The struggling property outfit Valad Property (aka Invalid) seems to think Disclosure is a 1994 movie starring Michael Douglas.
Valad, headed by Peter Hurley, has failed to inform its shareholders about a spat and now legal fight it finds itself in with its joint owner in the Noosa Sheraton, headed by Craig Anderson of Ashington Capital.
Obviously, Valad shareholders have nothing to worry about with Ashington filing a petition to the court on June 1 to have the joint venture wound up. A project that now makes up a large chunk of Valad's dwindling pool of developments.
The dispute partly stemmed from a $2.5 million equity injection into the Sheraton being required by Valad and Ashington under the terms of a unit-holders' agreement.
And Valad signalling its desire to exit the development, despite still wanting to charge Ashington an "introduction fee". The site was originally purchased by Valad for $93.6 million in 2007, which was partly funded by a loan from Suncorp.
In his judgment on Tuesday, where he threw out an application by Valad to have the winding-up order dismissed, a NSW Supreme Court judge, Richard White, noted how Valad had offered to sell Ashington its half stake in the Sheraton for $20 million on May 27. Or buy Ashington's stake for the same amount.
"If ACPL [Ashington] is required to sell its interest to VCML for $20 million, it will still be required by clause 22.8 [of the contract] to pay VFML [Valad] the introduction fee of $20 million," Justice White said.
Valad in April, to no avail, put an "alternative business case" to charge Ashington a lower fee.
EARNING A CRUST
The former MFS chief financial officer, David Anderson, has played down any notion he was well paid when his firm Business Puzzle Solutions Pty Ltd helped the former liquidators and administrators sift through the Gold Coast corporate wreck, Deloitte.
Asked by Adam Bell SC, for the current liquidators Bentleys Corporate Recovery, what Business Puzzle Solutions was, Anderson explained to yesterday's public examination into the MFS collapse: "As your clients are well aware, it provided services to them and to their predecessors Deloittes."
Asked if he had received any income from it in the past three years he said: "It may have paid some costs on my behalf, I haven't received a salary." Business Puzzle, which is solely owned by Anderson, was paid more than $900,000 in consulting fees in less than a year when Deloitte was overseeing things.
RUB OF THE GREEN
The former AGL boss and now Everest Financial Group chairman and Santos director, Greg Martin, has not allowed the collapse of Jackgreen Ltd to hinder his good work in the renewable energy market. Nor stop him providing advice to other green energy companies.
The administrators of the Martin-chaired Jackgreen, PKF partners John Lord and Atle Crowe-Maxwell, have lobbed several resolutions for creditors to vote on next week, which include three proposed deeds of company arrangement (DOCAs) to recapitalise the shell of the debt-laden energy retailer.
With creditors also being given the option to wind-up the company, the administrators have recommended they vote for a proposal put by the "greentech energy business" Greenbox, which plans a backdoor listing.
It has emerged Jackgreen had already been in "conceptual discussions" with Greenbox over a potential merger before its demise.
The Jackgreen executive chairman has even acknowledged in a report to creditors that he provided, "from time to time", advice to the directors of Greenbox. But in a recent letter provided to the administrator, Martin stressed he was "not involved in any capacity" with Greenbox's proposed DOCA.
"My only involvement with Greenbox has been as an adviser to the directors and senior management of Greenbox with respect to the operation of energy wholesale and retail markets," Martin said.
REBIRTH HOPES
Greenbox might have a tougher time raising the $20 million it wants from would-be investors if it manages to backdoor list into the old Jackgreen shell.
Its submission to the administrators said: "[Greenbox] plans to continue the gradual enhancement and transformation of the Jackgreen business by providing a unique energy efficiency and energy management service combined with energy retail". Its proposal will give creditors holding $8.2 million of Jackgreen convertible notes the option to take shares or become unsecured creditors.
