From the Age and SMH:
September 12, 2012 Ben Butler
TRA 4 FEB. Golf. Novotel Forest Resort Creswick . Supplied
The Forest Resort, Creswick. Photo: Supplied
WELLINGTON Capital has been accused of deliberately moving assets out of its Premium Income Fund to protect them from being put at risk in a bruising legal battle with a Creswick family.
The fund last week sold a parcel of mortgages valued at $90 million to Asset Resolution Limited, a company set up just last month by a group of lawyers and bankers.
The assets include 60 per cent of the loan owed by the Forest Resort, developed by Jim and Joan Walsh with investment from the local Creswick community.
Through custodian Perpetual Nominees, the fund has launched legal action against the family's company, Rytelle, alleging it owes $40 million after defaulting on the loan.
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In a counter-claim theoretically worth as much as $168 million, Rytelle alleges the fund was first to breach the agreement by halting agreed payments to builders in January 2008.
Rytelle yesterday asked the Victorian Supreme Court to either reverse last week's transaction or freeze the affected assets, alleging the deal could delay, defeat or defraud creditors.
''This arrangement should be brought to an end now,'' counsel for Rytelle, Peter Bick, QC, told the court. ''It [an injunction] is in the interests of unitholders, not to their prejudice, and in the interests of all creditors.''
He described aspects of the deal announced last week as ''dubious'', including a claim that the freshly established Asset Resolution Limited was ''well-credentialled''.
The deal would effectively hand over management of the assets to the Queensland office of insolvency firm KordaMentha, he said.
Responding to an assertion by counsel for Wellington Capital, Will Houghton, QC, that the transaction ''cannot be undone'', Mr Bick said there was no evidence Asset Resolution Limited had issued unitholders with shares as promised.
Under the deal, investors in the Premium Income Fund are to receive the entire share capital of Asset Resolution Limited, with one share issued for every unit they hold in the fund.
However, Mr Houghton told the court that Wellington Capital head Jenny Hutson ''goes on oath and says the shares have been transferred in specie''. ''It has happened,'' he said.
Yesterday afternoon, company records maintained by the corporate regulator listed Asset Resolution Limited as having issued one share at $1.
Mr Houghton said Rytelle's arguments lacked substance.
Justice Michael Sifris said he would decide whether to grant an injunction as quickly as he could and there was no reason to delay the trial of the underlying dispute.
The trial begins today.
Read more: http://www.smh.com.au/business/funds-assets-move-dubious-qc-tells-court-20120911-25qjt.html#ixzz26DeRs9bm
And WC's NSX announcement - www.nsxa.com.au/ftp/news/021725764.PDF
“Oh what a tangled web we weave, When first we practice to deceive”
Sir Walter Scott quotes
OCV
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