Former rich list builder facing bankruptcy battle

A former BRW Young Rich Lister, who was reportedly worth $35 million seven years ago, is facing possible bankruptcy, after a brotherly love turned sour.

A FORMER BRW Young Rich Lister is facing possible bankruptcy, after a brotherly love turned sour.

Former Vantage Property Group director Jay McAlister, who in 2012 was reportedly worth about $35 million, is facing the prospect of bankruptcy after a business dispute with his brother, Brett McAlister.

A Federal Court bankruptcy application has been made last week by Brett McAlister and BAM Property Group Pty Ltd, with legal representative Sarah Davies Legal, against Jay McAlister, with the matter to be heard by the registrar on November 20.

The application followed a Federal Court ruling by Judge Derrington in early-August that Jay McAlister and his company Imoda Realty Pty Ltd had to buy $710,996 worth of shares held by his brother and his brother's company in Imoda Group Holdings Pty Ltd and Yaroomba Holdings Pty Ltd.

Judge Derrington also ordered Jay McAlister to pay his brother almost $74,000 in interest, and the Daily understood a costs order of about $75,000 had also been made against Jay McAlister.

The legal stoush started in September, 2017, according to the published Federal Court judgment.

BATTLES: Jay McAlister of Yaroomba, is in a legal stoush with his brother which could leave him bankrupt.

It was heard that Jay, Brett and a third brother, Chad, had set up companies with an informal agreement to work together as property developers, selling off subdivisions and also growing a letting pool of homes they built and then rented out, across the Sunshine Coast.

According to the judgment, payment agreements were made but never formalised on paper, and cracks in the business began to open up over payments Jay had made to himself.

He claimed the initial agreement had acknowledged his capital contribution had been greater than Brett's and he'd been entitled to a further $200,000 payment.

Chad, a policeman at the time, was in the business as a silent partner.

In December, 2015, Judge Derrington wrote that Jay had appointed a new general manager, Christopher Lewis, and then effectively removed Brett from the family business.

From late-2016 the judgment stated Jay began paying himself and associated entities "hundreds of thousands of dollars", before setting up a competing company and shifting staff over to it.

The brothers squared off during cross-examination, as Jay represented himself.

Judge Derrington described Jay's actions as "indefensible".

The judgment read that the brothers' relationship broke down irretrievably when the family business shifted from Coolum to Mooloolaba in March-April, 2016.

The business had initially enjoyed success, and sales from business operations rose from $3.19 million at June 30, 2015 to $7.75 million by June 30, 2016.

Sales increased further still, up to $11.73 million by June 30, 2017.

Originally published as Former rich list builder facing bankruptcy battle