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Grocon Avoids Liquidation with Creditors’ Backing

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Grocon chief executive Daniel Grollo has won the backing of creditors as they accepted his proposed Deed of Company Arrangement at a meeting on Thursday.

Grollo said the agreement would allow him to focus on the group’s $270-million compensation case against Infrastructure New South Wales currently before the New South Wales Supreme Court.

The agreement by all creditors including the Australian Taxation Office means the collapsed Grocon construction empire will not now be liquidated.

“I have been overwhelmed and humbled by the support I have received from so many people and I am gratified that today, creditors and stakeholders have joined us in our fight to expose iNSW’s unconscionable and wrongful conduct,” Grollo said.

“The merits of our case against iNSW have now been assessed by both sophisticated litigation funders, and KordaMentha and its independent legal advisors.

“With the acceptance of the DOCA today, the case now has the backing of the Group’s creditors, as well as the litigation funders.”

Grollo said he had “no doubt” that their case would be successful and creditors would be rewarded for their decision to back Grocon’s DOCA.

Grocon is currently suing Infrastructure NSW (INSW) for $270 million, claiming the now-abolished Barangaroo Delivery Authority (BDA) was aware for years that the Crown and Lendlease sight lines dispute would have a material impact on its now-abandoned Barangaroo project.

Under the accepted DOCA, all employee entitlements would be paid in full, creditors with claims under $10,000 would be paid and the ATO would receive $6 million.

Other creditors would receive a distribution from an upfront cash contribution, and additional payments would be made to these creditors on the successful outcome of the iNSW court case.

The matter is due back in the NSW Supreme Court in July.

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Article originally posted at: https://www.theurbandeveloper.com/articles/grocon-avoids-liquidation-with-creditors-backing