Creditors target Daniel Grollo’s $40m New York penthouse

Daniel Grollo’s $40m luxury US apartment is under scrutiny as the construction scion tries to sell the Manhattan bolthole and creditors clamour for more money.

Daniel Grollo, in his New York apartment overlooking Cenral Park in 2012. Picture: Craig Ruttle.

Creditors are squaring up to push administrators to act to capture the sale proceeds of Daniel Grollo’s luxury New York apartment after administrators concluded they could only recover 10 per cent of its $40m price tag.

The apartment, purchased for $14.8m in 2012, was used as home base for the Grollo family after it relocated to New York, with photos published at the time showing his family seated at the windows with sweeping views.

The source of funds to purchase the apartment in 2012 is unknown, but creditors have questioned whether much of the money was lent from Grocon to Mr Grollo, who then passed the money on to a corporate entity which holds the apartment.

The creditors report prepared by KordaMentha reveals $13m in loans made to an entity called Ploutus through $10.2m in direct loans from Grocon as well as another $2.7m made to Mr Grollo were used to fund renovations and purchase additional lots.

Apartment at 106 Central Park South, 21A-E New York, which is owned by a corporate entity linked to Daniel Grollo.

KordaMentha administrators say they can claw back $4.8m from Ploutus’ share of the sales, but believe Mr Grollo’s share of the loans is worth nothing.

The former Grocon boss is locked in a battle over the fate of his grandfather’s construction empire, which slipped into administration last year owing more than $100m to unsecured creditors. The latest supplementary report to Grocon creditors is due on Thursday.

The creditors report reveals KordaMentha administrators are not confident they will be able to recover anything close to the sums loaned out from Grocon to Mr Grollo and associated entities over the years.

Many creditors were set to receive as little as 3c in the dollar.

Creditors are questioning what will happen to funds from the sale of the apartment, which is controlled by a corporate entity and sits outside the current Grocon administration.

The entity, called 106 Central Park South, boasts as director MinterEllison head of private wealth Ian Russel Davis.

106 Central Park South holds the apartment as a trustee.

However, the corporate entity is registered to the Melbourne office address Mr Grollo is currently operating the Grocon build-to-rent business from. Mr Grollo was present when The Australian visited the office on Friday.

Mr Davis and Mr Grollo declined to answer questions put to them regarding the ownership of the apartment.

Executive chairman and CEO of Grocon, Daniel Grollo arrives at law firm King Wood Malleson's on Collins Street. Aaron Francis/The Australian

A property search also reveals several other lots in the building have been purchased by Central Park South in recent years.

New York State tax data also reveals significant sums of unpaid tax on the properties owned by the Grollo-linked corporate entity, topping $330,000 outstanding in unpaid property tax.

Sitting on the southern edge of Central Park, the luxurious apartment is listed for sale by Sotheby’s International Realty for a cool $US32.5m.

Offering four bedrooms and bathrooms across 5,450 square feet, the apartment boasts “a modern museum-quality renovation” with an interior fitted out by “world-renowned interior design shop of Daquino Monaco”.

Sotheby’s says any potential buyer would take possession of “a total renovation including all new flooring of urethane and mosaic tiling, all new tilt and turn windows, floating and faceted walls with soundproofing, and integrated Lichtenstein inspired murals.”

“Other highlights include glass-clad columns, new plumbing with a filtration system, and new ac and heating with humidification: spectacular resin doors, modern built-ins, and top of the line fixtures.”

The Grollo residence on Central Park South sits in a building owned by former US president Donald Trump, with the Grollo scion rubbing shoulders with fellow heir Eric Trump during his time in the building.

That’s despite the eye-watering price the New York pad is set to command from prospective buyers.

Apartment at 106 Central Park South, 21A-E New York, which is owned by a corporate entity linked to Daniel Grollo.

The fate of the construction company was set to be decided in March, with creditors to vote on Mr Grollo’s rescue plan for the construction company that would see him tip in $10m of his own money to sweeten the potential return.

But at the last minute lawyers for Mr Grollo sent administrators a letter proposing to deliver further “benefits for Grocon creditors”.

However, some creditors have pushed for liquidators to be appointed to unwind millions in loans and force Mr Grollo to hand over documents.

Originally published as Creditors target Daniel Grollo’s $40m New York penthouse