Real estate firm The Agency fights administration action over disputed fee

Real estate firm The Agency has made a bid in court to fight an administration action brought by a former director over a disputed fee, winning a ruling that the administration will end on February 1.

The ruling is subject to the real estate group paying $400,000 into the court by January 22.

Investment group Magnolia said it appointed voluntary administrators BDO on Tuesday to pursue the real estate firm over a disputed debt of approximately $385,000, saying it had lost confidence in The Agency Group’s board and its unknown financial position.

Magnolia previously said it bid for shares in The Agency.

The court ordered that the administration would stay in place until February 1 with a hearing scheduled on the same day to allow any creditors to come forward.

The court also ordered that those bringing the administration action be restrained from acting as voluntary administrators or taking any steps in this role, with control of The Agency resting with its directors.

The appointment of administrators is to have no effect, except on what The Agency Group called “technical matters”, pending the determination of the proceedings.

The real estate company’s position is that the appointment of voluntary administrators by Magnolia “was undertaken for the purpose of destabilising The Agency and compelling the company to pay a disputed fee”.

“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,” the group said in a statement to the ASX.

The investment group appointed the voluntary administrators to top-level The Agency Group only, which has no operations in itself.

The Agency has multiple subsidiaries that hold key operational licences, employment contracts and trust accounts, but the administrator is not appointed over any subsidiaries.

The company said it looks forward to shortly releasing its half-yearly unaudited accounts, which it said would show record numbers on key financial metrics.