Contractors and employees left out of pocket by the collapse of Pindan could face further payment delays, as Oxley Holdings revises its $7.5 million offer amid threats of legal action.
Contractors and employees left out of pocket by the collapse of Pindan could face further payment delays, with this week’s meeting expected to be adjourned as its Singaporean owner works to revise its $7.5 million offer and ward off legal action.
A fortnight ago, Oxley Holdings approached Pindan Group’s administrators with a proposed deed of company arrangement which included $7.5 million for employees and creditors before Christmas.
The deal comprised $4.5 million for employee entitlements, more than $1.5 million for creditors and $1 million for a release from the other subsidiaries already in liquidation, as well as the coverage of associated costs.
Though the deal would provide employees 100 cents in the dollar on all claims, including leave, redundancy and superannuation, other creditors would receive $1,500 per claim, with more funds available for large creditors to receive an additional payment.
The proposal was set to be presented during the second creditors meeting on Thursday, but administrators had recommended rejecting the DoCA in favour of the winding up of Pindan Contracting.
That would allow administrators to pursue Oxley for damages.
Now, Business News understands Oxley has gone back to the drawing board and will be providing administrators with an improved offer in the coming hours.
It is understood the meeting would proceed on Thursday before being adjourned to allow the consideration of the amended DoCA.
The second creditors meeting has already been adjourned several times, with extensions granted by the Supreme Court to allow further negotiations.
EY was appointed as administrators of three Pindan entities and liquidators of a further nine on May 18, after Business News revealed the company was facing financial trouble.
The multi-disciplinary construction group collapsed owing secured and unsecured creditors and employees more than $97 million, leaving the business's 80 active projects, 280 staff and hundreds of subcontractors and trade suppliers in limbo.
The proposal is expected to ward off possible legal action against Oxley over the letters of support it wrote last year in which it claimed it would support the group to remain solvent until October 2021.
Oxley’s financial advisor Ankura had warned it would actively defend any action in a lengthy court case.
The deed of arrangement followed Oxley’s commitment to pay a $17 million loan to its secured creditor Bankwest, taking the total of its commitment since its acquisition of Pindan in 2019 to more than $70 million.
Business News is a registered creditor of Pindan in relation to a small advertising contract.
