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 as Genesis debut sparks energy rally; Meridian, MRP, Contact gain
Landmark Supreme Court decision protects 'outstanding landscapes'
NZ dollar heads for 0.8 percent fall in short week as RBNZ rate review looms
Air New Zealand says claims withdrawn as other airlines settle over cargo cartel, seeks costs
AMP Capital selling kiwi dollar in expectation of decline
BNZ's new CEO Healy expects benefit from expanding economy, targeted investment
Genesis Energy soars on debut, leading fellow energy companies higher
'Chipper' kiwis push up consumer confidence in April
Genesis shares stag 17 percent at listing, trade at $1.81
Dick Smith slows NZ sales decline after shifting some functions to Australia, outsourcing