Administrators repel ATO attempt to wind up

A deed fund of $500,000, a return of 16 cents in the dollar for unrelated unsecureds and the securing of the fund through a mortgage over one of the deed proponent’s properties has proved sufficient for a court to agree to adjourn a winding up application brought by the ATO.

The decision, contained in Deputy Commissioner of Taxation v Grand Platinum Pty Ltd [2024] FCA 568 meant a second meeting could be held for creditors of Grand Platinum Pty Ltd to consider the DoCA proposal.

The meeting took place last Monday and iNO understands that creditors voted in favour.

Adding frisson to this matter is the involvement of the New South Wales Crime Commission (NSWCC), which in 2021 obtained orders in the NSW Supreme Court freezing the assets of the company, which operated a project management and property development business that ceased trading the same year.

Grand Platinum’s primary assets comprise $4 million worth of apartments in a complex in Heathcote in Sydney’s south.

The ATO, which is owed approximately $1.3 million, opposed the adjournment. At the first meeting of creditors on May 1 ATO representative Charles Tannous told administrator and meeting chairman Liam Bailey of O’Brien Palmer that Grand Platinum was a trustee of the Platinum Family Trust.

Further the company had never completed a tax lodgement and several years of returns were outstanding. The meeting minutes record Bailey thanking Tannous for alerting him to the existence of the trust and the company’s role.

For the court however the fact that the money for the DoCA proposal was being put up by Dennis Pallos in his capacity as trustee of the Oceanus Investment Trust, that the contributions would be secured by a mortgage over a property in Craigieburn, Victoria owned by Ms Ashurina Pulis and that related party creditors would be prohibited from participating was enough.

Maybe further comfort was provided for the judge by knowing that at least half of a $100,000 indemnity for fees and expenses had already been deposited into the O’Brien Palmer trust account prior to the commencement of the VA?

Either way this is one where Bailey has gotten the win and the ATO will have to cop a significant haircut, again.