Sep 19, 2007
Some approach HPL group to seek resolution, avoid possible payout
SOME majority owners at Horizon Towers have broken ranks ahead of a courtroom showdown with a developer over the condominium's bungled $500 million collective sale.
Some owners, keen to avoid the potentially costly legal battle, have written to the Hotel Properties-led (HPL- led) consortium which agreed to buy the condominium in February.
A group of them say they are willing to sell their units to the consortium at the price agreed before the deal hit a brick wall. Another group of owners say they want to comply with the contract or seek any peaceful resolution.
HPL chief Ong Beng Seng and the consortium's lawyers from Allen & Gledhill have agreed to meet these owners today, sources said.
The legal action, alleging breach of contract by the sellers, is due in the High Court on Thursday next week.
The consortium is seeking damages of more than $800 million - and if successful, that means every majority owner could face a massive payout.
The sellers now appear to be in disarray, having ignored a Sept 11 deadline given by the buyers for them to extend the sale completion date.
By the time the deadline came around, the sellers had no one to represent them as three remaining members of the sales committee had quit at a meeting on Sept 7. That meeting was attended by more than 200 sellers.
Sellers from 20 units who are keen to extend the sale completion date have called for a new meeting to elect a new sales committee. It has been scheduled for tomorrow evening.
HPL and its partners - Morgan Stanley Real Estate-managed funds and Qatar Investment Authority - had come in after the Horizon Towers tender closed in August last year without attracting a buyer at the $500 million reserve price.
But the sale fell through after the Strata Titles Board (STB) threw it out over a technical error in the sale paperwork last month.
The buyers then asked the sellers to extend the sale deadline by four months so that they could appeal against the STB ruling or try to refile the sale application.
If the sale had gone ahead, owners of 199 apartments would have reaped about $2.3 million each, while owners of the 11 penthouses would have received at least $4 million each.
Observers say HPL and its two partners will want to buy the site as a whole, which requires consent from the majority of the owners, and not individual units as some owners are proposing.
The buyers have asked the court for a 'representative order' which was served on all the owners yesterday.
If the High Court grants the order, any final judgment obtained against the seven defendants - who are sale committee members - will bind all the sale committee members and majority owners.
In an affidavit accompanying the summons, HPL said it would be 'administratively inconvenient and extremely costly' to pursue each of the 270 sellers as defendants.
Besides, the sellers have contracted with them on identical terms, it says.
Many others are waiting for the High Court hearing next Friday on their appeal to quash the STB order, before deciding on their next step.
They are mostly under major stress, faced with the prospect of possibly coughing up millions in damages. Some of them, including sale committee members, have sought their own legal advice.
More lawyers have jumped into this case, which already involves several firms and well-known lawyers.
LAST-DITCH ATTEMPT
A group of majority owners at Horizon Towers say they are willing to sell their units to the HPL-led consortium at the price agreed before the deal hit a brick wall. Another group of owners say they want to comply with the contract or seek any peaceful resolution
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