Re Odyssey Finance Holdings Pty Ltd

By Originating Process filed on 5 March 2026, the Plaintiff, Odyssey Finance Holdings Pty Ltd (“Odyssey FinCo”) seeks orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) that it convene and hold a meeting of the Financiers as defined in the “A$ syndicated facility agreement – 475 Victoria Avenue, Chatswood” dated 20 May 2020 as amended from time to time (“Creditors”) (“Scheme Meeting”) to consider and vote upon a scheme of arrangement proposed to be made between Odyssey FinCo and the Creditors (“Scheme”).

By way of background, Odyssey FinCo is a special purpose vehicle established in order to borrow funds for the purchase and management of a building in Chatswood, New South Wales (“Property”), which is a 13-level office complex with a ground floor retail section and three levels of basement carparking. The registered proprietors of the Property are Asia Property AU 2 Pty Ltd (“Asia Property AU 2”) in its capacity as trustee for the Odyssey Sub Trust (“Odyssey Owner”) as to 50% and Cromwell BT Pty Limited as custodian for the Cromwell Diversified Property Trust (“Cromwell Owner”) as to 50%. Cromwell Owner also acts as asset coordinator and property manager in respect of the Property.

The ownership and management of the Property (“Project Odyssey”) was funded by loans provided under a syndicated facility agreement (“SFA”) dated 20 May 2020, as amended from time to time and most recently amended on 15 May 2024 by six lenders. The joint and several borrowers under the SFA are Odyssey FinCo and Cromwell VAC Finance Pty Limited (“Cromwell Borrower) (together, “Borrowers”). The guarantors under the SFA include Odyssey Owner, Cromwell Owner and Cromwell Property Securities Limited ACN 079 147 809 as Responsible Entity of Cromwell Diversified Property Trust ABN 30 074 537 051 (“Cromwell RE”) (together, “Guarantors”). The Borrowers and Guarantors granted security in favour of a security trustee to be held on security trust pursuant to a security trust deed dated 20 May 2020 between, among others, the Borrowers, the Guarantors, the security trustee and Global Loan Agency Services Australia Pty Ltd ACN 608 829 303 (“Agent”) (“Security Trust Deed”). The security granted in favour of the security trustee includes a real property mortgage over the Property (“Mortgage”) granted by each of the Cromwell Owner and the Odyssey Owner. As at 27 February 2026, the total amount owing under the SFA is approximately $179 million (“Secured Debt”) comprised of amounts under Facility A1 ($72 million); Facility A2 ($72 million); Facility B1 (approximately $15,048,391.79); Facility B2 (approximately $15,048,391.79); and capitalised interest on the facilities (totalling approximately $5,510,008.62) (together and severally, “Outstanding Amounts”). While the obligations of the Borrowers under the SFA are joint and several, the Financiers have limited recourse against Cromwell RE and Cromwell Owner.

There is evidence that the Borrowers first breached a loan to value covenant (“LTV Covenant”) in around January 2024 (“LTV Covenant Breach”) and, on 11 January 2024, the Borrowers received waivers from the Financiers in respect of the LTV Covenant Breach. On 15 May 2024, the SFA was amended by an amending Deed (“SFA Amending Deed”)which, inter alia, increased the threshold under the LTV Covenant from 65% to 75%; introduced a requirement for a further valuation of the Property; and introduced an “Equity Deposit” which required Odyssey Owner and Cromwell Owner to place $7.4 million on deposit with the Financiers for use only in accordance with the “Equity Budget” which was primarily focussed on capital expenditure on the Property. In February 2025, there was another breach of the LTV Covenant.

The Borrowers then did not repay all Outstanding Amounts when due (22 April 2025). On 29 April 2025, the Agent issued to the Borrowers a Notice of Default in respect of a subsisting “Specified Default”, namely the non-payment of the Secured Money (as defined), which declared that the Secured Money was due and payable (“Non-Payment Default”).

Between January 2025 and January 2026, Cromwell Borrower and Odyssey FinCo engaged in lengthy negotiations with each other and the Financiers in relation to refinancing the Secured Debt and Odyssey FinCo’s proposed purchase of Cromwell Owner’s 50% interest in the Property. The Financiers also granted waivers and extensions for the LTV Covenant Breach and the Non-Payment Default; and the parties entered into a Forbearance Agreement dated 30 June 2025. The expiry date of the “Forbearance Period” as defined in the Forbearance Agreement has since been extended several times. The parties also entered into a binding contract for the sale of Cromwell Owner’s 50% interest in the Property to Odyssey FinCo on 24 July 2025 (as amended from time to time) (“Contract of Sale”).

Broadly, the proposed Scheme will give effect to Odyssey FinCo assuming all of the obligations of Cromwell Borrower in respect of the repayment of amounts outstanding under Facility A2 and Facility B2, such that Odyssey FinCo will become the sole borrower under the SFA; permit the transfer of Cromwell Owner’s 50% interest in the Property to Odyssey Owner pursuant to the Contract of Sale, subject to the Mortgage and otherwise give effect to the release of the Cromwell Parties (as defined) from their obligations and liabilities under the balance of the Finance Documents (as defined), including the General Security Deed and Specific Security Deed (again, as defined); make a new working capital facility (Facility C) available to Odyssey FinCo; and make amendments to the terms of the Finance Documents, including amendments to the maturity date and the interest rates; establish an Interest Service Account (as defined); and put in place a Fund Guarantee, being a guarantee given by each Fund Guarantor (as defined) in favour of Odyssey Owner. If the Scheme is implemented, the current arrangements between the Cromwell Parties, Odyssey FinCo and Odyssey Owner will also be terminated.

