13 December 2016
Re: Canterbury Mortgage Trust Investor Update - December 2016
Further to our letter of July 2016, we are pleased to provide you with an update on the status of the fund.
Legal proceedings continue to progress and as advised previously, we are unable to comment further on these proceedings or any likely outcome. However, we can continue to provide updates on specific matters pertaining to the fund and its resolution.
We advised in previous updates that we are unable to simply sell the properties that remain and explained the reasoning for that. We are pleased to advise that progress is now being made.
One of the properties, as previously advised, is severely earthquake damaged. We have made considerable progress with the insurer who has now made an interim payment. We continue our attempts to have the insurer honour its remaining obligations under the insurance policy. The temporary Court Judgement put in place through an entity connected to the borrower, which effectively prevents us from leasing, selling, or demolishing this property until the claim is settled, remains in place.
Other properties we have been attempting to sell comprise a range of bare land and viticulture sections. We advised that historic and ongoing litigation between neighbours has been a significant deterrent to potential buyers. A significant amount of work has been undertaken to end the litigation which involves all of the property owners in the development and we are pleased to now advise this matter has been resolved. As a result we have entered into negotiations with a buyer for a significant portion of the property. Should the sale conclude CMT’s exposure will be 3 lifestyle blocks only; we expect those to sell quickly.
It is too early to be able to provide a final date for payment to investors. Should the sale of the bare land / viticulture sections successfully conclude there will be a tax liability for investors. It is our intention to make a capital distribution in 2017 to offset this though the timing and amount is not yet known.
Finally, it is important that your contact and bank details are kept up to date. Can you please ensure that any changes are notified in writing to Canterbury Mortgage Trust, PO Box 13229, Christchurch 8141, or firstname.lastname@example.org.
Trustees Executors Limited
Client Services Manager
Governance and Investor Oversight