Bensons avoids liquidation as creditors approve bailout deal
Bensons Property lives to build another day as creditors back a deal put forward by owners the Jreissati family, with work to continue on 1300 apartments in its $1.5bn project pipeline.
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Collapsed property developer Bensons Property Group has been saved from liquidation after creditors voted overwhelmingly in favour of a bailout deal backed by the company’s founder and chief executive Elias Jreissati.
The deal with creditors, which was recommended by administrators, also keeps safe for now hundreds of jobs linked to Bensons’ $1.5bn pipeline of property development projects as the company progresses to bring more than 1300 apartments to the market.
In a meeting of creditors on Friday, 168 votes to the value of $880m supported the deed of company arrangement (DOCA) while three votes to the value of $7.3m were against it.
The acceptance of the DOCA means that Bensons will avoid being placed into liquidation by its administrators, which could have happened if the DOCA was rejected. That would have likely derailed the completion and sale of apartments and property developments currently on the Bensons books.
Bensons collapsed two days after Christmas in one of the largest property developer failures in decades, with estimated total liabilities and money owed to creditors of $813.24m.
A report issued by administrators KordaMentha last week revealed that Bensons might have shown indications of insolvency as early as July 2023 as property sales for key projects dried up, debt mushroomed and its cash on hand dwindled. Bensons had suffered significant financial losses since 2022 and had a working capital deficiency at each financial year-end between 2020 and 2024.
However, Bensons’ directors sought “safe harbour” protection in 2023 as the spectre of insolvency emerged, potentially giving them protection. The KordaMentha report said its preliminary view was that the directors will probably be able to rely on the protection of safe harbour provisions.
Bensons was founded by Mr Jreissati, an immigrant from Lebanon who built up the company from scratch and a well-known philanthropist, art collector and winery investor who made a name for himself building luxury apartment towers.
His family funded and backed the DOCA that was accepted by creditors.
Bensons will seek to progress the DOCA in the coming week and expects to have control returned to its directors and management on or before February 14.
Approval of the DOCA was near unanimous, with 98 per cent of votes (by number of creditors) and 99 per cent (by value of creditors) cast in favour. Throughout the administration process, all jobs were protected, and work on all Bensons-managed sites continued without interruption.
Bensons chief executive Rick Curtis said the company was “deeply humbled” by the trust and support of its employees, trade creditors, project partners and investors.
“We recognise the opportunity we have been given and we are determined to deliver for those who have placed their trust in us,” he said.
The Jreissati family winery in the Yarra Valley, Levantine Hill, was not part of the administration although it was a creditor to Bensons.
Originally published as Bensons avoids liquidation as creditors approve bailout deal
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