Thursday 22 August 2013

Obeid's Streetscape DoCA terminated

Streetscape Projects director
Moses Obeid. Photo: Optus Zoo
THE deed of company arrangement (DoCA) governing Moses Obeid’s Streetscape Projects is toast after a court yesterday ordered the controversial DoCA be dissolved.

In the NSW Supreme Court, Justice Ashley Black terminated the deed and, under the relevant sections of the Corporations Act, ordered that the termination give the same effect as if a special resolution to wind the company up had been passed.

As a consequence deed administrators Ozem Kassem and Robert Kyte of Cor Cordis are out and Deloitte’s senior insolvency operator David Lombe is in. 

Appointing Lombe as  liquidator is a victory for City of Sydney Council, which brought the application as Streetscape's major unsecured creditor. 

"Today’s development is a win for the City," the Council said in a statement.

"A thorough public examination of the company’s assets and recent transactions can now take place and the City of Sydney will seek any assets to satisfy its judgement debt in this case."

The Council said Obeid's DoCA "was neither fair nor reasonable and favoured creditors owed small amounts of money by Moses Obeid and his company Streetscape.

"The deed resulted in the company paying only a few cents in the dollar to creditors who were owed relatively small amounts. 

"Some of those creditors had an association with Mr Obeid and the arrangement allowed the company to wipe out its debts".

Almost a year has passed since the DoCA was executed on August 28, following a meeting of Streetscape Project’s creditors on August 9, 2012. 

At the meeting, the Council, which has a claim against Obeid and Streetscape of at least $12 million, proposed the company be wound up.

Obeid, who is Streetscape's sole director, proposed a DoCA offering a maximum 3c in the dollar. Voting was deadlocked between the Council, which held a majority by dollar value and those creditors in support of the deed, many associates and relatives of Obeid, who held the majority by number.

Kassem, as voluntary administrator of Streetscape and chairman of the meeting, used his casting vote to push the DoCA through. Not long afterwards, the Council challenged the outcome.

In February 2012 the Supreme Court ordered Streetscape and Moses Obeid, as its sole director, to pay the City $12 million in damages plus costs for the unauthorised use of its Smartpoles.
Ozem Kassem is out as deed administrator
of Moses Obeid's Streetscape Projects.
Photo: Cor Cordis.

The orders yesterday were made by consent, which was unexpected given the matter had been scheduled to run three days as a contested hearing. More details will be available once Justice Black’s reasons are published.

Streetscape’s solicitor Daren Anderson of ERA Legal declined to comment on why his client decided against a hearing.

In response to SiN’s enquiries, Kassem said the ex-administrators “took no active part in the proceedings”.

However, Kassem added: “Justice Black specifically noted in his judgement that there were no findings of fact in making the order, or any adverse finding about the conduct of any party, including the administrators”.

See also:

Lombe to oust Ozem if Obeid DoCA voided

Mother who fled hospital aided Obeid in Streetscape stoush
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1 comment:

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