Tuesday, October 30, 2007

The Horizon Towers saga goes back on the boil today when the majority owners’ application for a collective sale is again heard by the Strata Titles

The Horizon Towers saga goes back on the boil today when the majority owners’ application for a collective sale is again heard by the Strata Titles Board (STB).

The hearing, scheduled for two weeks, will be the final word on whether the en bloc sale goes through - and on a battle of wills between the project’s majority and minority owners.

The minority owners will take this final opportunity to scuttle what they say is a deal done ‘in bad faith’.

Their lawyers have repeatedly said that they have plenty of objections to the sale that they have not yet aired. It is believed that these range from alleged non-compliance with the law governing en bloc sales to the sale being prejudicial to the minority owners.

‘We have quite a few arrows we still haven’t shot,’ lawyer SK Phang, who represents a minority owners, has said.

The minority owners’ objections have stalled the en bloc sale. On Aug 3, the STB dismissed the majority owners’ application on the grounds that it was incomplete and the accompanying statutory declaration false, because it was missing three signature pages. This was before the STB had heard the merits of the case.

The STB’s decision was then overruled by the High Court, which said this month that the missing pages did not constitute a substantial omission that prejudiced the minority owners. The court sent the application back to the STB.

Today’s STB hearing picks up where the previous hearing left off in August. Over the next fortnight, the parties will call witnesses and present evidence to support their opposing claims on whether the collective sale application complies in form and substance with the law and whether the sale was conducted in good faith.

But this time majority owners are unlikely to collaborate with minority owners. At the previous STB hearing, majority and minority owners were seen hugging one another and celebrating the board’s decision to dismiss the application.

Several majority owners - after signing the deal to sell Horizon Towers for $500 million in February - regretted their decision when neighbouring developments began fetching much higher prices. They circulated anonymous flyers to other majority owners, asking them to rescind the deal.

The move transformed what would have been a run-of-the-mill en bloc sale into the drawn-out battle it has become.

But this time around, it will be in the majority owners’ interests to push the collective sale through. The buyers - Hotel Properties and its partners - have slapped a $1 billion lawsuit on them.

Angered by some majority owners’ attempts to sink the sale, HPL and its partners filed a suit in the High Court claiming damages of up to $1 billion, saying that the sellers had failed to honour their part of the bargain.

The suit has been stayed until the STB hearing is concluded. But HPL and its partners have indicated that they could revive the proceedings if the collective sale falls through.

HPL and its partners have been excluded from the STB hearing, after their application to intervene was dismissed recently.

Source : Business Times - 30 Oct 2007

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