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:
Power companies face ban on
Cavalier and NZ Wool Services to merge wool scouring businesses
Hellaby expects to complete at least one acquisition this year
Airwork sees annual profit growth of 48%, expects 1H to beat prospectus
Fletcher Building ups earnings through trebling house builds, trialling social housing
Fletcher aims to triple pace of home building in NZ as demand grows, Adamson says
NZ, South Korea free-trade agreement looks imminent
Fletcher Building sees FY earnings $650M-$690M on second-half rebound
ASX-listed Empired buys Intergen for A$17.4 mln in cash and shares
NZ net migration rises to annual record in September on increased numbers from India, Australia