Following aborted collective sale, failed buyers' extraordinary claim works out to as much as $5.78 million for each unit
-- ST FILE PHOTOOWNERS at Horizon Towers fear they could lose millions of dollars each in a lawsuit over their condominium's aborted collective sale.
Who's who
Sellers: 173 owners at Horizon Towers (right) in Leonie Hill who signed the agreement to sell
Buyers: Hotel Properties Limited, Morgan Stanley Real Estate and Qatar Investment Authority
Objectors: Owners who did not sign the agreement
The authorities: Strata Titles Board (STB)
Timeline
August 2006: Horizon Towers tender fails to attract offers at the $500 million reserve price
February 2007: Hotel Properties and partners agree to buy Horizon Towers for $500 million or about $815 per sq ft (psf) of potential gross floor area
Late April 2007: Grangeford Apartment tender sets record asking price of $2,016 psf of potential gross floor area
May 2007: A group of owners who feel shortchanged by the sale, because prices have soared, attempted to reverse it
Late May 2007: Mediation hearing at the STB held
June 2007: Overseas Union Enterprise inked conditional deal to buy Grangeford at $1,810 psf of potential gross floor area
Early August 2007: STB dismisses the Horizon Towers collective sale on technical grounds
The parties who intended to buy the estate said they will sue the 173 owners who backed the sale for breach of contract and are claiming up to $1 billion in lost profits.
The extraordinary claim works out to about $5.78 million for each unit.
Minority owners - those who voted against the sale - will not be sued but they also fear the legal fallout could see them forced to sell their homes.
'Horizon Tower owners are very concerned with the purchasers' lawyer's letter to sue them,' said the deputy chairman of the sales committee, Ms Doreen Siow.
'We are trying to protect the interests of individual home owners and are in discussions with our lawyers on how to proceed.'
Legal teams were locked in lengthy meetings with the sales committee yesterday trying to devise a response, which the buyers want delivered today.
The threat to sue is contained in a letter delivered on Monday demanding that the sellers extend the sale deadline - it is due to expire on Saturday - by four months.
This would allow a new sale application to be made to the Strata Titles Board (STB) - one without the procedural errors that caused the initial application to be axed last Friday.
The buyers - Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority - also said the sellers could appeal to the High Court over the STB decision.
If the demands are not met, the buyers have threatened to sue for lost profits, estimated at between $800 million and $1 billion.
The STB dismissed the $500 million collective sale of the two 99-year leasehold blocks - comprising 199 apartments and 11 penthouses - on technical grounds, and not because of any merits in the case.
It said that 'statutory requirements' had not been met but did not elaborate.
Lawyers for the majority owners, Tan, Rajah & Cheah, have asked the STB for the reasons for its decision, in what has become the most contentious collective sale in years.
The deal struck in February eventually triggered protests from some owners, who felt the price was far too low.
Many owners were only too happy to see the deal fail even though they had earlier supported it because prime property prices have risen significantly since.
They cited the Grangeford estate next door, which was put up for sale a few months later with an asking price well above that achieved by Horizon Towers. Grangeford was sold last week at a level not far from its asking price.
Months of wrangling, meetings and ballooning legal costs led to last Friday's STB hearing.
The Horizon Towers case is highly unusual in that it is thought to be the first time that a buyer has threatened to sue the sellers.
It is also one of the few collective sales to be thrown out on technical grounds.
The wrangle is also striking for the number of top-flight legal eagles it has attracted.
HPL has Senior Counsel K.Shanmugam and Mr William Ong of Allen & Gledhill on its team.
Majority owners are represented by Senior Counsel Jimmy Yim of Drew & Napier and Senior Counsel Chelva Rajah of Tan, Rajah & Cheah.
Two small groups of objectors to the sale assigned Mr Kannan Ramesh, senior partner of Tan Kok Quan Partnership, and Mr Phillip Fong, senior partner of Harry Ellias Partnership.
A company that owns several units appointed Dr S.K.Phang, who then enlisted Senior Counsel Michael Hwang.
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