Reed Construction liquidator recovered just $6,500 to date from Gold Coast Titans property arm
The liquidator of collapsed building firm Reed Construction has recovered just $6,500 of the more the $1 million it claims it is owed it by the property arm of the Gold Coast Titans rugby league club.
The report prepared Reed Construction liquidator Mark Robinson shows that Reed Construction has lodged a claim for $1,046,000 for money owed on the construction on the Titans' Centre of Excellence at Robina.
Robinson says that under the deed of company arrangement, the Gold Coast Titans property arm is likely to return between 1.86 cents and 17.3 cents for every dollar owed.
The Centre of Excellence was sold to Sydney investor Phil Ward and Gold Coaster Robert Clark in August for an undisclosed sum. Both Clark, the uncle of Titans football manager Scott Clark and Ward were owed $4.8 million by the club through their company Handling Solutions Pty Ltd.
Reed Construction had sought a winding-up order against Gold Coast Titans (Property) Pty Ltd just months before Reed collapsed in July with debts of $182.1 million.
Gold Coast Titans (Property) Pty Ltd was placed in administration in April with creditors voting to return it to the control of management under a deed of company arrangement in mid-May.
It has debts of around $24 million with the Gold Coast Bulletin reporting in May that it had "cash in the bank" totalling $2,193 on May 16 and total assets of $485,000.
Reed is also seeking monies for its work done on 470 St Kilda Road, an apartment project called Leopold, designed by architect Fender Katsalidis.
Prior to Robinson’s appointment Reed had successfully won its claim against the developer of the project, but this is currently being appealed in the Victoria Supreme Court.
According to the report, Reed Construction founder Geoff Reed has submitted a proposal to the liquidators to provide $7.4 million to settle an intercompany loan and “all other claims” without any admission of liability in relation to claims that company traded whilst insolvent.
Reed has offered to provide a further $2.4 million for the payment of inter-company loans should Reed Construction be returned to the control of parent company RBG Pty Limited, which owes Reed Construction $114 million.
The proposal is backed by a personal guarantee from Geoff Reed.
In his report Robinson notes a “complex webs of related companies and intercompany loans”.
Nearly 1,500 unsecured creditors are owed $152.6 million – many of them sub-contractors. Robinson says he is currently unable to declare a likely dividend payment for these creditors.
St George Bank is a secured creditor and owed $48.1 million.
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Commercial property is a serious business.
Get the land supply, price, and infrastructure equation right and I suspect there would be no lack of demand from genuine aspiring home buyers.