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Investors join forces to recover money from failed apartment project - Far North

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  • Investors join forces to recover money from failed apartment project - Far North

    Investors join forces to recover money from failed apartment project

    4:00AM Thursday Dec 04, 2008
    By Maria Slade

    Finance companies in freefall

    Investors in a failed Far North luxury apartment development have joined forces to try and recover the $4 million they are owed.
    The group of a dozen investors in the Crystal Waters apartments has moved to appoint a receiver, even though the company running the project is already in liquidation.
    Crystal Waters Ltd, along with four other companies associated with the developer Dan McEwan, was put into liquidation by the Inland Revenue department two weeks ago.
    The investors have seen no return on the funds they put in to the development of 26 apartments in Cable Bay, near Mangonui. Many of the apartments remain unsold.
    The Business Herald understands that by appointing a receiver - as they're entitled to do under the terms of a loan to the project - the investors hope to leverage off the IRD's investigations into the company, and investigate any legal options they may have for recovering their money.
    Earlier in the year investors were told they needed to pour more into the clifftop apartments or risk them going to mortgagee sale.

    Troubled finance company Dominion Finance, itself in receivership, is owed money.
    In a note to investors late last month Crystal Waters Ltd said Dominion Finance had lost over $5 million on the project.
    Investors bought shares in the development through the Investors Forum, an entity set up by Dan McEwan to market his model of property investing.
    Prospective investors paid to attend a three-day seminar and then paid a $5000 "procurement fee" to prove their interest in investing in the Forum's projects.
    One such investor, Waikato man Alan MacDougall, bought $250,000 worth of shares in the project, and also bought one of the villas for $805,000.
    In a "very strong" financial position three years ago, his involvement with McEwan projects had left him with money worries, MacDougall said.
    He was determined to see the Crystal Waters investors' action group through as far as it could go.
    "I just think there's a whole lot of questions that need to be asked."
    In the November note, Crystal Waters Ltd said publicity by MacDougall, who first spoke to the media about his concerns in February, had "tainted" the project and caused sales contracts on three apartments to be cancelled.
    Last week finance broker Peter Seers, who used to work on the McEwan investment schemes, said he believed more than 1000 Investors Forum investors could be out of pocket.

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  • #2
    And then there's the 16 section subdivision in Cable Bay going to mortgagee auction...
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