KEY POINTS:
Disgruntled investors in a large Albany shopping centre are still battling a group of directors who sold the property, more than four years after the $53 million deal was concluded.
Minority shareholders in Albany Power Centre opposed the sale of its asset - Albany Mega Centre - to
a former NZX-listed fund, Urbus Properties, in 2002 and went to the High Court that year seeking to bring proceedings against the firm's directors.
Most of the shareholders approved the sale, which went ahead, resulting in the company which owned the property being put into liquidation.
But the disgruntled shareholders claimed the directors had not acted in their best interests in the sale of the centre near North Harbour Stadium.
Tenants of the complex include The Warehouse, PlaceMakers, Noel Leemings, Whitcoulls, Hill & Stewart, Rebel Sport, Briscoes and others.
Michael Stiassny of Ferrier Hodgson has been asked to provide an independent opinion for shareholders and has encouraged the directors to reach a settlement.
Shareholders now face a postal ballot, due to be completed on March 16. They will decide on whether to have the liquidators of Albany Power Centre take action against the four directors and whether Stiassny should oversee proceedings.
The shareholders claim the directors sold the Albany property below market rates, had not acted in good faith and not exercised reasonable care when performing their duties.
Shareholders have been to the High Court twice seeking to bring proceedings against directors Warwick Hawes, Malcolm Smith, Shayne Hodge and Glenn Thrasher.
The court dismissed the first application, which also sought to stop the liquidation of Albany Power Centre, but in a later judgment asked the liquidators to consider the case for suing the directors.
The disgruntled investors included the late Dennis Hedley, whose mother Ngarie Hedley has since stepped into his place, Whangarei accountant Brian Moyle and others. About 900 shareholders bought into the fund and are yet to be paid about $5 million of the $53 million sale.
The group want the liquidators to take action against the directors.
Ian Shephard and Chris Dunphy, liquidators of Albany Power Centre, told shareholders they had also reached the conclusion the directors "had probably breached their duties". But they were not prepared to take any action.
The liquidators said that after the two court cases they sought an opinion from Miriam Dean QC about the likelihood of the shareholders succeeding in an action against the directors. She also found the directors had probably breached their duties, resulting in shareholders losing about $4 million.
But the directors have defended themselves vigorously.
They wrote to shareholders this year saying after four long and expensive years, the liquidation process was far from being completed. Some shareholders had made "unproven allegations" against them yet they had fully co-operated with the liquidators.
"We are deeply concerned about what we perceive as a lack of natural justice," the four directors wrote.
"In our view, the four-year time delay is an indicator of the weakness of the allegations and the uncertain result of any action that may be taken against directors."
"Whilst any action taken against the directors would allow us to respond to the allegations and clear our names and reputations, we are also conscious of the extra costs, further delays and uncertainty regarding the outcome."
CB Richard Ellis had made an independent appraisal of the Albany's property's value, they said. An independent appraisal report was also prepared by Grant Samuel and a market report was given by Bayleys on the likely sale price and costs involved in the deal.
Story So Far
1996: Waltus earmarked an Albany site for a large bulk retail centre.
1997: It offered 4357 investment parcels of $5000 each to the public.
2002: Urbus Properties bought the property for $53 million. Disgruntled shareholders first took the case to the High Court.
2005: ING Property Trust took over Urbus Properties.
Now: Investors will soon vote on whether to sue the directors.