After the signing of the DOCA in 15 days, Ralan’s Gold Coast buyers would deduct the deposits owed from the future purchase prices of new units.
The rest of the group’s 50 companies – mostly inactive – were also in liquidation.
“Through our investigation it has become abundantly clear that Ralan has been unable to pay its creditors for some time,” administrator Grant Thornton Financial Advisory national managing partner Said Jahani said.
“By liquidating the majority of companies in the group, we can attempt to recoup as much as possible for creditors based on the potential actions available to a liquidator.
“The onus will now be on the director, Mr O’Dwyer who proposed the DOCA to reveal the identity of the mystery developer, the location of future development sites and details of the discount mechanics for creditors to consider whether they wish to enter into new sale contracts.”
But the DOCA deal for Gold Coast buyers could still fall over if any of the creditors chose to sue Mr O’Dwyer over his personal guarantee to pay back their deposits through the new apartment schemes, Mr Jahani said.
The deposits were “lent” to the company, earning up to 20 per cent in interest.
In the lead-up to the vote last Tuesday, Mr O’Dwyer embarked on a series of meetings around Sydney encouraging buyers to consider his DOCA over a liquidation.
“Too many creditors did not understand the DOCA process and even the voting procedure,” he said.