Source : The Straits Times, Thu, Aug 09, 2007
THE row over the thwarted Horizon Towers collective sale remains in limbo today after owners spent last night meeting lawyers to thrash out a course of action.
They ignored a 3pm deadline yesterday imposed by the estate's thwarted buyers and will meet again today as they try to grapple with the threat of a $1 billion lawsuit.
The buyers - Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority - have threatened to sue the sellers if they do not respond to their demands.
'We're still in discussions with our lawyers on what step to take next,' said the deputy chairman of the condominium's sales committee, Ms Doreen Siow.
But there was an air of defiance emerging from the ranks of owners yesterday.
The owners know the legal deadline for the sale expires on Saturday so they have until then to decide on their next move.
They have also dismissed the buyers' claims that they have not fulfilled their side of the sale contract.
'Our lawyers, Tan, Rajah & Cheah, have denied allegations of any breach of contract,' said Ms Siow.
The spiralling legal row was ignited last Friday when the Strata Titles Board (STB) axed the sale application for the Leonie Hill condominium, citing procedural errors.
It seemed the last act in a bitter row that began in February when the buyers inked the deal to buy the estate for $500 million.
But on Monday, the buyers made certain demands including asking the sellers to apply to extend the sale deadline from Saturday to allow a new application to go to the STB.
The sellers were also told that they could ask the High Court to reconsider the STB ruling.
But there was a sting in the tail: legal firm Allen & Gledhill, which is acting for the buyers, said the owners of 173 units who voted for the sale could be sued for lost profits of between $800 million and $1 billion. That works out to as much as $5.78 million per unit on average.
Senior Counsel K.Shanmugam, of Allen & Gledhill, said HPL, a listed firm, is answerable to investors and is facing a substantial loss.
The owners are likely weighing three obvious options. One is to extend the sale deadline and make a new application. The second option is to extend the deadline and appeal to the High Court over the STB ruling.
But these will mean the sale proceeding at the original price struck in February, one that looks low in today's rising market.
Their $500 million price - which is also the reserve price agreed on last year - works out to about $815 per sq ft (psf) of potential gross floor area. The Grangeford estate nearby was recently sold for $1,820 psf.
The third option is to do nothing, which essentially leaves the buyers in a position to carry out their threat to sue for the lost profits of $800 million to $1 billion.
It is a huge sum but not out of sync with the booming property market, industry observers say.
Meanwhile, all sides are awaiting the STB's explanation of its decision, which will be out 'in due course'.
This would help the owners decide whether it is worthwhile appealing against the ruling.
The sellers' lawyers and marketing agent First Tree Properties could also be in the firing line as the owners could counter-sue them for not getting the paperwork right, said an observer. 'The case shows that there's no incentive to be a consenting owner as you can end up being a potential defendant.'
A lawyer who declined to be named said it may scare off owners and kill the booming collective sale market.
Another observer said: 'It's a big Pandora's box.'
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