This article is from the Australian Property Journal archive
CREDITORS will not place collapsed construction giant Grocon in liquidation, voting in favour of a revised deal pooled deed of company arrangement that includes a $6 million upfront payment to the Australian Taxation Office.
That alone will cover nearly half of the group’s debt and was a key component of creditors of all 88 Grocon companies placed in administration between November and February approving of the deal.
KordaMentha’s 1,500-plus page report handed down in March revealed 88 subsidiaries had likely been insolvent since February of 2019.
The group owes creditors about $100 million, including the $14 million in unpaid GST owed to the ATO and not counting intercompany loans.
KordaMentha recommended placing the entities into a deed of company arrangement, believing the rescue plan to be creditors’ best interests given that administrators were “not certain of the recoverability of the companies’ assets in a liquidation scenario”.
Grocon chief executive Daniel Grollo put forward a sweetened offer at a meeting on Thursday that included an additional $3.32 million on top of $10 million into funds to be distributed. The ATO’s $6 million would come from this pool.
Creditors such as APN Property were reportedly furious about the revision.
The ATO’s return is lifted from 20.5 cents in the dollar to 43.9 cents, while for other creditors it remains at a similar 100 cents in the dollar for employees and small creditors and 2.9 cents for large creditors, up from 2.8 cents.
