This article is from the Australian Property Journal archive
CREDITORS of failed property developer Ralan Group have voted to liquidate 51 companies and at the same time, accept the Deed of Company Agreement (DOCA) proposed by the director William O’Dwyer for various Gold Coast projects.
A final creditors’ meeting voted to liquidate one company, dealing with the Arncliffe (Sydney) development and signed a DOCA relating to various Gold Coast projects, via seven different companies.
As a result, Ralan Arncliffe Pty Limited is now in liquidation whilst the creditors that voted in favour of the DOCA now have to wait up to 15 days for the companies to sign the DOCA giving effect to the outcome.
All other companies in the group entered into liquidation. That is a further 50 entities.
Administrator Grant Thornton’s national managing partner financial advisory Said Jahani said by liquidating the companies, the process to recoup any capital to return to creditors can begin.
“Through our investigation it has become abundantly clear that Ralan has been unable to pay its creditors for some time. By liquidating the majority of companies in the group, we can attempt to recoup as much as possible for creditors’ – based on the potential actions available to a liquidator pursuant to the Corporations Act.
“For Ralan Arncliffe, there was a majority in both value and number for liquidation and against the DOCA.
“As the creditors of the DOCA entities (ie Gold Coast projects) have voted in favour of the DOCA, the onus will now be on the director, O’Dwyer who proposed the DOCA to reveal the identity of the mystery developer, the location of future development sites and details of the discount mechanics for creditors to consider whether they wish to enter into new sale contracts,” Said added.
“For the 7 DOCA entities (relating to the Gold Coast projects), there were a majority in both value and number for DOCA and against liquidation for 6 of the entities. However, for one of the DOCA entities, Ralan Paradise No 2 Pty Limited we had a split vote meaning the Chairman (Said Jahani) has a casting vote. For this entity: 112 creditors owed $60,307 voted for the DOCA but 103 (ie less) creditors owed $87,720 (ie more) voted against the DOCA. This vote was swayed by a single creditor with a claim of $63,000 who voted against the DOCA.”
Meanwhile Grant Thornton has presented the corporate regulator with its findings. Last month the administrator likened Ralan to a ponzi scheme.
“ASIC has been presented with our full report, and they will assess next steps in terms of disciplinary action or charges related to the sole director, William O’Dwyer,” Said said.
Whilst Said recommended against the DOCA’s in the report to creditors, the chairman’s casting vote was used to pass the resolution for the DOCA for this entity because:
“1. On a stand-alone basis there will not be any recoveries available to creditors in a liquidation for this entity.
“2. The total value of creditors in this entity are c. $382K and this equates to the value of unreleased deposits by purchasers in this entity. We currently hold in a trust account, cash of a similar value relating to the quantum of unreleased deposits from purchasers. Once these funds are returned (after allowing for costs), there will be a very small amount of creditor claims left in a liquidation. These funds will be returned regardless of whether this entity enters a DOCA or into liquidation.
“3. In casting a vote for the DOCA, the creditors who voted against the DOCA are not precluded from bringing a claim against William O’Dwyer.
“4. We are conscious that the majority of creditors in the combined DOCA entities voted for the proposal – $93m (703 votes) versus $60m (570 votes).
“The Gold Coast entities all needed to vote in favour of the DOCA for it to proceed. Regardless of the case we made for liquidation it is the clear wish of the majority of creditors in these entities to proceed with the proposed DOCA. To allow this to happen, and in the knowledge that the creditors of the entity with the split vote will be no worse off, I cast my vote in favour of the DOCA for this single entity with the split vote,” Said concluded.
