Five companies connected to prominent Christchurch developer Robert Douglas Brown have been put into liquidation.
Finance company Bridgecorp (in receivership and liquidation) successfully applied to the High Court in Christchurch on Monday to liquidate five Brown companies Robert Brown Enterprises Ltd, RB Napier Investments Ltd, Napier Hotel Marine Parade Ltd, Robert Brown Developments (Queenstown) Ltd and Robert Brown Investments Ltd.
All five companies guaranteed a $5 million loan from Bridgecorp to another Brown company, Robert Brown Developments (Napier) Ltd, now in receivership. The loan was taken out in January 2006.
The Official Assignee has been appointed liquidator.
Bridgecorp co-financed the waterfront Te Pania Hotel in Napier, a project promoted by Brown through his company Robert Brown Developments (Napier) Ltd.
It was leased to Christchurch-based hotel chain Scenic Circle with the intention to sell the individual rooms to investors.
Investors were offered rooms at prices ranging from $165,000 to $195,000 with a guaranteed income return from the hotel of 6 per cent for the first five years.
Sales of the rooms fell short of expectations and Robert Brown Developments (Napier) was put into receivership in December 2006.
With many rooms unsold, Hanover Finance provided a refinancing package, taking out a $20m mortgage over the property. About 90 units in the hotel were still on the market in January.
Brown has been behind a number of South Island developments, including The Cairns, a mixed-density residential subdivision with a golf course on part of the Mount John station, near Tekapo.
In the 1990s, he specialised in townhouse and apartment developments.
Projects included an apartment block at 15 Peterborough Street, which won a New Zealand Institute of Architects regional award in 1996, and an apartment block on Carlton Mill Road.
He transformed the former Christchurch Teachers' College into The Peterborough apartments.
- © Fairfax NZ News
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