Property developer Daniel Grollo has apologised to creditors for “having to go through” the administration of 88 companies, but he avoided giving further details about $90 million in related Grocon company loans.
Companies and individuals, owed about $100 million, will have to wait another 10 days for a decision on the collapsed group’s future after Tuesday’s creditors’ meeting was adjourned.
Dozens of the wealthy property developer’s companies were tipped into administration earlier this year, a situation Mr Grollo blames on a $270 million legal dispute with Infrastructure NSW over the Central Barangaroo development in Sydney.
“We didn’t want to do this. Our hand was forced by Infrastructure NSW,” he told creditors.
Infrastructure NSW is defending itself against the claims.
Mr Grollo fronted creditors on Tuesday and told the meeting’s attendees they should support his plan to restructure the group with a deed of company arrangement (DOCA), which would see employees paid out immediately.
“Many of you have contacted me expressing empathy and backing me,” he said. “I apologise to creditors for having to go through this.”
The restructure plan was backed by administrators KordaMentha, who said the vast majority of companies in administration were assetless and without funds or resources.
KordaMentha partner Craig Shepard said the DOCA would benefit creditors by significantly reducing the cost and complexity of winding up Grocon’s companies and allow immediate payments to employees and small creditors.
It would provide a better and faster return to creditors than they were likely to receive through liquidating the companies, he said.
But several large creditors, including APN Property Group and the Australian Taxation Office, sought to have the creditors’ meeting adjourned to seek more information about the business dealings of the collapsed companies.
Both APN and another creditor, Impact Investment Group, questioned why more information wasn’t available to creditors about the $90 million in intra-company loans identified in the administrator’s report.
“There’s information that’s lacking in relation to .. funds that have been taken out by Daniel Grollo personally and his wife,” APN’s representative Anthony Simpson said.
Impact’s Paul Belcher asked: “Is Daniel Grollo comfortable providing [more] information to creditors and if not, why not, what’s he got to hide?“
To which Mr Grollo replied, “I feel our team has provided all the information and co-operated.”
APN wrote to the administrators last week requesting a 45-day adjournment to the creditors meeting, saying it was “unreasonable and impossible” to expect creditors to fully understand the administrator’s 1567-page report without more time.
Mr Shepard said he disagreed with adjourning the meeting as the outcome would be no different in 10 days’ time but would do so to avoid dividing the creditors, which would be a “disastrous” outcome.