By Chris Hutching
Friday 30th June 2000
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Sources estimated more than $700,000 has already been spent on fees associated with the trustee's failed attempts to put together a rescue package. And the receivership sale of the properties is likely to depress prices.
About 600 bondholders had agreed to a refinancing deal that would have given them back most of their $8 million capital while forgoing $4 million in interest.
But the deal foundered because caveats on some titles prevented their transfer to a new developer. Just why the financiers, developers and trustee failed to solve the long-standing problem with the caveats is unclear and each now blames the other.
Tower Trust's Glenn Clark, as trustee of the scheme, has written to bondholders this week advising that Grant Graham and Brendon Gibson of Auckland firm Ferrier Hodgson have been appointed receivers. The companies in receivership include bond issuer Ballantyne Properties, the owner of residential sections Heritage Development 1988, and the Ballantyne Golf and Retirement Resort, which owns the adjacent golf course and clubhouse at the resort.
Messrs Graham and Gibson are familiar with the situation. They were brought in as managers last year by the original developer John Bourke when things turned sour. Now they will carry out a review of the development and write a report outlining their recommendations to Tower Trust, which will pass on the information to investors.
The Ballantyne bonds are supported by first-mortgage securities over the resort and fell due for repayment on 30 September 1999.
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