Court battle to determine collapsed builder’s future, creditors owed $60m

Construction company Grocon owes creditors about $60 million but could be saved from the brink if its bitter Barangaroo court battle succeeds.

The company behind some of Australia’s most iconic buildings owes creditors about $60 million but could be saved from the brink if its legal battle over the Central Barangaroo project in Sydney is successful.

Office tower and residential apartment builder Grocon announced last week it would reluctantly appoint administrators, 66 years after the private group was founded by chief executive Daniel Grollo’s grandfather Luigi.

KordaMentha Restructuring was on Friday appointed administrators to 39 Grocon Group companies but not those associated with its ongoing projects – the Ribbon development in Sydney and Northumberland development in Collingwood, Melbourne.

“We understand that these projects will continue while the future of the Grocon Group is decided,” administrator Andrew Knight said.

Grocon’s Ribbon project at Darling Harbour. Picture: NCA NewsWire/Jenny Evans

Also, the Grocon companies that are embroiled in litigation with the NSW government over its handling of the Central Barangaroo project are not in administration and remain under Mr Grollo’s control.

Grocon alleges rival Lendlease and Crown Resorts reached a secret deal with the state government on building heights last year, protecting the rights of Crown Towers – now Sydney’s tallest building – to unobstructed views of the harbour.

That killed off Grocon’s plans to build smaller commercial and residential towers nearby.

The Crown Towers in Sydney dominates the Sydney skyline. Picture: Christian Gilles

Grocon is seeking compensation for lost profits in the project that could be anything between $60 million and $270 million.

If successful, creditors would be paid in full, Mr Grollo said, and the companies could be revived.

Mr Grollo alleges Infrastructure NSW was aware for years that the dispute over the views would torpedo Grocon’s proposal but withheld the information and instead continually confirmed the height the company could build the commercial and residential towers.

He said the reassurances led to Grocon continuing to invest in the project.

Grocon built some of Australia’s most iconic buildings, including Rialto Towers in Melbourne. Picture: NCA NewsWire/Daniel Pockett

Grocon says it was forced to vest its development rights in a fire sale to fellow consortium member Aqualand, six years after its began pouring money in.

The matter has been listed for the NSW Supreme Court on December 4, while the first meeting of creditors will be held the following week on December 9.

Grocon’s future would be decided at the second meeting, likely mid to late December, the administrators said.

“Our priority is to assess the business and begin to work towards finding the best outcome for all stakeholders,” Mr Knight said.

Originally published as Court battle to determine collapsed builder’s future, creditors owed $60m