26 July 2016
Re: Canterbury Mortgage Trust Investor Update July 2016
Further to our letter of 21 December 2015, we now provide you with another update on the status of the fund.
The legal proceedings continue to progress. As advised previously, we are unable to comment further on these legal proceedings or any likely outcome. However we can continue to provide updates on specific matters pertaining to the fund and its resolution.
As detailed in the financial statements costs have decreased over the last year due to the reduced time involved in the legal proceedings. We remain of the view from the information held that the decision to proceed with a claim is the correct action. We continue to take expert advice where needed in the interests of obtaining the best result for investors.
Other costs have been incurred which relate primarily to the day to day running of the fund. This includes maintaining the accounting and investor records, and management and recovery of the remaining loan files. As an example, the recovery costs include payment of property rates, property security, and graffiti removal.
As noted in previous updates, we remain unable to simply sell the properties that remain.
One of the properties, as previously advised, is severely earthquake damaged. We continue our attempts to have the insurer honour its obligations under the insurance policy. An Interlocutory 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. 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. CMT’s exposure is less than 50%. While we have been unable to sell the commercial sections as a result of the litigation we have had some recent success in selling some of the lifestyle blocks. We hope that interest in the properties continues.
At present, there is no ability to provide a final date for payment to investors. As explained above we are being hampered by the types of properties remaining, and various third party actions frustrating our attempts at sale. The financial statements reflect what we expect to receive from the sale of remaining security properties but exclude any proceeds of court actions. There is no recourse for investors if the claim is lost because the liability is limited to the assets of the fund.
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 email@example.com.
Trustees Executors Limited
Client Services Manager
Governance and Investor Oversight