Investors in the failed development are refusing to buy up the units. Photo / Supplied
The dispute between bankrupt property developer Robert McEwan and a group of investors in his failed Queenstown apartment complex continued at the High Court at Auckland yesterday.
McEwan is the director of Station properties, in receivership, which with son Kelly McEwan's company Forum Select Bowen View, in liquidation, developed a
complex of 25 apartments and three town houses in Queenstown.
The complex, Bowen View Apartments, was supposed to be sold to a third party en masse but the property crash in 2008 prevented this sale from going through.
A group of investors underwrote the development of the complex to raise capital for the project but later became liable for the apartments via sale and purchase agreements.
The investors disputed this and refused to pay around $1 million for each apartment in the complex, claiming through their lawyer, Raelene Kelly, that they would have to file for bankruptcy if forced to buy. McEwan, through his bank BOS International, which is owed more than $21 million, took the investors to court in July last year to force them to pay up.
A judgment delivered in December by Associate Judge David Robinson said two of the seven defendants would have to buy the apartments, while the remaining five had a case to answer based on alleged misleading advice dispensed by McEwan through his investment advisory company Investors Forum.
Station Properties has filed further proceedings against the defendants that will go to trial. The trial will determine whether they have to buy the apartments or not.
According to the receivers Grant Graham and Brendon Gibson of Kordamentha, Dominion Finance is also owed $3.9 million and Inland Revenue is owed $1.6 million by Station Properties.
