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The liquidator for troubled property business Blue Chip has told a meeting in Tauranga it is one of the worst company collapses he has handled.
Nineteen property management companies associated with the company have gone into liquidation.
Reports indicate that as much as $58 million
Liquidator Jeff Meltzer last night spoke at the Tauranga RSA in his first public appearance since he began investigating the troubled Blue Chip associated companies on February 8.
He told more than 200 worried investors - mainly retired couples - there was no pool of money sitting in any of the 20 companies that had gone into liquidation and, based on their financial records, they owed $50 million.
"The figure could climb - and this doesn't help you minimise your losses in the short term," Mr Meltzer said.
"I know many of you are struggling to pay your loans - the apartment rents and valuations are not sufficient to cover your payments, or your deposits have gone into the black hole of Blue Chip companies and you are not getting any income," Mr Meltzer said.
"I'm afraid the reality is there's no quick fix. The investigation will take months, and if we believe there's reason to pursue people and entities - including directors, valuers, legal and financial advisers - to recover your money then we will do so," he said.
Mr Meltzer told the investors it was important to obtain independent financial advice - even asking the lenders for a three-month holiday in mortgage payments while "you work out ways to meet your obligations and fund the (investment) shortfall".
Mr Meltzer indicated that at best the investors, more than 2000 of them around the country, may recover 50c in the dollar after the web of Blue Chip companies was unravelled.
The parent company, Blue Chip Financial Solutions based in Sydney, is not in liquidation but has been suspended indefinitely from the Australian stock exchange.
Mr Meltzer said he was relying on a $25m pledge from Blue Chip founder Mark Bryers as a way of recovering a significant amount of investors' money, but that was still 18 months away.
Mr Bryers has told Mr Meltzer that his latest property development, due for completion by the middle of next year, should produce a profit of $25m and he would hand that over.
"That's well and good if it comes to fruition - his credibility is yet again on the line - but it doesn't solve the investors' immediate problem of funding the interest costs on their loans," Mr Meltzer said.
The meeting was organised by the group Exposing Unacceptable Financial Advice (EURA).
Spokeswoman Suzanne Edmonds said the mood was sombre, but there was a lot of anger and a huge amount of anxiety from investors.
She said the liquidator Jeff Meltzer told the group that situation was not pretty and he appeared to be moved by the number of people who turned up to the meeting.
"A lot of people have paid deposits and have got nothing for them. Rents that were due haven't come in. The stories are quite horrific."
Ms Edmonds said she was particularly concerned about the number of elderly people caught up in the collapse.
She said it was heart wrenching that people in their retirement years could be thrown out of their homes.
She believes the banks and other lenders have a responsibility to work through the crisis with those concerned.
A similar meeting is being held at the Auckland Conference Centre in Ohinerau St, Remuera on Tuesday.
EURA is working with legal firms to consider taking group action.
- BAY OF PLENTY TIMES / NEWSTALK ZB