I made the orders sought by Odyssey FinCo at the conclusion of the first Court hearing in respect of the scheme on 9 March 2025. These are my reasons for doing so, and I have drawn on the helpful submissions of Mr Izzo, with whom Ms Ng appears for Odyssey FinCo, in this judgment.

Odyssey FinCo reads the affidavit dated 5 March 2026 of Mr Alan Retford, one of its directors, in support of the application. Mr Retford there outlines Odyssey FinCo’s arrangements with the Financiers and the background to the Scheme, including the supporting of several Financiers for the Scheme. He summarises the proposed Scheme and the conditions precedent to the Scheme. He also addresses various alternatives to the Scheme to effect a restructure of Project Odyssey by way of a consensual refinance or a third-party refinance, which have not proceeded. Mr Retford also refers to an independent expert report in respect of the Scheme, outlines the consideration of the Scheme by the directors of Odyssey FinCo and sets out the verification process adopted in respect of the Explanatory Statement. He also deposes to the consent of the proposed chair and alternate chair of the Scheme Meeting and the consent of the scheme administrator to act; outlines the proposed despatch of documents relating to the Scheme Meeting to Creditors; deals with the provision of the Explanatory Statement to the Australian Securities & Investments Commission (“ASIC”) and subsequent communications; and leads evidence in support of an application to dispense with publication of an advertisement of the second Court hearing.

Odyssey FinCo also reads the affidavit dated 9 March 2026 of its solicitor, Ms Caitlin Murray which addresses the preparation of a supplementary independent expert report and consequential changes to the Explanatory Statement. By an affidavit dated 9 March 2026, Ms Stephanie Hanna, also a solicitor for Odyssey FinCo, deals with verification of the scheme booklet. By his affidavit also dated 9 March 2026, Mr Cameron Mew, a solicitor acting for Cromwell Borrower, refers to an email from the Chief Financial Officer of the Cromwell Property Group (of which Cromwell Borrower is a member) addressing the financial position of Cromwell Borrower.

Odyssey FinCo also tendered a letter dated 6 March 2026 from ASIC to Odyssey FinCo (Exhibit A1) and an email dated 9 March 2026 from ASIC to Odyssey FinCo’s solicitors (Exhibit A2).

Mr Izzo rightly submits that the Court’s role at a first Court hearing in respect of a creditors’ scheme is primarily to determine, in the exercise of its discretion, whether to convene a scheme meeting and approve the explanatory statement. The Court will need to be satisfied of several matters, namely that the plaintiff is a “Part 5.1 body”; the proposed scheme is an “arrangement” within the meaning of s 411 of the Act; there has been proper disclosure to scheme creditors; the scheme is bona fide and properly proposed; ASIC has had a reasonable opportunity to examine the proposed scheme and explanatory statement, to make submissions and has had 14 days’ notice of the proposed hearing date of the first Court hearing; and the procedural requirements of the Supreme Court (Corporations) Rules 1999 (NSW) (“Corporations Rules”) have been met. I am satisfied that, for the reasons identified by Mr Izzo, each of the preconditions to the exercise of power in s 411(1) of the Act is satisfied in this case.

Mr Izzo also rightly submits that, if the preconditions to the exercise of power under s 411(1) of the Act are satisfied, then the Court will determine whether to exercise its power under s 411(1) of the Act. The Court will consider whether the proposed scheme is fit for consideration at the proposed scheme meeting, in the sense that it is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it on the hearing of a petition which is unopposed; and that creditors are to be properly informed as to the nature of the scheme before the scheme meeting: Re HIH Casualty and General Insurance Ltd (2005) 56 ACSR 295; [2005] NSWSC 1180 at [6]; Re Boart Longyear Ltd (2017) 121 ACSR 328; [2017] NSWSC 567 at [75]–[76] (“BLY 2017”); Re Boart Longyear Ltd [2021] NSWSC 982 at [32]–[35] (“BLY 2021”); Re One Funds Management Ltd [2023] FCA 1212 at [9] (“One Funds Management”).

I am also satisfied that the Court should exercise its discretion to convene the scheme meeting, First, as Mr Izzo points out, the directors of Odyssey FinCo have considered the proposed debt restructuring and acquisition of the Property pursuant to the Scheme and have authorised this application and the proposed Scheme. Second, several Financiers support the proposed Scheme, although it appears that one does not or may not. Odyssey FinCo and the Cromwell Parties entered into a restructuring support agreement dated 23 January 2026 (“RSA”), and certain of the Financiers (“Participating Creditors”) have also acceded to the RSA by way of accession deeds each dated 23 January 2026. The Participating Creditors together total 90.8% of Odyssey FinCo’s share of the Secured Debt as at 13 February 2026.

