Nominated supervisor a designated survivor

Has the success or failure of a proposed deed of company arrangement (DoCA) ever relied so heavily on the preparedness of a key employee to return to the fold?

Probably, but there’s no doubting the DoCA recommended to creditors of Ausglobal Construction Pty Ltd by three appointees from Hall Chadwick had no chance of delivering the anticipated 5c in the dollar for ordinary unsecureds if the building firm’s former “nominated supervisor” didn’t agree to return once the DoCa was effectuated and the company could resume building, construction and defect rectification work after being placed into voluntary administration (VA) in July 2024.

In their S439A report distributed ahead of the second meeting on October 15, 2024 administrators Cameron Shaw, David Trim and Richard Albarran refer repeatedly to the nominated supervisor, firstly to advise that the unnamed nominee will be the first recipient of the DoCA funds via a tranche placed into the proposed creditor’s trust, presumably to entice the nominee to agree to be retained.

Thanks to a creditor and the Minutes of the second meeting we learn a little more.

As the meeting progressed it was revealed – by a creditor – that the Register of Building Contractors and Practitioners recorded the proposed nominated supervisor as being the current nominated supervisor of Ausglobal Finance Pty Ltd, the parent entity of Ausglobal Construction whose director and shareholder was the deed proponent. According to the Minutes this was news to meeting chairman Shaw.

This nominated supervisor would appear to be a first class opportunity devisor.

Ausglobal Finance meanwhile is also one of several related party creditors the administrators admitted for participation in the DoCA and is the owner of a substantial commercial property at 370 Victoria Road in the Perth suburb of Malaga, a development built by Ausglobal Construction.

Indeed around the time Ausglobal Construction and Ausglobal Finance director and shareholder Wei “Peter” Su was being referred to Hall Chadwick by Collab Capital, a business in which Su holds a 50 per cent stake, he was also trying to sell the Malaga property and simultaneously breaching – albeit unwittingly – the ASX-listing rules as to the acquiring and disposing of shares in Canyon Resources Limited, a company to which he was appointed a non-executive director.

That breach resulted in Su tendering his resignation from Canyon Resources earlier this year but the Malaga Hub Service Centre, which iNO’s mail indicates is unencumbered, remains on the market.

In marketing material distributed by agent Colliers, the property is said to generate a net income of $1.26 million per annum if fully leased. Expressions of interest were due by July 25, 2024. Unrelated creditors would no doubt love a piece of that.

Su is also the source of the funds for the creditors trust and in their Report the administrators forecast that a dividend would not be available before May 2025.

That dividend was of course dependant on Ausglobal Construction emerging from administration in a state that would allow it to retain the anonymous nominated supervisor, without whom the company could not complete works and get paid, thereby generating the funds for the creditors trust and trustees’ remuneration.

Email inquiries sent to Shaw, Trim and Albarran to determine if a dividend had been declared or was imminent were not responded to by deadline.

Further reading:

Unfamiliar software frustrates administrators’ efforts