Grollo faces questions from creditors over $ 90 million business loans
Real estate developer Daniel Grollo has apologized to creditors for “having to go through” the administration of 88 companies, but avoided giving more details on the $ 90 million in loans associated with the Grocon companies.
Businesses and individuals, who owe around $ 100 million, will have to wait another 10 days for a decision on the future of the collapsed group after Tuesday’s creditors meeting adjourned.
Dozens of wealthy real estate developers’ companies were fired for administration earlier this year, a situation Mr Grollo attributes to a $ 270 million legal dispute with Infrastructure NSW over the development of Central Barangaroo in Sydney.
“We didn’t want to do this. Our hand has been forced by Infrastructure NSW, ”he told creditors.
Infrastructure NSW defends itself against claims.
Mr Grollo addressed creditors on Tuesday and told meeting attendees that they should back his plan to restructure the group with a Corporate Arrangement Act (DOCA), which would see employees paid immediately.
[dm-listing-recommendation experimentname=’midcontent-listings’ positiononpage=’midcontent’]
“Many of you have contacted me to express your empathy and support me,” he said. “I apologize to the creditors for having to go through this.”
The restructuring plan was supported by KordaMentha directors, who said the vast majority of companies in the administration were without assets and without funds or resources.
Craig Shepard, KordaMentha partner, said DOCA would benefit creditors by dramatically reducing the cost and complexity of liquidating Grocon businesses and allowing immediate payments to employees and small creditors.
This would provide creditors with a better and faster return than they are likely to receive from liquidating companies, he said.
But several major creditors, including APN Property Group and the Australian Taxation Office, have requested an adjournment of the creditors’ meeting for more information on the business transactions of the collapsed companies.
APN and another creditor, Impact Investment Group, questioned why more information was not available to creditors on the $ 90 million in intra-company loans identified in the administrator’s report.
“There is information that is missing regarding … the funds that were withdrawn by Daniel Grollo personally and his wife,” said AFN representative Anthony Simpson.
Paul Belcher, of the Impact, asked: “Is Daniel Grollo comfortable providing [more] information to creditors and if not, why not, what should he hide? “
To which Mr Grollo replied: “I think our team provided all the information and cooperated.”
APN wrote to directors last week asking for a 45-day adjournment of the creditors’ meeting, saying it was “unreasonable and impossible” to expect creditors to fully understand the 1,567-page report of the administrator without further time.
Mr Shepard said he disagreed with adjourning the meeting because the outcome would not be different in 10 days, but would do so to avoid dividing creditors, which would be a “disastrous outcome. “.
[dm-listing-recommendation experimentname=’below-content-listings’ positiononpage=’belowContent’]