JOHN Howard endured it, Richard Court suffered it, and now Geoff Gallop has become another political leader with a brother linked to a company in financial difficulty.Dr Gallop’s brother, Laurence, is one of the directors of the failed Geraldton Building Co Pty Ltd – a company registered for 50 years – which was put into liquidation a few weeks ago owing creditors more than $3 million.The company was the mainstay of a 106-year old Mid West business that had played a big role in the development of the North West and was closely linked to Dr Gallop’s family.His father, Douglas, was once GBC’s company secretary. Australian Securities and Investments Commission records show Laurence Gallop joined the board in 1993 and remains a director. Mr Gallop also became company secretary last year.A major business in the region, the collapse has left a host of smaller companies out of pocket, not to mention the Australian Taxation Office, which was listed as being owed more than $900,000.The bulk of creditors were unsecured and have been told to expect a repayment of about 20 cents in the dollar at the most.Roofing contractor Steve Marinich, who claimed he was owed more than $200,000, said there had been signs of cashflow problems for six months before the administrators were called in.He was a member of the creditors’ committee set up by the administrators.“I’d been working for GBC for 12 years all around the State,” Mr Marinich said.He said he had basically written off what remained of GBC’s debt to him and was critical of aspects of the company’s collapse, particularly recent efforts by some directors to buy assets after the business failed.A deed of company arrangement executed in April failed to generate a bigger dividend for creditors, possibly as much as 75 cents in the dollar, which was hoped for at the time.ASIC records show that GBC director Geoff Crother had attempted to arrange finance to buy some of the company’s assets.Joint liquidators Garry Trevor and Martin Jones of Ferrier Hodgson could not be reached for comment but minutes of the last reported meeting of creditors show Mr Trevor felt there was potential recourse to pursue directors of the company.“In terms of going forward, there is going to be claims against all the directors and it is not only Mr Crothers and Mr Gallop,” Mr Trevor told the August 10 meeting.It is difficult to know what all this means for Dr Gallop, who was unaware of the collapse of GBC and had not been approached by any creditors, according to a spokesman for the Premier.Former WA Premier Richard Court had to deal with fallout from his brother Ken’s involvement with failed finance broker MFA Finance.The Court Government was plagued by the finance brokers scandal for months leading up to February’s State election, which Dr Gallop won.And John Howard had many awkward moments after his government helped guarantee employee entitlements at National Textiles, a collpased east coast firm of which his brother was chairman.More than 300 National Textiles workers were owed $11 million before the Government stepped in.However, Dr Gallop’s spokesman said the Premier was not anticipating any political fallout from the collapse of GBC, an entity in which he had no beneficial interest.Laurence Gallop said the collapse had nothing to with his brother.p See Editorial, page 8
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