Blue Chip investors 'won't be left homeless'

Tasman had been owned by Blue Chip Financial Solutions and loaned $27 million to investors in the failed Blue Chip scheme. Meltzer estimates about 80 per cent of all lending was undertaken by Tasman…The amount owed to more than 3000 Blue Chip creditors is over $84m, much worst than originally thought.

The Dominion Post
April 25, 2008

Blue Chip investors 'won't be left homeless'
Kris Hall

Investors in companies entangled in the Blue Chip property investment failure will not be forced to abandon their homes, investigating liquidator Meltzer Mason Heath says.

Beleaguered investors have received final demand notices from Tasman Mortgages, the majority funder of investors' loans, demanding urgent action to settle arrears.

However, Jeff Meltzer, liquidator of the 21 Blue Chip-linked companies, told BusinessDay he had received assurances from the lender, owned by publicly listed Lombard Group, that no steps would be taken to force mortgagee sales.

"The funder confirmed that letters of default have been sent to investors and these letters are part of the process that the funders must follow where defaults have occurred," he said.

"They are working closely with individual investors and have received numerous hardship applications, which are being processed."

Tasman had been owned by Blue Chip Financial Solutions and loaned $27 million to investors in the failed Blue Chip scheme. Meltzer estimates about 80 per cent of all lending was undertaken by Tasman.

At last month's creditors meeting Meltzer assured investors they would be granted two to three-month mortgage holidays from their lenders while they sought ways to meet their financial hardships.

Some investors, however, were rocked to learn their applications had been rejected because "they do not meet the funder's criteria for hardship".

Te Puke investors Carol and Cliff Hayes were among those turned down in what they said were "random decisions" by Tasman.

The couple poured $200,000 cash into Blue Chip after selling their business and mortgaged their home to fund an Auckland apartment that was never built.

"Now we face losing it all, everything," said Carol Hayes. "We recently moved into a house that's under renovation. If we're forced to sell it we wouldn't get the market value."

The couple were turned down by Tasman for a mortgage holiday and instead received a letter demanding they pay the $7000 they owe or risk losing their home.

"They said I had been denied (the mortgage holiday). When we get the Property Law Act Notice we have 28 days to bring our mortgage up to date or they will proceed against us by putting the house up for mortgagee sale."

Commerce Minister Lianne Dalziel says she is unable to intervene.

The amount owed to more than 3000 Blue Chip creditors is over $84m, much worst than originally thought.

Meltzer added: "We have made it very clear that there is no pool of funds available in any of the Blue Chip companies in liquidation for immediate distribution to investors.

"There is little likelihood that moneys will be available to investors from the companies in liquidation in the short to medium term and funders will not be prepared to wait this length of time.

"Therefore investors must determine their own position and prepare proposals for submission to their funders."


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