Grocon boss pins construction group rescue hopes on NSW government battle

The boss of collapsed construction group Grocon is in a bitter battle to save his family dynasty.

As Grocon chief executive Daniel Grollo fights the NSW government in a bid to save his collapsed construction group, his estranged wife has made multiple claims against property, including a luxury penthouse.

Administrators KordaMentha lodged their epic 1500-plus page report on Grocon following the second meeting of creditors late on Tuesday, revealing the largely dormant 88 subsidiaries in their hands had greater liabilities than assets and had likely been insolvent since February 2019.

Including more than $14m owed to the Australian Taxation Office and excluding a complex web of intercompany loans, the group owes creditors about $100m in total.

But Mr Grollo is pinning his hopes on winning a court battle with the NSW government over Sydney’s Central Barangaroo project, which he blames for the group’s collapse.

Daniel Grollo is the third generation of his family to run Grocon. Picture: Stuart McEvoy/The Australian.

Grocon alleges rival Lendlease and embattled casino giant Crown Resorts sealed a secret deal with Infrastructure NSW on building heights in 2019, protecting the rights of Crown Tower – Sydney’s tallest building – to unobstructed views of the harbour.

Mr Grollo argues that killed off his group’s plans to build smaller commercial and residential towers nearby and is seeking compensation in the NSW Supreme Court, with a hearing expected next year.

The claim is estimated to be at least $200m, and Mr Grollo has previously said that if the case was successful, he intended to pay out creditors in full and Grocon could be revived.

The administrators have recommended entering into a deed of company arrangement (DOCA) rather than winding up Grocon, saying it is in creditors’ best interests.

KordaMentha said it was “not certain of the recoverability of the companies’ assets in a liquidation scenario”.

The Grollos in happier times. Picture: Twitter/@KatGrollo

There were other considerations too, Korda Mentha said.

“The director’s former wife is making claims to many assets of the group (including real property) and also making financial claims,” the administrators said in the report.

The report revealed Katherine Grollo had made claims over multiple properties in Victoria and NSW, including a 658sq m penthouse on the 80th floor of Eureka Towers in Melbourne, built by Grocon.

It also showed employees would get 100 per cent of what they’re owed under the recommended plan versus 42 cents in the dollar under liquidation.

The Eureka Tower penthouse in Melbourne is at the centre of Ms Grollo’s claims. Picture: Daniel Pockett/NCA NewsWire

Large creditors and bond providers would take the biggest hit in the “low case” scenario, receiving just 3 cents in the dollar under the pooled DOCA versus nil under liquidation.

On the all-important iNSW litigation, KordaMentha said it was not appropriate to comment on the prospects of a court win, but the claim was being considered in a bona fide and responsible manner, noting Grocon had secured an agreement with a reputable litigation funder.

The administrators also said that while its investigations were not concluded, it held the opinion that Mr Grollo would likely be able to rely on the protections of Safe Harbour provisions with respect of any insolvent trading claims.

The group was founded as a concreting business by Mr Grollo’s grandfather Luigi in the 1940s.