Third, an independent expert report (“IER”) and supplementary independent expert report (“Supplementary IER”) were prepared by Mr Morgan Kelly of Ernst & Young. Those reports constitute Annexure D to the Explanatory Statement and are summarised in section 7 of the amended Explanatory Statement as amended. In the IER, Mr Kelly expressed the view, on identified assumptions, that Odyssey FinCo will be solvent if the Scheme is implemented; and, if the Scheme is not implemented, Odyssey FinCo will be insolvent. Mr Kelly has also calculated an estimated return to Creditors from Odyssey FinCo if the Scheme does not proceed. In the Supplementary IER, Mr Kelly considered the nature and financial position of Cromwell Borrower and whether it would be able to satisfy its 50% share of the Secured Debt if the Scheme Creditors (as defined) took steps to enforce against the Property; and the expected dividend to the Scheme Creditors if Odyssey FinCo were to be wound up within 6 months of the hearing of this application. Mr Kelly there expressed the opinion that, if the Scheme Creditors took steps to enforce against the Property, Cromwell Borrower will be unable to satisfy its 50% share of the Secured Debt, and he there provided an estimate of the shortfall to Scheme Creditors on Cromwell Borrower’s 50% share of the Secured Debt. Mr Kelly also addressed the expected dividend available to the Scheme Creditors from both Odyssey FinCo and Cromwell Borrower, if Odyssey FinCo was wound up within 6 months and having regard to the Cromwell Borrower financials. The Financiers will have the opportunity to take this information into account in determining how to exercise their votes at a scheme meeting.

Mr Izzo also submits, and I accept, that there is no apparent reason why the Scheme would not, in due course, receive the Court’s approval if the necessary majority of votes is achieved. On the expert’s analysis, Odyssey FinCo will be insolvent if the Scheme does not proceed, with Scheme Creditors expected to receive between 73 to 87 cents in the dollar if the company is wound up within 6 months (having regard also to amounts which are recoverable from Cromwell Borrower). On the other hand, if the Scheme proceeds, Odyssey FinCo will be solvent and is projected to become cashflow positive from October 2027, so as provide an avenue for repayment of the Amended Secured Debt (as defined) by September 2029.

Mr Izzo also brings several matters to the Court’s attention. First, prior to the date of the Explanatory Statement, each Creditor was invited to participate in Facility C in the same proportion in which that Creditor participates in the aggregate facilities under the SFA. As at the date of the Explanatory Statement, three Creditors have provided written notice to Odyssey FinCo committing to participate in Facility C. The Creditors who are yet to participate are able to accept the offer to participate in Facility C for its proportion by notice in writing to Odyssey FinCo prior to 5.00pm on the business day immediately preceding the Second Court Date (“Acceptance Date”). If the Creditors yet to participate do not take up the Facility C offer by the Acceptance Date, those Creditors will not participate in Facility C, and another Creditor has committed to taking up non-participating Creditors’ proportions of Facility C. Mr Izzo submits and I accept that this matter provides no reason not to convene the Scheme Meeting, and that whether or not a Creditor elects to take up that opportunity is not class creating, and does not require those Creditors who elect to participate in Facility C to constitute a separate class from those Creditors who elect not to participate in Facility C; or require the creditor which takes up additional shares to constitute a separate class from those Creditors who elect to participate in Facility C and those Creditors who elect not to participate in Facility C: First Pacific Advisors LLC v Boart Longyear Ltd (2017) 320 FLR 78; [2017] NSWCA 116 at [80]–[82].

Second, it is proposed to be Mr Kelly, who prepared the IER, will also be the scheme administrator. Mr Izzo submits and I accept that Mr Kelly’s future engagement as scheme administrator does not materially compromise the independence of the IER and that role has been disclosed in section 6.6 of the Explanatory Statement; and that, given Mr Kelly’s familiarity with Odyssey FinCo through the IER, it is efficient if Mr Kelly is also the scheme administrator. This matter also gives rise to no reason not to convene the scheme meeting: Re Atlas Iron Ltd (2016) 112 ACSR 554; [2016] FCA 366 at [61]; BLY 2017 at [89]; BLY 2021 at [52]; One Funds Management at [16]. Third, the Explanatory Statement will be sent to each of the Creditors by email to the email address identified in Schedule 2 of the SFA for the sending of notices under the SFA; and the proposed Scheme Meeting will be convened, held and conducted in accordance with the Notice of Scheme Meeting annexed to the Explanatory Statement and the proposed orders, which orders include, modifications to Division 75 of the Insolvency Practice Rules (Corporations) 2016 (Cth). These matters also give rise to no reason not to convene the scheme meeting: BLY 2021 at [65].

Odyssey FinCo also seeks an order dispensing with advertising under r 3.4 of the Corporations Rules, where five of the six Creditors under the SFA are Participating Creditors under the RSA and a reminder email will be sent to the only Financier who has not signed up to the RSA within two business days of the first Court hearing. I am satisfied that order is properly made.

For these reasons, I made the orders sought by Odyssey FinCo at the first Court hearing on 9 March 2026.