This article is from the Australian Property Journal archive
THE corporate regulator is looking to wind up a land-banking scheme linked to property spruiker Henry Kaye, Jamie McIntyre and 21st Century after administrators were unable to locate $22.3 million from one of the companies.
ASIC yesterday applied in the Federal Court to set aside a resolution made by creditors of Midland Hwy to enter into a deed of company arrangement (DOCA) and for Midland Hwy to be wound up.
The DOCA was proposed by Bilkurra Investments Pty Ltd (Bilkurra) and agreed to by creditors on 21 October 2015. Under the deed, Bilkurra, who owns the land associated with the Hermitage Bendigo project, was to take over the development.
ASIC has concerns about the proposed DOCA in light of various matters reported on by the administrators Nicholas Martin and Craig Crosbie of PPB Advisory.
ASIC’s concerns include:
– Only $1.7 million of the $24 million received from option holders in the Hermitage Bendigo project had been put towards the development;
– Midland Hwy does not have funds to pay the $24 million back to option holders and is likely to have been insolvent from March 2012 and potentially as early as 7 September 2011;
– Up to $22.3 million of payments are likely to be subject to other claims which should be investigated by liquidators to see if they can be recovered, including substantial amounts paid to companies associated with Bilkurra for which there is no proper documentation; and
– It is unclear whether Bilkurra has the financial resources to undertake the development.
Midland Hwy was the developer of a land-banking scheme known as Hermitage Bendigo, formerly Acacia Banks, located just outside of Bendigo. It was placed into administration on 2 July 2015.
At the second creditors’ meeting on 21 October 2015, creditors voted in favour of the DOCA despite the administrators recommending the company be put into liquidation.
Last month the Federal Court appointed Deloitte as provisional liquidators to land banking companies linked to property spruiker Henry Kaye, Jamie McIntyre and 21st Century.
In addition, injunctions were made preventing all of the respondents, including Jamie McIntyre and Dennis McIntyre from promoting the five schemes ASIC is concerned about. They are: Botanica, Secret Valley Estate, Oak Valley Lakes Estate & Resort, Bendigo Vineyard Estate & Resort and Melbourne Grove Estate.
It is conservatively estimated that mums and dads investors have injected at least $100 million into the schemes, although it is feared that investors are owed as much as $300 million.
Australian Property Journal
