Informal Claim Form for Voting Purposes and Proxy form should be lodged with this
office before the meeting and, in any event, no later than 4.00pm on the day prior to the
meeting. Forms can be sent by facsimile on (08) 9214 1400 marked to the attention of
Clinton Roberts or Georgina Luck or scanned and emailed to [email protected] or
[email protected]. However, Corporations Regulation 5.6.36A requires lodgement of
the original of the Proxy form with the Administrators¡¦ office within 72 hours of lodging the
faxed copy.
2. Declaration by Administrators
Pursuant to sections 435DA(2) and (3) of the Act and the IPA Code of Professional
Practice, I enclose the Adminstrators¡¦, ¡¥Declaration of Independence, Relevant
Relationships and Indemnities¡¦.
3. Trading
At this stage, the Administrators intend continuing the Company¡¦s trading and draw your
attention to the following.
3.1 Trading Accounts
The Act provides that the Administrators are personally liable for liabilities arising from
services rendered, goods bought or property hired, leased, used or occupied during the
Administration. Please note that the Administrators do not accept liability for any goods
purchased or services rendered without
„X A purchase order authorised by one or more of the specified authorised signatories
set out in the list accompanying this circular. Please note the authority limits; and,
„X A Tax Invoice. Where you do not provide a Tax Invoice, I am obliged by law to
deduct 48.5% from any payment due and remit the amount to the Australian
Taxation Office.
Page 3
CMR-FIRST CIRCULR TO CREDITORS-LPO 2009.01.29
Please open a new account styled ¡§Compass Resources Limited (Administrators
Appointed)¡¨ addressed to the Company's premises and charge future authorised orders to
that account. Accounts will be paid in accordance with your usual terms of credit, or other
credit terms agreed between you and the Administrators, provided the supply of goods or
services has been properly authorised and the invoice value is the amount specified on the
authorised order. Invoices submitted for amounts exceeding the authorised amount will
only be paid to the amount authorised.
If there are any outstanding or unfulfilled orders placed by either company prior to my
appointment, including those under which there are goods in transit, please contact Clinton
Roberts or Georgina Luck of this office to obtain written confirmation that the order should
proceed.
You may be aware that payment of unsecured creditors' accounts as at 28 January 2009
is postponed pending the outcome of the second meeting of creditors (see section 6
below).
3.2 Consignment Stock, Retention of Title and Liens/Pledges
If you supplied consignment stock to the Company, or believe you provided stock subject
to a ¡¥Retention of Title¡¦ clause, please contact my office as a matter of urgency.
If you claim a lien/pledge over any of the Company¡¦s assets, you are asked to set out
details of your claim in writing to the Administrators immediately.
3.3 Contracts/Agreements
The Administrators expressly refrain from personally adopting any of the Company¡¦s
contracts existing at the date of their appointment. All contracts are currently under review.
The Administrators will advise the status of contracts as soon as practicable; that is,
whether or not they remain on foot.
3.4 Property Used but Not Owned by the Company
In accordance with section 443B of the Act, the Administrators¡¦ liability under hire purchase
or lease agreements does not commence until five business days after the Administrators¡¦
appointment. Further, pursuant to section 440C of the Act, the lessor or owner of property
in the Company¡¦s control is not entitled to take possession of such property without leave
of the Court or the Administrators¡¦ written consent.
I will write separately to known lease and hire purchase creditors regarding such assets.
Please contact this office if you do not receive my letter.
4. Legal Proceedings
The appointment of Administrators stays a proceeding in a court against the Company.
You cannot commence or continue a proceeding against the Company without my written
consent or with the leave of the Court.
Page 4
CMR-FIRST CIRCULR TO CREDITORS-LPO 2009.01.29
5. Employees
I have written separately to employees regarding the appointment of Administrators.
6. Report to Creditors and Second Meeting of Creditors
The Administrators will prepare a report to creditors under section 439A of the Act which
will include details on the Company¡¦s business, property, affairs and financial
circumstances.
A second meeting of creditors will be held on or before Thursday, 5 March 2009 unless
the Court extends this date. It is at this meeting that creditors will consider the
Administrators¡¦ report and consider resolutions regarding the Company¡¦s future.
7. Administrators¡¦ Remuneration
For the purposes of the Company¡¦s administration, the Administrators intend that their
remuneration be fixed on the basis of time spent by them, and their staff of an appropriate
level having regard to the nature and complexity of the work, and calculated by reference
to hourly rates. Enclosed for your information are the following:
„h Statement regarding remuneration setting out the four basic methods of calculating
remuneration together with an explanation as to why hourly rates are appropriate in
this administration
„h Schedule of Rates and General Guide to Staff Experience
The Administrators will provide creditors with a remuneration report pursuant to section
449E of the Act with the report to creditors referred to in section 6 above.
An information sheet concerning approval of remuneration in external administrations can
be obtained from www.ipaa.com.au or through this office.
8. Electronic Notification
You may elect to receive future correspondence from this office via email. Should you
wish to do so, please email [email protected] with the following information:
¡½ The person to who matters regarding the administration should be directed
¡½ The full name of the entity.
¡½ The email address at which the creditor is to receive future correspondence.
Page 5
CMR-FIRST CIRCULR TO CREDITORS-LPO 2009.01.29
9. Further Information
For further information concerning the Voluntary Administration process and Ferrier
Hodgson, you may wish to visit our website at www.ferrierhodgson.com.
You may also wish to consider the IPAA¡¦s website www.ipaa.com.au, which contains the
IPAA¡¦s Statements of Best Practice, applicable to IPA members and/or the website
www.asic.gov.au for information sheets on the following topics:
„h Insolvency: a glossary of terms
„h Voluntary administration: a guide for creditors
„h Voluntary administration: a guide for employees
„h Liquidation: a guide for creditors
„h Liquidation: a guide for employees
„h Receivership: a guide for creditors
„h Receivership: a guide for employees
„h Insolvency: a guide for shareholders
„h Insolvency: a guide for directors
„h Independence of external administrators: a guide for creditors
„h Approving fees: a guide for creditors.
Should you have any queries in relation to this matter, please do not hesitate to contact
me, or in my absence, Clinton Roberts or Shannon Coleman of this office.
DARREN WEAVER
Joint and Several Administrator of
Compass Resources Limited