Crown Group has entered into provisional liquidation, and its co-founders, Iwan Sunito and Paul Sathio, have agreed to put aside a long-running dispute in an attempt to salvage what was once a big real estate developer.
Andrew Sallway, business restructuring partner at BDO, was appointed as the company’s provisional liquidator on Thursday. He will have powers over its assets, which include projects in Sydney and Brisbane worth more than $1 billion, which can be used to pay off loans and unpaid bills.
Paul Sathio and Iwan Sunito have agreed to appoint a provision liquidator to control Crown Group.
“Large monies have been held up as a result,” Mr Sathio’s lawyers told the court. “The appointment will ensure bona fide contractors will have their debt paid.”
Mr Sallway will also gain power over Crown’s trust money and property portfolio, which includes completed property assets in the Sydney CBD, North Sydney, Waterloo, Eastlakes, Green Square, and Parramatta in addition to those unfinished sites.
The provisional liquidator’s powers will apply to Crown and its subsidiaries. With the appointment of Mr Sallway, Crown will be able to process the payments to contractors that had been delayed since the start of this year.
Mr Sathio’s PNR International filed the winding-up court action for Crown last week. On Monday, Mr Sathio said he initiated the court action “to break the deadlock in the company’s operations”.
“It’s no longer a workable relationship, hence the need for an external and independent person to take control of the company’s affairs,” he said.
As Crown required approvals from Mr Sathio and Mr Sunito to proceed with activity such as sales, repaying loans and paying bills, the co-founders’ disagreement led to the company’s business activity being paused. This prevented Crown from making sales, as well as repaying loans and bills.
Mr Sathio and Mr Sunito commenced negotiations to wind up Crown on Wednesday. Before that, negotiations between the pair had reached a standstill. The business partners had previously attempted on several occasions to reach an out-of-court resolution, but were unable to agree on how to approach the conflict.
Mr Sathio’s lawyers requested a separate hearing to deal with a draft agreement signed last year to split the company, which did not proceed. The request was granted by Justice Michael Ball on Thursday afternoon.
As previously reported by The Australian Financial Review, Mr Sathio and Mr Sunito agreed to split Crown’s property portfolio in September. But the agreement did not proceed, leading Mr Sathio to sue Mr Sunito.
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