Administrators fight for Google drive at heart of Steller’s failure
A Google Drive account containing highly confidential company and personal information may hold the key to what led to the collapse of property developer Steller last year, and the ending of the business partnership of co-founders Simon Pitard and Nick Smedley.
The once high-flying developer with a $4.2 billion pipeline of residential, mixed-use and commercial projects crash-landed just over a year ago when Mr Pitard and Mr Smedley abruptly dissolved their business partnerships, leaving projects such as the Continental Hotel in Victoria’s Sorrento half-finished and creditors owed hundreds of millions of dollars.
According to a June 1 creditors report filed with the Australian Securities and Investments Commission by SV Partners, the administrator of Steller Property Funds, Skye Pitard, the wife of Simon Pitard, made an application in March “exerting legal professional privilege over various documents and emails contained on the Steller Group’s Google Drive” that has 6.8 terabytes of data.
Following this application, SV Partners was ordered to “to search all records in our possession (including the Google Drive) using a specific set of criteria for documents and emails that may be subject to a claim of legal professional privilege and confidentiality by Ms Pitard”.
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Malcolm Howell from Jirsh Sutherland, the liquidator of Development Steller and Steller Projects, said in two separate reports to creditors filed with ASIC that he had not been able to gain access to the same Google Drive account.
“I note there is a Google Drive account which contained a significant volume of materials that relates to at least a large portion of the entities that make up the group,” he wrote.
“At the time of writing, an access to this Google drive had not been granted by Mr Smedley [the director of the company].”
Richard Stone, from RSM, the receiver of Steller Developments, said in a document filed with ASIC, that he had previously written to the director, Mr Smedley, “demanding access to the Group’s Google Drive”.
“To date, the director has refused to provide access to the Drive,” he said.
“We have since been advised that Pitard Services Group Pty Ltd (formerly known as Steller Services Pty Ltd) was the owner of the Drive.
“We have since written to Pitard Services Group formally requesting access to the Drive
“At this stage, Pitard Services Group have not provided access to the Drive or copies of the Company’s books and records from the Drive.”
In a statement to The Australian Financial Review, Mr Smedley said: “I have provided all the company documents and files as requested that are not co-mingled with other records and I continue to co-operate fully with all external administrators.
“There is a central drive that is the subject of court summons issued by Simon and Skye Pitard. The court has made orders that essentially prevents me from making any further provision of that central drive.”
The Pitards did not respond to a request for comment.
Mr Smedley is the son of the late Australian business leader Peter Smedley while Mr Pitard is the son-in-law of aged care entrepreneur and Financial Review Rich Lister Russell Knowles,
Private investors who put more than $50 million into Steller property funds face the prospect of heavy losses, according to creditor’s reports filed with ASIC and seen by the Financial Review.
In the case of Steller Projects, $154.4 million is owed to creditors – including $130.5 million to secured offshore lender OCP – but the likely return is just $273,000,
SV Partners, the administrators of Steller Property Funds, said it had hired computer security firm Forensic IT to search for documents in order to comply with the court order.
“We provided the Court, by way of affidavits dated 16 April 2020 and 21 April 2020, two Excel spreadsheet detailing various documents located that met the search criteria. As at the date of this report [June 1], this matter is ongoing.”
In its report, SV Partners noted that another insolvency firm, Pitcher Partners, had sought to gain access to the same Google Drive to obtain “copies of books and records of any entity over which they are appointed administrators or liquidators”.
However, SV Partners explained it had previously entered into a Deed of Undertaking (in October last year) with Mr Smedley “to the effect that we would keep all other information, documents, books and records et cetera located on the google drive which do not relate to our administrations, confidential and not to disclose same to other parties”.
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