Embattled property group Grocon has appointed KordaMentha Restructuring as the administrator to its troubled legacy construction arm to help steer it through as the business tackles litigation with the NSW government.
Administrators Andrew Knight, Craig Shepard and Mark Korda will oversee 39 Grocon companies, but not the companies associated with Grocon’s current ongoing projects.
Melbourne-based Grocon made its name in Victoria with the construction of the Rialto tower and Crown casino on Southbank. It was founded 73 years ago by Luigi Grollo and after his death has been run for by his grandson Daniel Grollo.
In NSW it is embroiled in legal action with the government over a $270 million claim that Infrastructure NSW (iNSW) undercut its high-rise aspirations in Central Barangaroo, forcing it to sell its share in the project at a steep discount to Chinese player Aqualand.
Mr Knight said the current projects will continue while the future of the Grocon Group is decided.
“The Grocon companies involved in litigation with the NSW government are also not in administration and remain in the control of Daniel Grollo,” Mr Knight said.
‘Our priority is to assess the business and begin to work towards finding the best outcome for all stakeholders.’Andrew Knight
“Our priority is to assess the business and begin to work towards finding the best outcome for all stakeholders.”
Mr Knight said the first meeting of creditors would be held on Wednesday December 9. The future of Grocon would be decided at the second meeting of creditors, which is likely to be held mid to late December.
On Thursday Grocon was in the Supreme Court of NSW with iNSW to get documents relating to the Barangaroo development. The case before Justice Henry was adjourned until Friday, December 4.
Grocon’s lawyer Michael Hodge QC, was seeking production of the Crown, Lendlease and iNSW settlement deed concerning the arrangements agreed between those parties regarding the sight lines for Barangaroo.
The deed is expected to have a significant impact on the building heights for Grocon’s Central Barangaroo project.
Mr Hogde argued that the settlement deed was signed prior to Grocon’s forced exit from the Central Barangaroo project.
iNSW, Crown and Lendlease, are resisting production other than production of a redacted form of the document to Grocon’s legal advisers.
It was also revealed in the Supreme Court case that the sightlines resolution notice was issued to Aqualand just 24 hours after Grocon exited the project in September 2019, with a sale of its development rights to Aqualand.
Source: Thanks smh.com