Tower Trust under attack from angry bondholders
By Chris Hutching
Tower Trust is fending off investor queries with a class action brewing over two high-profile property-related bond investments where developers are restructuring rescue packages.
One is the Ballantyne bond issue secured over an $8 million residential subdivision at Katikati and the other is the $25 million Park Terrace apartments in Christchurch, where a number of buyers have been served with settlement proceedings.
The bond issues were made to fund the developments. Tower Trust is the trustee of the bond issues in both developments. Bondholders are increasingly looking to Tower for redress.
A group of Ballantyne bondholders recently held a meeting seeking support for a class action against Tower Trust, claiming it released funds before the required level of pre-sales had been achieved.
A rescue proposal with a three-year workout has been made to bondholders offering about $6 million of the $8 million in capital they are owed.
The situation of the Park Terrace apartments is more complicated because many sales were made to naïve investors who used GST refunds for their deposit in the belief the apartments would be onsold before settlement was required.
National MP Alec Neill, a lawyer representing several buyers, said about 18 investors, or the companies they had set up for the transaction, had been served with proceedings by the Park Terrace development company for failure to settle purchase contracts.
Those investors had prepared statements of defence.
Comments from our readers
No comments yet
Add your comment:
MARKET CLOSE: NZ shares rise led by F&P, Nuplex
NZ dollar heads for 2.4% weekly drop as Fed eyes rate hikes, questions loom over local economy
RBNZ to press ahead with plans to carve out property investment lending
NZ wool prices hold at elevated levels as volumes decline
CPA Australia takes defamation action against rival accounting body NZICA
Smartpay profit falls 9.5% as foray into Aussie cab market costs it major contract
SeaDragon sinks into the red as rising factory cost offsets surge in sales
Dorchester Property unitholders turn down a bid to dump manager
NZ business confidence slides to lowest level since September
Caniwi Capital snaps up another Wellington student apartment complex