A GROUP of Hastings people who have funds invested in Donovan Oates Hannaford Mortgage Corporation debentures have banded together to work to safeguard their interests.
The corporation went into voluntary receivership on February 27 this year, owing $209 million to about 4500 investors, some 1750 of them from the Hastings.
Accountancy firm PriceWaterhouse Coopers partners Greg Hall and Phil Carter, who were appointed receivers and managers, have told debenture-holders they can expect to recover "in excess of 70 cents in the dollar" of their investments over a three to four-year period.
The receivers have estimated it may take that long to dispose of the corporation's more than 300 properties to achieve "maximum debenture-holder return".
The receivers are making monthly payments to debenture-holders equivalent to the interest they normally would have received, along with capital repayments when possible.
A spokesman for the group, who asked not to be named, said the debenture-holders had a number of concerns and were working with the receivers to resolve them.
Among the group's concerns were a number of matters included in the PriceWaterhouse Coopers February 28 and April 2 reports to debenture-holders.
These included the tax implications of payments being made from cash reserves appearing to take the form of dividends rather than principal repayments. The forecast 70 cents in the dollar return also seemed to include these dividends. And the funds, being returned over the three- to four-year wind-up period, must be assessed against the interest forgone if the cash were on hand now and able to be invested. This possibly would lessen the real level of return to a figure more like 50 cents in the dollar, the group's spokesman said.
Other questions some debenture-holders have raised concern the ongoing management role of the company's directors; the number of staff required to run the altered business; when every dollar counts, the need to pay $74,071 annual lease payments for business premises at 111 William St, Port Macquarie; and the failure to hold a debenture-holders' meeting.
A separate group of local debenture-holders are believed to be investigating an approach to the Australian Securities and Investments Commission over the receivership move.