Ralan Arncliffe liquidated but Ruby, Surfers Paradise lives on

Ralan Arncliffe liquidated but Ruby, Surfers Paradise lives on
Ralan Arncliffe liquidated but Ruby, Surfers Paradise lives on

The creditors of collapsed apartment developer Ralan Group have voted to put its Arncliffe project into liquidation.

But off the plan buyers in its Ruby, Gold Coast towers have accepted a controversial plan that could see the company founder William O’Dwyer back in action. 

Under the proposal, Mr O’Dwyer and a yet-to-be-disclosed developer, will take control of the Ralan companies involved with the Gold Coast apartment projects. 

Ralan’s voluntary administrator, Grant Thornton’s Said ­Jahani advised against adopting the proposed revival.

At yesterday's final creditors’ meeting for The Ralan Group, Grant Thornton announced the results of the poll to either liquidate or accept the Deed of Company Agreement (DOCA) proposed by the director, Mr William O’Dwyer.

Class action lawyer Matthew Bransgrove twas reported by The Australian as noting O’Dwyer had been allowed to put forward a DOCA that was “vague in the ­extreme” and required the creditors to trust him yet again.

The majority of creditors voted in favour of the DOCA for the Gold Coast companies. The Ruby Collection in Surfers Paradise was proposed as 1600 apartments across four towers, along with the the nearby 670-unit Sapphire development.

These companies now have 15 days to sign the Deed of Company Arrangement giving effect to the outcome of the vote.  

“As the creditors of the DOCA Entities (ie Gold Coast projects) have voted in favour of the DOCA, the onus will now be on the director, Mr O’Dwyer who proposed the DOCA to reveal the identity of the mystery developer, the location of future development sites and details of the discount mechanics for creditors to consider whether they wish to enter into new sale contracts,” Said Jahani, National Managing Partner Financial Advisory, stated.

It was a close vote.

For the 7 DOCA entities (relating to the Gold Coast projects), there were a majority in both value and number for DOCA and against liquidation for six of the entities.

However, for one of the DOCA entities, Ralan Paradise No 2 Pty Limited there was a split vote meaning the chairman (Said Jahani) had a casting vote. 

For this entity: 112 creditors owed $60,307 voted for the DOCA but 103 (ie less) creditors owed $87,720 (ie more) voted against the DOCA. 

This vote was swayed by a single creditor with a claim of $63,000 who voted against the DOCA. 

Whilst Said Jahani recommended against the DOCA’s in the report to creditors, the Chairman’s casting vote was used to pass the resolution for the DOCA for this entity because:

1.      On a stand-alone basis there will not be any recoveries available to creditors in a liquidation for this entity.

2.      The total value of creditors in this entity are c. $382K and this equates to the value of unreleased deposits by purchasers in this entity. We currently hold in a trust account, cash of a similar value relating to the quantum of unreleased deposits from purchasers. Once these funds are returned (after allowing for costs), there will be a very small amount of creditor claims left in a liquidation. These funds will be returned regardless of whether this entity enters a DOCA or into liquidation.

3.      In casting a vote for the DOCA, the creditors who voted against the DOCA are not precluded from bringing a claim against Mr William O’Dwyer.

Jahani was conscious that the majority of creditors in the combined DOCA entities voted for the proposal - $93m (703 votes) versus $60m (570 votes).

“The Gold Coast entities all needed to vote in favour of the DOCA for it to proceed.

"Regardless of the case we made for liquidation it is the clear wish of the majority of creditors in these entities to proceed with the proposed DOCA.

"To allow this to happen, and in the knowledge that the creditors of the entity with the split vote will be no worse off, I cast my vote in favour of the DOCA for this single entity with the split vote,” Said Jahani, National Managing Partner Financial Advisory, stated.

The arrangement provides for a creditor who is owed $50,000 to purchase an apartment valued at $500,000 for $450,000.

Mr Jahani said the Australian Securities & Investments Commission had been presented with Grant Thornton’s full report to assess any steps “in terms of disciplinary action or charges related to the sole director, William O’Dwyer”.

The majority of creditors voted in favour of liquidation for the Arncliffe company (Ralan Arncliffe Pty Limited). This company is now in liquidation, but is being built to completion.

The Ralan Group went into administration in July with debts of $500 million and five unfinished projects, with its mostly Australian-Chinese off the plan investors having signed contracts that released their deposits to the company in return for 15 per cent annual interest during construction.

It emerged the company had been trading insolvent since 2014.

 

 

 

 

Tags: 
Residential Apartments The Ralan Group

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