Greenbox also proposes to offer another noteholder, Babcock & Brown Prime Securities, an additional $350,000 in order to become an unsecured creditor. Under the best-case scenario, Jackgreen creditors will get 8.26? in the dollar from the Greenbox proposal.
Greenbox, however, is yet to convince two former Jackgreen directors, as part of its proposal, to withdraw their $400,000-odd of claims against the company. John Huggart has claimed a $68,125 retrenchment despite never actually getting around to start his job as managing director, the administrators say.
His predecessor Andrew Randall has claimed $397,640.
Before the Greenbox proposal came along, Jackgreen's administrators had recommended a deed of company arrangement put forward by the Sydney insolvency practitioner Steve Nicols.
Nicols yesterday said there was no way he could compete with the $700,000 Greenbox is offering just for the shell of Jackgreen. "I'd like to sell them one of my other shells for $699,000," he told CBD.
Nicols, who who is advising on a similar plan to rebirth the former Rob Borbidge-chaired Asset Loans, has proposed to backdoor list an African or Chinese resource company into Jackgreen.
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Frequently Asked Questions about this Article…
What is the dispute between Valad Property and Ashington Capital over the Noosa Sheraton joint venture?
The dispute centres on the Noosa Sheraton joint venture where Valad and Ashington (ACPL) disagreed over a required $2.5 million equity injection and Valad's desire to exit the development while still seeking an "introduction fee." Ashington filed a petition on June 1 to have the joint venture wound up, and Valad later offered on May 27 to buy or sell the half stake for $20 million.
Why were Valad shareholders described as being "left in the dark"?
The article says Valad failed to inform shareholders about the spat and ensuing legal action with its joint-owner Ashington over the Noosa Sheraton. Everyday investors rely on timely disclosure of material disputes; in this case shareholders were reportedly not kept informed about a matter that affects a major project in Valad's development pool.
What is an "introduction fee" and how does it matter in the Valad–Ashington case?
An introduction fee is a contractual payment one party may owe another when interest in an asset is transferred. In this case clause 22.8 of the joint-venture contract would require ACPL (Ashington) to pay Valad (VFML) a $20 million introduction fee if ACPL were required to sell its interest to VCML for $20 million — meaning a sale at that price could still trigger a $20 million payment to Valad.
What is a winding‑up petition and what does Ashington’s petition mean for investors in Valad?
A winding‑up petition seeks a court order to wind up (dissolve) an entity or joint venture. Ashington’s petition to wind up the Noosa Sheraton joint venture could lead to sale or liquidation of the project. For investors that matters because the Sheraton represents a large chunk of Valad’s shrinking development pipeline, so the petition can materially affect Valad’s assets and potential recoveries.
How did the NSW Supreme Court respond to Valad’s attempt to dismiss the winding‑up order?
NSW Supreme Court Justice Richard White threw out Valad’s application to have the winding‑up order dismissed. In his judgment he noted Valad’s May 27 offer to sell or buy a half stake in the Sheraton for $20 million and explained how the introduction‑fee clause would operate if ACPL were required to sell for that amount.
How important is the Noosa Sheraton project to Valad’s overall development portfolio?
The article states the Noosa Sheraton project makes up a large portion of Valad’s dwindling pool of developments. That suggests the outcome of the dispute and any court orders could be significant for Valad’s asset base and therefore important for shareholders and creditors to monitor.
What financial background about the Sheraton site should investors know?
The site was originally purchased by Valad in 2007 for $93.6 million, and that purchase was partly funded by a loan from Suncorp. This historical cost and the presence of financing help explain why the joint venture dispute and related cash calls have material implications for the parties involved.
What practical steps should everyday investors take when a company is involved in a joint‑venture legal dispute like Valad’s?
Look for company disclosures and court filings, monitor material developments (equity injections, winding‑up petitions, court judgments), evaluate how key projects contribute to the company’s portfolio, and consider how contractual clauses (like introduction fees) could affect proceeds from any sale. If disclosure is lacking, investors may want to seek clearer information from the company or reassess the investment’s risk.
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