The Globe Project Group, a property development company owned by Sydney developer James Vertzayias, has been placed in receivership, owing secured creditor St George Bank $43.5 million.
Globe was the developer of The Kilns, an apartment development on the site of an old brickworks in the Northern Beaches suburb of Brookvale.
Get business news first
Sign up to SmartCompany’s daily newsletter
According to a report in The Australian Financial Review, 51 of the 71 apartments in the project remain unsold.
Vertzayias is the sole director and shareholder of Globe and his company owns the 51 unsold flats.
St George has appointed accounting firm PKF as receiver and manager. PKF partner John Lord is working to ascertain the financial position of the group.
Lord said he had been orginally told that 14 of the 51 unsold apartments had been leased by Globe, but after going to the apartment block – and, he says ruefully, barging in on a few tennants – he found that 45 units were let.
Lord is now investigating where the rent money earned by Globe has gone. “We are currently investigating and figuring out what process we are able to commence to recover it.”
His next job is to decide how to sell the apartments. He has already had calls from developers interested in buying all 51 units and from tennants “who I barged in on” who are interseted in buying their individual property.
According to reports, one of Globe’s biggest assets is a $22 million claim against the former owners of The Kilns site, Austral Bricks. Globe claims that it was not informed of problems with contamination from asbestos and toxic chemicals before it bought the site.
Lord is investigating this claim.
Vertzayias is known as a big rugby league fan and several NRL players expressed interest in the project. Queensland rugby league legend Gordon Tallis owns a unit in the development.