Daniel Grollo pitches sweetener for collapsed Grocon

High-stakes Grocon creditors’ meeting is adjourned after Daniel Grollo proposes a new offer to revive the collapsed property major.

Daniel Grollo from Grocon. Picture: Stuart McEvoy.

The high-stakes Grocon creditors’ meeting early Thursday has adjourned for 35 days after Daniel Grollo proposed a sweetened offer to bring the property construction major out of administration.

KordaMentha administrators told the meeting they had received the letter from King Wood Malleson proposing the deed of company arrangement proposed in March be amended.

The sweetened deal floated in the creditors meeting is set to deliver further “benefits for Grocon creditors,” but did not provide specific details.

The adjorment of the meeting for 35 business days would take resolution of the Grocon crisis towards the end of May.

It is understood the proposal may be an attempt to get more creditor’s in favour of the rescue plan and away from an attempt to liquidate Grocon.

Earlier Thursday creditors owed millions were set to decide whether to accept an initial rescue plan proposed by Mr Grollo to pay out what little remains in the coffers of the business plus a $10m contribution from himself, or push for liquidation.

The vote was set to be tight as it is understood major creditors were looking to back the deed of company arrangement being pushed by Mr Grollo, although some creditors were pushing for liquidation.

Mr Grollo proposed the plan to rescue Grocon after 88 corporate entities, much of the Grocon Group, were tipped into administration over the past year, owing almost $100m.

KordaMentha administrators Craig Shepard and Andrew Knight have taken charge of the group of companies, holding court in what have proven to be several fiery creditors calls.

The last meeting of Grocon creditors erupted in calls for Mr Grollo to come clean on the extent of loans between Grocon entities and himself and associated entities.

The potential liquidation and dissection of the Grocon corporate had been complicated by legal action lobbed by lawyers acting for Mr Grollo’s ex-wife Katherine, who have fired missives at administrators over the potential loss of the couple’s unfinished luxury apartment and lucrative rooftop of the Eureka tower.

But even if Grocon emerges from the administration process with a signed deed of company arrangement that sets the business on a path out of the depths, the business will be a shadow of its former self.

Grocon insiders say the fate of the business may have been sealed long before the recent troubles tipped the Grollo empire into administration.

One well-placed former Grocon figure suggested the 2011 split of Grocon, on the eve of Daniel Grollo assuming control of the group, left it undercapitalised to back all the national projects it had taken on.

A signal of the trouble Grocon found itself in were steps by the business to place two entries into administration in 2018 after a $28m dispute with Dexus over property in Queensland.

Grocon’s foray into Queensland hurt the developer.

Originally published as Daniel Grollo pitches sweetener for collapsed Grocon