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 mixed as Chorus rebounds, Hallenstein drops
NZ dollar heads for 1.2 percent weekly gain vs. Aussie as interest rates diverge
Infratil seeks up to $100 mln in new five-year infrastructure bond
Wool Equities, Primary Wool Coop in tie-up talks as they eye Fonterra success
NZ consumer confidence near four-year high ahead of Christmas retailing
Chorus shares rally after vote of confidence from Milford, ACC ups stake
Green lobby cries foul on draft EEZ oil exploration rules
NZ manufacturing activity grows in November, BNZ-BusinessNZ PMI shows
NZ dollar hits new five-year high vs. Aussie after RBA talks down currency, RBNZ to hike
While you were sleeping Strong US retail sales