The man leading the fight for Australia's second airline

Vaughan Strawbridge wants you to think Virgin Australia is a normal administration.

He's worried he can't sell the business. But he's always worried about that.

He's under pressure from some of the country's most influential businessmen. But he says that's a sign of solid interest in the failed airline.

He's working around the clock and not seeing much of his wife and two sons. But that's just part of the job.

The man at the centre of the biggest corporate collapse since Ansett Airlines is calm and matter-of-fact, even as the criticism of how he is handling the process intensifies, with second-round offers for the failed airline due on Friday. He will narrow bidders to two by Monday at the latest, with the aim of presenting a recommended offer to creditors on August 22.

Strawbridge, a partner at Deloitte, might like to regard this administration as normal, but he's probably the only one.

Bidders privately accuse Strawbridge of being out of his depth, running the process too quickly and, also, too slowly. They say he's wrapping everything up in rules, and is even, possibly, risking the company falling into liquidation.

Brookfield Capital, one of the early bidders, pulled out after concerns the money could run out well before the business could be sold. But despite the complaints, on Friday it re-entered the race with an offer for the airline.

Juggling egos

Part of Strawbridge's role is dealing with big names and big egos.

He's in charge of setting the ground-rules to wrangle union bosses, the private equity chiefs and dealmakers from BGH Capital, Bain Capital, Cyrus and Indigo, as well as former Macquarie Group chief executive Nicholas Moore, who has a brief from the federal government to keep an eye on the whole process. And their armies of advisers and consultants.

But this corporate undertaker from Rotorua in New Zealand, who remains a passionate All Blacks supporter and likes to wake-board around Sydney Harbour's Bantry Bay, is taking it all in his stride.

"What drives the controversy is when you have multiple people that see the future of the business, the brand. That's [the controversy] very much part of what we do," he says in an interview with AFR Weekend.

He confesses to being taken aback by the uproar over Virgin's liquidity issues. "I have been surprised by that only because we were very upfront about the cash position on our appointment."

It might have been well flagged, but what's worrying some is that there isn't a clear solution to funding the airline past June 30.

How Strawbridge handles the pressure and the process matters. Because ultimately, how this process ends – including who owns the country's second airline – might come down to his judgment calls.

The one thing I really enjoy is achieving a sale of the business.
— Vaughan Strawbridge

He decides which parties stay in the process, and which ones are weeded out, based on what's in the best interests of the business, and ultimately, the creditors. He sets the terms of engagement.

Ultimately, he may also have the casting vote. A sale requires approval from the majority of creditors in both number and value. If that doesn't occur, the administrator has the casting vote.

Offshore experience

Virgin collapsed owing $6.8 billion. By number, its 9000 employees are the largest group of creditors, owed a collective $450 million, and by value, it is the aircraft lessors and bond holders, which are trying to form a cohesive block to increase their voting clout.

"Ultimately we need someone who believes in the business and is willing to take it on ... the outcome for the creditors will be dependent on the bidders' view around value," he says.

So what does Strawbridge say to the accusations that he's out of his depth, and only just stumbled into the major league?

He's not biting, but does reiterate that large administrations in Australia have been rare in past years.

"I'm very comfortable in my role," he says, adding he's been involved in larger administrations offshore.

Strawbridge – who joined Deloitte 24 years ago, and worked in Thailand during the Asian crisis and then Britain before returning to Sydney in 2005 – has been administrator for some of the larger recent corporate failures: retailers Howards Storage World, Oroton and Harris Scarfe.

During his stint in Britain, where he split his time between the north of England and London, he worked on bigger companies, including advising the Department of Trade and Energy on the level of state funding for British Energy. He also advised the Civil Aviation Authority on restructuring an airline, but says he can't give more details because of confidentiality.

The most challenging process he's been involved in was Oakville Produce, then Australia's largest potato supplier. That involved court cases in the Hague around plant-based rights, and then floods. But, ultimately, they were able to sell the business, he says.

"The one thing I really enjoy is achieving a sale of the business."

"What we [administrators] do is hard. There are a lot of people that are owed money and of lot of people who are hurt."

As administrator, Strawbridge has already made some early judgment calls. In particular, the unusual decision of retaining senior management, including Virgin Australia chief executive Paul Scurrah to continue to run the business.

Firm faith in an open mind

In the majority of administrations, he says, the administrator takes over and runs the company, showing management the door. In this case, that wasn't the best option for the company, which he says wouldn't have been forced into voluntary administration without the COVID-19 pandemic.

Another unusual twist, he concedes, is he isn't working out of the company headquarters. Strawbridge is based in Sydney, in Deloitte's CBD offices, instead of Virgin's Brisbane headquarters.

"I've got a nice self-isolating space," he says. "Most people aren't here [in the office]."

That's because of Queensland's decision to close its borders, though Scurrah has received exemptions to fly down to Sydney a handful of times. And it's also possible because Deloitte has a Brisbane-based team.

"There's a significant amount of time on Microsoft Teams and Zoom. It's definitely a different way to operate," he says on the Skype call with AFR Weekend.

Ask him how he handles the pressure and stays confident in his decisions? He simply says he stays true to himself and relies on his strong team and colleagues. "A lot does come down to a judgment call and that does weigh on us."

The key thing, he says, is to go into a company with an open mind. He doesn't ask management set questions, for example.

Strawbridge has also sought changes to the voluntary administration process, with the help of the courts, by limiting the adminstrators' personal liability.

While some say that he has managed to rewrite the VA process, Strawbridge says that's not the case and he is simply done in groupings what is typically done case by case.

At this rate, with months still to play out in this administration, perhaps even this so-called normal administration might set new standards.