Horizon Towers Sellers In Meetings As Deadline Looms

Source : The Straits Times, Sat, Aug 11, 2007

ANOTHER day, another set of meetings with lawyers, with no end in sight for the sellers of Horizon Towers but time is fast running out.













MONEY TUSSLE: The amount the buyers want to claim from each seller works out to as much as $5.78 million per unit on average. It is way above the $2.3 million that each of the 199 apartment units would have received from the $500 million sale, or the $4 million or more that each of the 11 penthouses would have received. -- ST FILE PHOTO

The deadline for the aborted sale is today, which means the sellers must decide on a course of action in the face of a $1 billion lawsuit from the intended buyers. But no decision has been made, despite lengthy meetings that went on long into the night.

The Horizon Towers collective sale debacle began last Friday when the Strata Titles Board (STB) halted its sale application on technical grounds. The buyers want the sellers to extend the deadline for four months from today and then file a new sale application with the authorities or appeal to the High Court to reconsider STB's decision. But that could mean selling the Leonie Hill estate at the $500 million price inked in February.

Prices have rocketed since then and the sellers are not keen to extend the deadline just to see their homes sold at what most now feel are bargain basement prices.

The intended buyers - Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority - have threatened to sue the sellers for alleged breach of the contract inked in February.

They also told the owners of 173 units who voted for the sale that they could be sued for lost profits of between $800 million and $1 billion. This works out to as much as $5.78 million per unit on average.

'It's quite shocking that they would take such a drastic step,' said a 27-year-old resident. 'We are just a bunch of innocent people who had the intention of going through with the sale.

Mr Victor Ow, 53, agreed: 'Even though we signed the contract at a lower price, we were prepared to honour it until the STB's decision.'

The amount the buyers want to claim from each seller is way above the $2.3 million that each of the 199 units would have received from the $500 million sale. Each of the 11 penthouses would have pocketed $4 million or more. Horizon Towers has a 99-year lease.

'Whether the sellers are liable, that is arguable,' said a legal industry observer. 'Potentially, the people who may be liable will be the marketing agent, sales committee and the lawyer, depending on the latter's scope of instruction.

Horizon Towers' marketing agent, First Tree Properties, took on the job without seeking a commission from the sellers, whom it was representing. In an unusual move, it was instead going to take a cut from the buyers.

But a typical collective sale agreement would have a provision that appoints the marketing agent and another authorising the sales committee to act on the sellers' behalf.