NZX-listed Allied Farmers yesterday declared victory in a United States property dispute.
Rob Alloway, Allied managing director, said the company had won more than $6 million after a legal dispute with developer Mark Cooper of Pacific Northstar Property Group.
A Californian court had granted a receiver permission to make an interim distribution of more than $6 million, plus interest to Allied.
However, Alloway flagged more bad news from his business: It will write down the value of its investment in offshoot Allied Nationwide Finance in its June 30 accounts. He expects those accounts to be made public by August.
Cooper developed a luxury Beverley Hills project, Maison Reeves Condominiums on Reeves Drive. The project was financed partly by Hanover.
Cooper complained last year about Hanover, saying that when he flew from Mexico to Auckland for a meeting in February he believed it was to settle his long-running dispute with the lender.
Instead, he found himself at the Auckland Central Police Station defending allegations of blackmail and fraud.
Mark Hotchin, Hanover co-founder, said the claims were absolute nonsense. Cooper prepared a 3m-long wall chart illustrating his disputed dealings with Hanover since 2001.
The 23 condos he developed on four floors are Mediterranean-style, marketed as "expert craftsmanship, applied with the utmost attention to detail using fine wood, stone and exquisite designer finishes, delivering the height of tasteful decor to these newly constructed Beverly Hills homes".
One three-bedroom condo is being advertised for US$1.1 million.
Not all the units have been sold and the company went into receivership, leaving a question over the millions Hanover had loaned on the project.
When Allied bought Hanover's loan book, it chased the receiver for money from the project.
Alloway said yesterday only about six apartments were yet to be sold. When that happened, Allied was due part of those proceeds too, he said.
"The receiver currently also holds other funds of $3.5 million in trust, which is forecast to increase to between $11.5 million and $13.5 million as the remaining condominiums are sold. While there remain objectors to the distribution of the remaining funds, given the success in this judgment and the difficult position it creates for these objectors, the company is confident of further distributions in due course," Allied's statement said.
Alloway said he expected the first payment at the end of this week. Allied shares were steady at 5c.
Pacific Northstar Property Group's Chapter 11 bankruptcy was filed in the United States' Bankruptcy Court on July 28 last year.
A ruling from the High Court at Auckland over the matter last year noted that Pacific started the Maison Reeves project as a joint venture with Hanover Finance. But a dispute arose between the two, and Hanover filed proceedings in the Superior Court of California in April, 2008.